Thanks for sharing. Let me guess, you have around 55-57 years and you're starting to "wake up"  

This video is a good presentation, but its description of money creation is incorrect: Commercial banks do not have any right to create money, they can only sell assets to central bank in exchange for money, they can not loan out money more than they already have

The money creation only happened at central Bank, and there is no FRB at central bank

this is a good place to start. a lot of people I talk to in the real world have no idea how things work, an ignorance I have shared.

Yes they can and do. It is called double entry book keeping and it expands the money supply the fed only creates a small amount of the money supply the vast majority of money is created when banks lend money into existence,

Except that your chart is nonsense.

In your view, the stuff that is not used as money is money, while the stuff that is used as money is not money.  If we agreed to accept your contorted view, you would be right, but then there would be no point in the discussion, because no one gives a fuck about not-money.

Your chart also suffers from the flaw that you are reading it from the top to the bottom, when reality happens from the bottom up.  Lending happens first.  Reserves are found later, usually by borrowing against the new note.

Money creation is not a secret, just there are two different types. I'm more interested in the central bank money, but other people might be interested in checkbook money, check http://en.wikipedia.org/wiki/Money_creation

FRB is the practice of creating checkbook money, but if FRB is not allowed, then there will be no checkbook money, but there will still be central bank money. and if central bank money is not available, the checkbook money can not increase if commercial banks already loaned out to maximum

FED is buying 85 billion USD bonds and MBS monthly, that money is not generated by FRB, and that is the money might create 850 billion of checkbook money if loaned out by commercial banks later

I definitely can't defend all of what johnyj has said here, but he is correct about the issue of money creation by banks.

The documentary is correct, up until the point where it talks about the banks themselves issuing credit that isn't backed by deposits. At least, this is if the banks aren't issuing their own currency units which they eventually hold on fractional reserves themselves, but that would essentially be saying that the bank is the Fed or ECB, and these days that's not how people generally think of banks.

Here's how fractional reserve banking really expands the money supply in today's economies.

The central bank (ECB, the Fed, etc.) creates the base money supply. In the case of gold backed specie, this is where the amount of available gold applied towards exchange rather than jewelry or other uses comes in.

This base money supply is "borrowed" from the Fed by anyone from commercial banks to the US Treasury. This is why the "debt as money" phrase came about, since all money is traced back to debt to the Fed. Once these institutions have the money on their books, it is essentially works like any other deposit or form of income since it is a radically rare case that the Fed asks for that money back, except in cases of acting as the lender of last resort (though that serves a different function entirely.)

From this point, the new money is lent out from commercial banks, or it is spent by the US Treasury. The money is now in circulation, and can be spent for any purpose by whoever else holds the funds.

These funds in circulation can either remain physically held, or they can be deposited into another (or the same) bank.

The banks in today's system lends a portion of these deposits out while still holding the original deposits on account. This is now a fractional reserve system, and it has resulted in the expansion of some measures of the money supply. The depositors still have complete access to their money in the bank, while the borrowers have access to all of the funds that they borrowed. This works because depositors in a trusted banking system do not withdraw their funds at a high enough rate to deplete the bank's reserves -- however, under certain crisis circumstances, depositors will withdraw their funds en mass in what's called a bank run, in which case the bank's deposits will eventually be depleted and the bank will become insolvent.

This is the extent of the fractional reserve system. You could go on to include how the borrowed money, once spent, may eventually be deposited into the bank again, but it's really just a recursive function of however many times the exact same process has occurred. There is no expansion of the base money supply, even as the credit markets are expanded 10's, even 100's of times, depending on the reserve rates and the market propensity to deposit into the bank.

This is not fraud. This is not theft. This is not money creation.

This is the bank loaning money from its depositors, and lending it out to its borrowers. If you're in debt then you're running on fractional reserves as well. The bank functions in exactly the same manner, and the way the money supply is altered is also exactly the same.

I hope this helps to clarify the issue.

Technically it is true banks create money, because the FED is a privatized bank that loans money to the government with interest as well as next level major banks.

Read this if you want to know what is really what.

Debunking economics by Steve Keen, and look at his Minsky debt based modeling systems

The new great depression by Richard duncan

 http://www.youtube.com/watch?v=iquemUNNYY8

+1 I had seen the money as debt series long ago, and its awesome but this was a great new addition to educate with as well :-)