Money for nothing by Bruce, Jim
This is the opening statement of the documentary 'Money for Nothing' by director Jim Bruce. The documentary gives a shocking insight in the world of financial markets and describes the pivotal role the Federal Reserve Bank has played in several catastrophic economic events in the past century. Experts and people involved reflect on the measures the FED took during these crises and their economical and social implications.
Its measures, celebrated in earlier times of economic prosperity and demonized after the big crash of 2008, have had massive social implications for the common people. Until the late 2000Ã¢Â€Â™s the FED made money available for everyone: from unemployed people to buy a house to investment banks and derivative brokers for the trade of financial products. Small crises were controlled by more drastic measures until the bubble had grown too big to handle leading to the 2008 financial crisis . Public money had to be used to save banks, not just the regular ones, but also the ones who made massive profits before lending money and investing it in risky financial products. So instead of bringing prosperity to all the people, the measures of the FED redistributed the money from people without wealth to people with a lot of wealth, leaving the public with a massive debt.
Politics and the financial system have been entwined for as long they both exist. The documentary shows the implications of this relation for many (economic) events in the last century.
In 1971 president Nixon gave a live television speech to inform the citizens that the Gold Standard was being left behind. This political decision basically gave a rise to the modern age of inflation. In the years that followed economic prosperity clouded the visions of politicians leading to the reluctance of creating governmental institutions to monitor and control the financial market. With low interest rates and a monetary safety net provided by the FED, taking great risks in business paid off like never before. The government should have taken action, but the small term gain was more attractive than the long-term pain. Eventually this liberation of the financial system led to an economy that instead was completely controlled and planned and totally dependent on cheap credit from the FED.
Since the beginning of the twentieth century the financial system has evolved. The concept of first earning money before you spend it was abandoned at the beginning of the First World War. This documentary shows how several social events influenced the financial system and how institutes like the FED acted to counteract the negative effects. However as history has shown, economy is like the weather, it moves in patterns. Attempting to influence it will only result in short term gain, but you wonÃ¢Â€Â™t prevent the eventual downpour.