TLDR;
This video explains how money actually works, arguing that what we commonly perceive as money (Federal Reserve notes) is actually debt. It explores the legal definitions of money, the role of negotiable instruments, and how banks leverage signatures on loan documents to create money. The video encourages viewers to understand the power of their signature and the potential to use this knowledge to protect their financial rights.
- Money, as defined by the US Constitution, is gold and silver, while Federal Reserve Notes are negotiable instruments representing debt.
- Banks use signed loan documents as collateral to request funds from the Federal Reserve, essentially creating money from your promise to pay.
- Understanding the Uniform Commercial Code (UCC) and the concept of endorsement can empower individuals to assert their financial rights.
How Money Actually Works [0:00]
The video starts by stating that common understanding of money is incorrect. The presenter aims to explain the true workings of the monetary system and how understanding it can change one's life. He encourages viewers to subscribe for more financial literacy content.
What is Money? [0:31]
The presenter clarifies that the green paper in our wallets is not actually money but fiat currency, a medium of exchange that doesn't store value. According to Article 1, Section 10 of the US Constitution, only gold and silver can be legal tender for payment of debts. Black's Law Dictionary (early edition) defines money as gold, silver, or paper used as a circulating medium of exchange, specifically excluding bonds, notes, debts, or real estate. Therefore, a Federal Reserve Note is technically a note, a promise to pay, and a negotiable instrument, not money by legal definition.
Federal Notes [2:39]
The video emphasizes that a dollar bill is a "Federal Reserve Note," a promise to pay, making it a financial instrument and a form of debt. This system operates under the Uniform Commercial Code (UCC), specifically Article 3, which deals with negotiable instruments. A negotiable instrument is either an unconditional promise to pay or an unconditional order to pay, such as a promissory note or a bill of exchange.
Real World Example [3:59]
The presenter uses the example of a utility bill, which is a bill of exchange (an order to pay), to illustrate negotiable instruments in everyday life. Mortgages and car loans involve signing a promissory note. UCC Article 3, Section 102 states that negotiable instruments are governed by commercial law, not monetary law, meaning the law itself doesn't treat notes as actual money.
How Banks Use This for Infinite Money [4:52]
Banks don't lend money from their vaults but create it through the system. Title 12 of the US Code, Section 83, prohibits national banks from lending out their own capital stock. Under the Federal Reserve Act, Section 16 and 12 USC subsection 412, banks apply for Federal Reserve notes by submitting collateral, which is the loan document you signed. Your signature is the asset. The bank uses your endorsed promissory note as collateral to request funds from the Federal Reserve, receiving new notes (dollars) in return, which they then loan back to you with interest.
The Power of Your Signature [6:09]
Signing a loan document turns your signature into a financial tool. This act is legally called endorsement under the UCC. Most people unknowingly perform a blank endorsement, handing over the value of the instrument without specifying who it's for, essentially giving the bank a blank check. Banks perform a special endorsement, writing "Pay to the order of the bank's name without recourse," allowing them to claim the financial instrument and request currency from the Federal Reserve without liability. "Without recourse" means the original signer (you) is not responsible if the note is later dishonored, disclaiming all risk for the bank. You can write your own endorsement, specifying "without recourse pay to the order of [your name in all caps]," to direct where the value should go and assert your claim over the funds generated by your signature.
Why does it Matter? [9:06]
Understanding that your signature creates negotiable instruments that form the basis of the modern money system empowers you to question what you're agreeing to when you borrow, sign, or transact. Banks use your signed document as a negotiable instrument to get money printed on your behalf and then charge you interest for accessing it. Awareness of negotiable instruments, endorsements, and how banks monetize signatures allows you to claim some financial power. This knowledge can be used to negotiate with lenders to reduce debt or challenge improper financial practices.
Final Thoughts [10:44]
The presenter summarizes that infinite money comes from understanding how value is created and transferred through signatures and contracts. He encourages viewers to subscribe for more content on hidden financial systems and tools to control wealth. He also invites viewers to comment if they want to see a full video on how to file endorsements or learn how to use negotiable instruments legally and effectively.