Fractional Reserve Banking System all messed up…

This week in Social Studies class we saw a video called Zeitgeist, it is a documentary that explains the fractional reserve banking system in the US and how it all works. At first we understood little because in the video lots of economic terms are used, that many people don't know. The main conclusion I got from the video is that people will always be in debt because of the capitalist system we all live in and that money is created out of nowhere. 
Watch this video it talks about how money is created in this system it will help you to understand what I am talking about in this post and to understand better the documentary that is linked bellow at the end of this post. 

The documentary basically explained that the almost all the money that is floating around in the US is mostly digital and that only the 3 percent actually exists. It appears that the US government asks for loans of money to the federal reserve which gives them the money. Then that money goes to a bank, where only 10 percent of the money gets kept as deposit the rest is for loans. Actually the money doesn't exist it gets created by the federal reserve. When the people go to the banks to get loans they have to pay for interest which is money that doesn't even exist. This way the system is based on debts so everyone will always be on debt. By creating money out of the blue inflation starts and everything goes wrong. This shows us how messed up this system is because it only benefits the people that are on the top of the pyramid because they have money, but for the ones of the lower parts of the pyramid prices will keep going up while they won't get more money. 
Here is the link so that you can watch the video it is really interesting I recommend it.