“Follow the Money”–Debunked!

By SlayerX3

One of the central passages of Thrive is a section often referred to as “Follow the Money,” which Thrive fans treat as some sort of slogan. This section contains Foster Gamble and others’ views on fractional reserve banking, the Federal Reserve, the economic crisis, and conspiracy theories related to these. This article debunks those ideas.

Fraction Reserve Banking

Disclaimer:

Before the Wikipedia bashing begins, I’m using Wikipedia for two reasons: (1) Simplicity, and (2) it works well for summaries of information, even though I will provide further sources and more detailed information links than Wikipedia can provide.

PS: This part of the movie is incredibly complicated for anyone involved here to deal with, as given that most people don’t understand how economy and politics work by themselves, much less together, unless you’re well-versed in mathematics, economics or political science. Comments that simply complain about how wrong or rigged the actual political and economic systems are will be seen basically as an opinion and not fact.

It also doesn’t help that for the makers of Thrive the current economic system is a scam/conspiracy created by a powerful Financial Elite to perpetuate their own power. Arguing the existence of this conspiracy (Thrive mostly uses misinterpretations and opinions that they exist instead of verifiable facts) feels like beating a dead horse, thanks to our good old friend Confirmation Bias.

When they begin talking about Fractional Reserve Banking, Foster Gamble and and David Icke get a few things right at the beginning. They are right about how saving deposits are used by banks for loans and financing, but the film cuts short the explanation of why this happens and the economic reasons to use fractional reserve banking. Instead of explaining the real reasons behind this, the movie simply dismisses it by saying “it creates money out of nowhere.”

What is Fractional Reserve Banking?

Fractional Reserve Banking (FRB) is a form of banking where the deposits made on the bank are separated in two parts. The first is the amount the bank is allowed to loan and the second is the part the banks is obligated to keep as a reserve. This amount is dictated by the central bank of the country where the bank is operating.

Does it really “create money out of nowhere?”

The answer will depend of which kind of money you’re talking about. If you’re referring to printed money, it can’t “create money out of nowhere,” as the values being loaned and being circulated haven’t been made or printed yet.

If you’re talking about value: yes it can create more value since there is more money circulating than there is physical printed money.

This is much better explained by the links I’ll provide.

Why do banks work with FRB and how come they don’t “run out of money”?

Because it is fluid, FRB allows banks to generate profit and still provide access to people or business to acquire money for whatever reasons they need it–for example, to buy a house or start a business. FRB guarantees there will be money circulating for investments, consumer goods and to accommodate a growing and active economy.

[Muertos comment: this is not a new invention. If we did not have FRB in some form, our economy would be stuck in the early 19th century. The whole concept of modern banking, historically, developed as a means to permit sufficient capital to be accumulated to fund large-scale projects, both public and private. Without something like FRB, we would not have public works projects like dams, sewer systems or transportation, and we would not have privately-funded industries such as computers and information technology, because it simply wouldn’t be possible to get enough capital together to even begin to pay for these things. This is the historical reality that critics of FRB refuse to understand.]

The influx of savings deposits and payments on loans that they make usually are enough for most banks to be secure they will have the money needed to honor the withdrawals, as there are more people making payments and saving deposits than there are people making withdrawals of their own savings and assets.

What if there are more people making more withdrawals than the bank has money on reserve?

Remember the credit crisis that started in 2008 and is still kicking? One of the reasons why it went from bad to worse and from worse to a total disaster was because of this–people making more withdrawals than banks had in reserve. In times of economic crisis, if there is a doubt that the banks will be able to honor the deposits made on them, this leads to people and investors to withdraw all their assets within the bank in a really short amount of time, before other depositors can withdraw their share. This creates a cascade effect that can possibly (almost certainly) cause a bank run. This forces the bank to call in its short term loans, draw upon credit lines with other banks or ask for last resort rescue loans from the central bank.

Okay, but how this is bad for people?

In time of a stable economy this not bad for financially responsible people, those who take out loans that are smaller than their average yearly income and can make sure that the accumulated interest won’t surpass all their earnings during the intended financing period. Take for example financing the purchase of a house with a 10 year mortgage plan. It is, however, extremely dangerous for people who to borrow who are in unstable financial situations (like no job security, health problems, addictions) or do not measure how much interest they’re incurring compared to how much they earn, or people who simply don’t care about the long term consequences of their lack of foresight (I can’t miss the chance to throw this jab at the American reader).

In times of instability, however, irresponsible borrowing (and lending) can hit hard even the responsible people hard. This is what happened in 2008.

Gamble continues with a story telling how the fractional reserve banking system was born.

Setting aside Mr. Gamble’s implications of how it is used to create money on the backs of people (which is an arguable question), if you want to know how central banks and fractional reserve banking came to be, look for the history of the  Bank of Amsterdam.

Here are some links that further explain what FRB is and how it came about:

https://en.wikipedia.org/wiki/Fractional_reserve_banking

http://www.canadabanks.net/default.aspx?article=Fractional-Reserve+Banking

https://www.youtube.com/watch?v=nH2-37rTA8U (Khan Academy on FRB, quite educational I must add, as long as you avoid the comments section).

https://upload.wikimedia.org/wikipedia/commons/4/4a/Modern_Money_Mechanics.pdf

http://econpapers.repec.org/paper/wpawuwpma/0203005.htm (look for the download link)

https://en.wikipedia.org/wiki/Criticism_of_fractional_reserve_banking

Later Gamble states how FRB is used to create a population that is tied to their debts to the bank.

Then Thrive provides us with this quote: “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning” – Henry Ford, 1922

The quote appears to be completely fake. Although it is commonly cited on conspiracy theorist, 9/11 Truth and “End the Fed” websites, there is no source and no context linking it to Henry Ford. Not even the dates that Ford supposedly said it are consistent.

https://en.wikiquote.org/wiki/Talk:Henry_Ford

https://en.wikiquote.org/wiki/Conspiracy#Attributed

[Muertos comment: conspiracy theorists love to use fake quotes, and this is not the only fake quote in Thrive–there’s a quote by Henry Kissinger that is equally false. The problem with these quotes is that, once it gets out there and conspiracy theorists decide they like it, a quote gets repeated all over the place on all sorts of conspiracy theorist websites–thus creating the erroneous impression that, because the quote appears so often, it must be true and accurate. If you don’t believe that this happens all the time, just think back on all the things comedian George Carlin is supposed to have said–only a small fraction of them are actually real Carlin quotes, and as he is dead, he can’t dispute that he didn’t say them.

When conspiracy theorists are challenged on fake quotes, many of them will say something like, “Well, you can’t prove that he didn’t say it!” That, of course, is asinine. You can’t just make up any crap you like, put it in someone’s mouth and then challenge people to prove they didn’t say it. But, sadly, this is how conspiracy theorists think. Quotes about banking are particularly attractive to conspiracy theorists because they love the idea of respected figures from history having supposedly “warned” us about the dangers that they (conspiracy theorists) insist are right around the corner.]

After the fake Henry Ford quote, Gamble resumes his rant on how we have become debt slaves of a financial elite who has rigged the system to their benefit.

Take this as you will, but you’ll become a debt slave if you decide to acquire (too much) debt in the first place. For many this seems unavoidable.

[Muertos comment: the term “debt slave” bothers me because it’s misleading. Suppose you have a good job and a family. You take out a 30-year mortgage at a reasonable interest rate in order to buy a bigger house to raise your kids in. You can easily make the payments and your house increases in equity in the meantime. Are you still a “debt slave” for the next 30 years? If you decide to sell the house you pay off the mortgage, and can take the equity and invest in a bigger house elsewhere. How is this “slavery”? And what’s the alternative–live in a smaller, crappier place and try to raise your kids there, where you don’t have room for them? Why is taking advantage of the opportunities that debt creates necessarily a bad thing? Thrive doesn’t see distinctions along these lines. In its ideology, all debt is bad.]

Catherine Austin Fitts

From Muertos’s article debunking the trailer:

Catherine Austin Fitts was Assistant Secretary for Housing in 1989-90 under the first George Bush. She is also a Wall Street banker. She currently works for an investment advisory firm called Solari, Inc.”

Ms. Fitts, along with Mr. Gamble, keeps reaffirming how FRB is used to print more money and enslave more people through debt. Later she makes a comparison with ordinary people counterfeiting money being a crime, while the [central] banks printing money being called “increasing the money supply” as if there’s no distinction here. There is a distinction. I don’t know, maybe it’s related to the fact that central banks are trusted institutions, and they are an effective way to control interest rates and the amount of money being circulated so as to make sure hyperinflation or hyper-deflation do not take place. Yes, said measures can fail, but it’s certainly not the same as “printing money” just for the hell of it.

Gamble then cites the gathering of the “secret” Morgans and Rockefellers on Jekyll Island, where (he says) the draft of the Federal Reserve was created.

First he fails to mention that a central banking system was already in place in Europe–especially in Germany–long before the bankers and politicians in US were considering using a central banking system. Second, politicians in US were already studying alternatives to the US Treasury bonds and lack of liquidity and access to credit, mostly in response to the Panic of 1907.

After this Gamble beings talking about the creation of the Fed and the Internal Revenue Service in the same year, “forcing us to pay for the politicians’ debt”, and introduces the viewer to G. Edward Griffin and his book.

G. Edward Griffin

Writer of “The Creature from Jekyll Island” which is about the creation the Fed, Griffin is a critic of the current banking system and advocates private currency as being “real money.” Needless to say, his ideas are quite popular amongst libertarian circles.

(If you want to know how bad this idea of “real money” is, just imagine going to the state next to yours just to find out that the private currency of your local bank, backed by a commodity like silver or gold, is worthless because the other state operates at different standards or doesn’t accept your currency. Or, worse yet, imagine if the bank goes bankrupt, all your assets in said bank are gone, and there is no central bank or institution to guarantee the bank will have the resources to honor its deposits).

[Muertos comment: we had precisely this problem in the Great Depression, which resulted in an entity called the Federal Deposit Insurance Corporation–an agency that makes sure that you, as a bank depositor, will be able to retrieve your money from that bank (up to $250,000, I think) even if the bank fails. Where would the money come from if the FDIC had to make you whole after your bank fails? It would come from a fund administered by the federal government. Doesn’t sound so bad when you think about it like that, does it?]

Griffin goes on about how the central banks are cartels that work with governments and have the legal power to create money out of nothing when the government needs it.

I think the “out of nothing” part of the money is not entirely nothing. There seems to be a massive misconception that when a central bank prints more currency, it’s simply creating more money out of nothing. First, it doesn’t happen this way. Even though the money is not backed by a scarce commodity (like gold), the value attributed to it is related to how trusted and reliable the country’s central bank is. Printing more money without the generation of wealth decreases the value of the money. This is why you can trade one US Dollar for 10,000 Zimbabwe Dollars, and the same reason why the Zimbabwe 1000 Dollar bill is worth less than the paper it’s printed on. Printing more money without generation of wealth will lead to inflation and the loss of value for the currency.

[Muertos comment: this has been proven time and time again historically, such as in the U.S. when “greenbacks” were printed to help finance the Civil War. It didn’t work then either.]

The central banks are not only able to create more money. They are also capable of removing money from circulation when needed. For example, during Christmas the US Federal Reserve prints more money to assure all the withdraws will be possible, and then they remove the extra bills from circulation afterwards.

When this happens, the fiat currency doesn’t lose its value because it is just a representation of the wealth that already does exist, even though most of this wealth is in form of data like the amount you have in your bank or how much all your declared belongs are worth. It doesn’t mean it’s worthless. It’s a representation. It’s not wealth itself.

Let’s put this way. The amount of wealth in dollars is X and the amount of printed paper money is Y. Because most of the wealth being traded, stored or transferred is in the form of savings, credits, stocks, checks and representations other than printed fiat currency, X will be always higher than Y, but when people are making withdrawals, collecting their payments or selling things, more money will begin to circulate from hand to hand. Since there is more money in data form than there is in the form of printed money, the Central Banks print the money and send bills to the local banks to make sure they are capable of handling all the money being moved and spent. This will make Y approach the amount of X, but if the amount of Y being printed and in circulation is  getting closer to the amount of X, there is a chance that Y will surpass X. This will lead to the devaluation of the currency on which X and Y operate, leading to inflation.

To put it in even more simple terms: when you print currency to represent wealth, you’re not creating money out of nowhere. When you print more currency than you have wealth, you’re lowering the value of the money. The amount of wealth is still the same but the value of the currency changes.

Bill Still on the Federal Reserve

Bill Still is another Libertarian film producer, highly critical of the monetary system in US.  He is also seeking the nomination from the Libertarian Party for the 2012 elections.

During his short appearance in Thrive, Mr. Still claims that the Fed is a privately-owned bank made to look like a government bank. To get his point across he says the Federal Reserve, instead of being on the blue government pages in the Washington DC area phone books, is on the white pages. He thinks this is evidence!

Since I don’t live in the US and I didn’t look at a phone book from the DC area during my short but pleasant stay in US, I have to say that was a really bad choice for evidence.

[Muertos comment: there are a lot of stupid assertions in Thrive, but this one has got to be in the top five most ridiculous things in the entire movie. I can’t believe Mr. Gamble let this one through–it’s simply insulting to the intelligence.]

Alan Greenspan on the government’s relations with the Federal Reserve

At 1:00:02 of the movie there is a short video clip in which Alan Greenspan claims that the Federal Reserve doesn’t take direct orders from the president or the Congress. This is used to show the Fed as a rogue agency that answers to no one.

This is totally wrong. Mr. Greenspan’s quote is taken out of context.

For starters, all members of the Federal Reserve Board of Governors, are handpicked by the president and approved by Senate vote. They are required by law to have a “fair representation of the financial, agricultural, industrial, and commercial interests and geographical divisions of the country.” This means they have to be scholars in economics, politics and above all they must represent the economic interests of the nation, not the interests of the Congress and not of the president. They are accountable for their actions which can lead to members of the board not being nominated again as well the formal and informal relationships of the board members with the president and the Congress.

There is a really good reason why the central banks usually don’t answer directly the executive chief in office and the Congress: if they did, politicians could use these banks for political gain and directly affect the economy. We need an independent Federal Reserve.

A brief study of history, especially looking at some South American countries and African countries, will show that when the politicians can control the decisions of the central banks and therefore dictate the course of the economy, the results are not pretty. More often than not this is completely disastrous for the country.

https://www.youtube.com/watch?v=3QkmLnNEvdU

Even though the title of the linked video and the comment section of the youtube page follow the same line of thought of the people featured in Thrive, I’d like the viewer to see the part beginning at 8:00 where Greenspan remembers that the actions taken by the Fed would hurt G.H.W. Bush’s reelection. Just think about that for a few minutes. What if Bush was able to change the decisions of the Fed for his own political gain? What would that do to the economy of the United States? This could potentially harm the economy more than it was already harmed in 1992 (which at that time was in a deep recession). This is why the Congress and the president don’t have much say in the decisions of the Fed, but the Fed is still accountable for its decisions. The people on the Federal Reserve Board were chosen by the president and approved by the Senate in the first place, making them accountable for their actions inside the Federal Reserve.

Here are some documents containing detailed explanations of the relations of the Federal Reserve with other branches of the US Government. As you will see, it’s far from an unaccountable rogue entity.

http://www.wisegeek.com/what-is-the-federal-reserve.htm

http://useconomy.about.com/od/governmentagencies/p/fed.htm

http://www.federalreserve.gov/boarddocs/speeches/2000/20001024.htm

http://www.publiceye.org/conspire/flaherty/flaherty3.html

“Economic parasite”

After this, Mr. Gamble and Ms. Fitts give us analogies on how the bankers use their data on the economy to benefit themselves at expense of others. I won’t argue much with that because it is happening, but not for the reasons  Gamble & friends would you like to believe.

FBI Raid

Since it is Mr. Gamble talking about the FBI raiding her (Ms. Fitts’s) company not her saying it, and nowhere in her company’s website or her bio mentions the said raid, I’m skeptical that it even happened. I also tried to look for news articles mentioning this raid hoping to see something like the paper shot Gamble gave us on the screen, but the only places I saw any mention of it were 9/11 Truth websites and a few truthers’ blogs without any external links or sources to this event beyond what their word for it.

[Muertos comment: always be skeptical of anything that appears on 9/11 Truth websites and nowhere else. 9/11 Truthers are notoriously incapable of getting almost anything right.]

Unless Ms. Fitts herself can come forward and explain in her own words what happened, or if someone can provide me a reliable link or newsfeed with info validating Mr. Gamble’s characterization of what happened, I’ll keep my sense of disbelief about the big government suppressing her findings, specially someone with credentials and political reach like her. (Blogs or forums do not count as reliable source; I’m talking about newspaper articles or public data).

[Muertos comment: given the fact that ten people who appear in Thrive have signed a letter repudiating the film and saying the movie was misrepresented to them, I wouldn’t be at all surprised if what Ms. Fitts would say about what happened would differ significantly from the way Mr. Gamble puts it in the film.]

The Dollar and the Sub-prime crisis:

Gamble begins this part with a moot point about the devaluation of the dollar, showing it from 1913 to 2010.

Remember when I discussed the matter of currency in circulation vs. the real value of wealth? Well, this is what happened: when the Federal Reserve came into being, having a regular universally recognized currency made trade easier both on the internal market as well the international market. It made the US economy more open to these markets, generating more trade, and as result more currency started to circulate. To compensate for the new amount of money circulating and more people earning more money, prices rose, because people where consuming more. This effect is called “demand-pull inflation.” This is regarded as the good kind of inflation because it shows that the country is THRIVING.

This doesn’t make people poor. If the prices are rising, so are peoples’ wages. Even if products have higher prices they still hold the same value. (The kind of inflation that rises both price and value is called “cost-push inflation,” and this happens due to the increase of production cost or scarcity. This is the bad kind of inflation).

But why doesn’t the currency return to its original value after a while? This happens because of an economic effect called “built-in inflation,” where past experiences dictate how the wages and prices will rise. Workers expect inflation to pinch in the future, so they start asking for higher wages to compensate. As a result, companies start raising the price of their products so they don’t lose their profit margins. Because this builds over time it becomes something like a change of currency or a hard economic crisis, where money is being hoarded and trading comes to a halt.

Even if you look to Mr. Gamble’s graph you’ll notice the periods when the dollar’s value rose were in the interwar period and during WWII, when US was still suffering from the 1929 stock crash that brought the US economy to its knees, and during WWII where all the US economy was focused on the war effort instead of producing consumer goods and trading. After those periods were over, trading resumed and, as expected, the value of the dollar declined as more currency began circulating again.

http://www.wisegeek.com/what-causes-inflation.htm

https://en.wikipedia.org/wiki/Built-in_inflation

https://en.wikipedia.org/wiki/Cost-push_inflation

https://en.wikipedia.org/wiki/Demand-pull_inflation

Wealth Gap

Same case as the “economic parasite” claim: the gap in wealth is a big problem, but Thrive has the wrong take on what is the cause.

No, I don’t have a magic bullet solution for wealth disparity. No one does. I do, however, support several policies involving fiscal responsibility, fair taxation, better public health and education plans, transparency from both government and corporate business and not reelecting the same politicians with histories of corruption and incompetence.

Bankers and crisis

Gamble tries to correlate the stock crash of 1929 and the Great Depression to the creation of the Fed. Logically correlation does not equal causation. If you take a look at what happened, the stock crash of 1929 was caused by reckless investments on high risk and speculative shares. With the investments boom more people where buying shares and raising market prices. This would only become viable if the stock market kept rising at a quick rate. If the rise wasn’t fast enough, halted or went into a downturn, those shares would lose their value. This was combined with the massive loans stock brokers were making to investors (called “margin”). The investor only had to pay 50% of the share value and the broker would complete the rest with his own money. Thousands of people taking loans to purchase more shares didn’t help as it was creating a massive economic bubble. As expected, once the stock market faced a downturn, mass panic selling followed, forcing the share’s values down creating a cycle where investors had to sell their shares to pay their brokers and avoid losing too much money with shares that by this time had lost all their value.

[Muertos comment: the causes of the Great Depression are still highly controversial today. There is no one clear answer, but what you’ve identified is clearly part of the problem–any basic book on the crash will make this case. It’s also not limited to 1929. I was working in the financial sector during the “dot com bust” of 2000-2001, and much the same thing happened–shares were grossly overvalued, and there was too much credit attached to financial speculation. When dot coms started to post less than impressive profit numbers, the whole thing collapsed. Something similar happened in 2008, except instead of stocks it was financial products tied to real estate.]

It is also worth remembering that the both people buying and selling the shares are normal people, prone to make mistakes, get nervous or act on impulse. This means one bad rumor in a highly volatile place such as the stock market can cause many stocks’ value to plummet. Do this on a large scale and you can get yourself a nice big crisis on your hands.

http://eh.net/encyclopedia/article/Bierman.Crash

http://stocks.fundamentalfinance.com/stock-market-crash-of-1929.php (this is a TL;DR version of the previous link)

I also would like to have access to this “research” Mr. Gamble claims did on the “major banks” moving their money away from the stock market before the crash, because I’m not able to find any reliable link or article showing that this in fact happened.

The 2008’s credit bubble crisis

This is the only thing preventing me to copy paste the debunking of Zeitgeist here and calling it a day.

But where do I start? First Foster Gamble and David Icke and their “research” (really, I’d like to see the data Gamble uses to make his statements) want to lead the viewer to believe the 2008 economic crash was a ploy engineered by the major banks to consolidate their power by breaking smaller business and seizing their assets.

But there are a few problems with this. For one those assets (mostly houses) have become worthless, and the bail outs are not even close to the amount lost by the banks during the crisis. Plus, why create an economic crisis in the first place? The last thing you want, if you’re a banker or an industrialist, is an economic crisis where people stop spending and the economy stagnates.

So what happened in the 2008’s subprime crisis?

It was caused by a combination of lack of foresight, greed, high interest rates, high risk investments and a complete lack of regulations for the financial sector (I can hear from here all the libertarians shrieking in horror after reading this).

Putting it in layman’s terms, before the 2008 crisis the housing sector in United States was one of the most attractive investments for a few reasons. First, the continuous rise of housing prices and the demand for new houses, and second the too low interest rates from the Federal Reserve that were not attractive to the investors anymore (they were around 1% during 2008).

Okay, what was the banks’ deal then?

They were buying the mortgages from lenders and then reselling them to investors looking for investments with better rates. The banks would proceed to lend more money, mostly from other major banks and from central banks, to acquire more mortgages. Then the banks would generate massive profits from all the homeowners paying their mortgages.

So far so good. But for them there was a problem: since this was one relatively safe and high profit deal, the banks wanted more people paying more mortgages on the rising housing prices.

When a financing company sold the mortgages for the banks, if the homeowner went into default the bank would get the house. This was attractive for the bank because the housing prices were rising at the time. This meant that when the mortgage broker sells the house at a new higher price, the lenders and the banks would make a better profit with the new mortgage payers.

Okay, but where do the problems begin?

The number of AAA home buyers (meaning, reliable and financially responsible people) buying houses was too low to sustain the kind of profits they wanted to make selling and flipping mortgages. So, not wanting to miss the opportunity of selling the houses at higher prices and collecting the higher mortgages, the banks and lenders started selling the houses to subprime families (non reliable people) that they knew would go into default in a matter of time so they could resell the house again and again. Major profits were made this way. The lender would sell the mortgage for the banks and then the bank would sell it to an investor willing to take the risk.

With this happening soon the number of houses going into default was increasing. The number of houses being placed on the market for sale was also rising, but the number of people looking for a house was not. Actually most of the people who could afford a house already had one and with the subprime families simply not paying, this was starting to drive the housing prices down. To make things worse, the people who could afford their high mortgages simply started abandoning their houses because now they were worth a fraction of what they used to be worth, and yet their mortgage was the same.

This left the banks with a lot of houses, but with no one paying for them. The banks borrowed massive amounts of money to buy those mortgages, and the lenders had a lot of houses with people who were going into default, and the investors had a lot of high risk deals that have become worthless. The investors were not able to sell the risk to anyone because by this time everyone noticed that things were not going as planned and stopped buying or selling, essentially freezing the banking and the financing market, bankrupting the banks, the investors and the lenders.

And the banks owned a lot of money they couldn’t pay back, usually to other large banks either in US or Europe, thus dragging those banks down into the crisis with them.

This is the simple explanation, but there are other factors that contributed to the crisis. For example, easy credit (it stimulated not only banks to borrow huge sums of money but also common folk), predatory lending (lending deals so long and prone to change that people were deceived into deals that aren’t what they are advertised) and underwriting (banks with mortgages that didn’t meet proper standards and selling them to other banks and investors) and deregulation of the banking industry (this made easier for banks and financing companies to pull their stunts without the government being able to interfere).

This showed that the banking system had serious problems both ethically and financially, but the reality is much less Machiavellian (and boring) than Gamble would you like to believe.

Back to the movie. We have Mr. Gamble explaining the crisis using a fish hook analogy to show how the financial elites consolidate their power. I’d bother to explain who this logic is wrong if I didn’t do it already above.

Again the banks won’t make major profit from a lot of houses with devaluated prices and with their credibility shot.

Gentlemen! Behold the links!

http://crisisofcredit.com/ (a friendly video explanation about how the crisis came to be)

http://www.mortgageguideuk.co.uk/blog/debt/credit-crunch-explained/

http://useconomy.about.com/od/criticalssues/f/What-Is-the-Global-Financial-Crisis-of-2008.htm

http://useconomy.about.com/od/themarkets/f/hedge_funds.htm

http://useconomy.about.com/b/2008/09/23/why-the-bailout-is-necessary.htm

http://www.federalreserve.gov/generalinfo/foia/emergency-lending-financial-crisis-20111206.pdf

http://www.guardian.co.uk/business/2009/apr/21/imf-huge-global-bank-losses

https://www.nytimes.com/2009/04/22/business/global/22fund.html?_r=1

http://beginnersinvest.about.com/od/banking/a/aa062405.htm

“Give me control over a nation’s money and I care not who makes her laws.”–Baron Mayer Amschel Rothschild

I can’t find this quote in any history source or website. The only result that purported to show where it came from besides attributing it to Amschel Rothschild is from The Creature of Jekyll Island.

And it featured in America: Freedom to Fascism.

Too bad Mayer Amschel Rothschild died in 1812, virtually a hundred years before the quote started making its first appearances during the early 20th century.

http://quotes.liberty-tree.ca/quote/mayer_amschel_rothschild_quote_8bed

https://en.wikipedia.org/wiki/America:_Freedom_to_Fascism#Quotation_of_Mayer_Amschel_Rothschild

[Google Books link discussing the quote]

Bank for International Settlements (BIS) and the International Monetary Fund (IMF)

There isn’t much to talk about the BIS and the IMF. The BIS acts like a hub for central banks to organize themselves, regularize the sector and push for transparency on the business. The IMF is a bank responsible for money lending programs enjoyed by its contributors. It is infamous for cases of sheer incompetence due to lack of touch with the reality of the countries they were lending money to or how the assistance programs are perceived by the local population.  Depending on who you ask or which country you’re talking about, the IMF can be either seen as a major tool for the development of a country or just a means for the developed and industrialized nations to explore the undeveloped ones.

Like the Federal Reserve and other “major banks,” Gamble also claims they are controlled by the financial elite.

http://www.bis.org/

http://www.investopedia.com/terms/b/bis.asp#axzz1sXrQrlhd

https://www.imf.org/external/index.htm

http://ifiwatchnet.org/

Conclusion

As with much else in Thrive, the “Follow the Money” section is long on rhetoric and short on identifiable facts. There are oversimplifications, important concepts left out, quotes whose truth can’t be identified, and a lot of distortions. This section isn’t done very much better than any other section in Thrive.

As difficult as this subject is, hopefully this analysis gives you something to work with as you evaluate the claims made by the movie.

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About SlayerX3

The basics: Majoring Computer Science Video-game and Internet addict Metal and Industrial music addict Information Technology enthusiast Weapons and military history enthusiast Major slacker with an anxiety complex Resident smartass Heartless & cruel jokes for free I like to see things burn

78 responses to ““Follow the Money”–Debunked!”

  1. Mr. Anon says :

    I’ve been waiting for this article for some time. I’m looking forward to reading the whole article. Thank you SlayerX3, Muertos, for supplying both sides of the issues that Thrive raises.

    • Mr. Anon says :

      Finished reading the article. I think this is among the most important articles on this blog, as fractional reserve banking is one of Gamble’s key pieces of evidence to back up his Global Domination Agenda.

      • SlayerX3 says :

        So what are your own thoughts on it ?

      • Mr. Anon says :

        I had known the basics of fractional reserve banking for a while, but you’ve explained it in detail. I think a very important point you raised is the fact that the federal reserve can remove dollars from circulation by making banks keep a higher percentage of their money in reserve, and by increasing interest rates. You also did a good job explaining that even when the fed pumps more money into the economy, it doesn’t necessarily create inflation.

    • John drake says :

      All is true but the real problem is the Federal reserve is privately owned. If the F.R. was government owned all the interest generated by loans the F.R. is making would be collected my the government and returned to societ by investing in the country. Now, the taxpayers are in debt and the bankers are rich!

  2. Mason Bilderberg says :

    Reblogged this on Illuminutti and commented:
    From Thrive Debunked …

  3. DiscoPro_Joe says :

    Interesting article, which certainly clears up some of the conspiracy theories and false quotes about banking that I’ve sometimes heard and read. (As a hardcore libertarian, though, my beliefs about politics and economics haven’t budged a bit.)

    While I have no desire to debate politics or economics on this site, I’d like to point out that most libertarians aren’t necessarily opposed to fractional reserve banking. Instead, it’s *central* banking and fiat currencies that libertarians are against. In a true free market in banking and currencies, there’d most likely be a huge variety of banking styles and currency types. This system certainly would have its own share of problems, of course, but libertarians believe this system would be dramatically better than the existing one. (Nonlibertarians, obviously, would disagree.)

    An awesome article that describes such a system possibly emerging in the future is entitled, “Gold in the Information Age” by Adam Hamilton, written in 2002. In fact, if you read just one article about gold, let it be this one! (Google it.)

    As with most libertarians, my favorite authors on economics and monetary policy include Peter Schiff, Jim Rogers, Marc Faber, and lesser-known ones such as “VisionVictory” (on YouTube), Adam Hamilton, and Nelson Hultberg. My favorite author Harry Browne also wrote a plethora of books and articles about these topics as well.

    Very few of these authors — if any — spout many conspiracy theories. In fact, Harry Browne and Adam Hamilton have repeatedly denounced them.

    Now yes…there are some reckless prognosticators out there like Aaron Russo, Alex Jones, and Foster Gamble, who aimlessly spew forth tabloid nonsense. But luckily, large numbers of libertarians have shunned them. (Harry Browne personally loathed Aaron Russo, by the way.)

    Anyway, I totally expect the comments section of this article to fill up fast with other passionate libertarians defending sound money and free markets! But thanks, though, for shedding some light on the false theories and quotes that needed to be exposed as the empty arguments that they are.

  4. Dustin says :

    I appreciate what you’re doing here. I also respect that it’s difficult to write about the intersection of banking and politics. In my opinion this is not a very strong article.
    – numerous gramatical errors ex:
    “Later Gamble states how FRB is used to create a population that is tied to their debts to the bank.”
    – Unfocused.
    – Doesn’t focus as much on errors in the film.
    – Rambling

    • Dustin says :

      for example:

      I’m using Wikipedia for two reasons: (1) Simplicity, and (2) it works well for summaries of information, even though I will provide further sources and more detailed information links than Wikipedia can provide.

      PS: This part of the movie is incredibly complicated for anyone involved here to deal with, as given that most people don’t understand how economy and politics work by themselves, much less together, unless you’re well-versed in mathematics, economics or political science. Comments that simply complain about how wrong or rigged the actual political and economic systems are will be seen basically as an opinion and not fact.


      Could simply read:

      The interplay of banking and politics is a complex subject. I’ll start w some wikipedia links for basic topics and provide more advanced sources for in-depth topics.

      However, such a “disclaimer” is unnecessary, if you simply do it.

      Again, I’m a huge fan of this blog and I’m very impressed by what you’re doing here.

      • SlayerX3 says :

        I did so to overstate how hard is to hold actual authority on the subject and to give no ideas to others that we’re claiming to be economy experts.

        Even though english is not my primary language, I take pride on having a decent english for a non native speaker but sadly there are phrasing structures I’m not familiar with, so there will some awkward sentences I have no idea how to properly correct.

        That aside, I’m glad the initial response to this part of the debunk is being quite positive.

      • Dustin says :

        sorry, did not know that English is a second language for you. My apologies!

  5. Dustin says :

    Actually, I think you should seriously consider taking this post down and rewrite it w/out gramatical errors. Another example:

    In time of a stable economy this not bad for financially responsible people, those who take out loans that are smaller than their average yearly income and can make sure that the accumulated interest won’t surpass all their earnings during the intended financing period. Take for example financing the purchase of a house with a 10 year mortgage plan. It is, however, extremely dangerous for people who to borrow who are in unstable financial situations

    • muertos says :

      Dustin, thanks for your feedback. I did a lot of editing on the original article but I didn’t catch everything–and as SlayerX3 has said, English isn’t his first language. I think it’s important that we have an article up on the blog that deals with the banking and financial aspects of Thrive. I’ll be correcting some of the grammar and syntax as I catch more errors, but I think the concepts and arguments in SlayerX3’s post are valid and persuasive even if the language gets a little muddled…certainly more coherent than the illogical mishmash that Thrive passes off as fact!

  6. A.M. Turing says :

    Well written article. You did a good job at explaining how Fractional Reserve Banking works. It’s unfortunate that there is a great deal of misinformation on this particular subject out there on the internet.

  7. bluecollarcritic says :

    I must say this was a very slick article, very well written. If one weren’t familiar with economics and domestic fiscal policies not to mention banking they would not have noticed the very subtle switch done with regards to the description of Fractional Reserve banking or FRB.

    Since FRB is key to fiscal domination is key that one understand what FRB was supposed to be versus what it is. To keep it simple and easy to follow we’ll use the %10 figure.

    FRB was designed to allow for commerce/banking in away so that there was flexibility in the system so that the money supply could shrink and expand as needed. Originally an institution such as a bank was required to keep on hand a percentage of its total funds (the funds of its depositors) while lending out the rest. If a bank had 1 million in deposits it was required to keep only %10 of that (100,000) and the rest could be loaned out. This promoted economic growth and is something I doubt few would find fault with. So whats wrong with this articles explanation of FRB and why does it differ from what is explained in the THRIVE film?

    The article carefully skips over the part about FRB where the financial institutions did a reverse of action and went from keeping a small percentage of funds on hand to keeping most of it on hand and claiming that was its %10 and then creating an additional %900 worth of funds out of thin air.

    In this same example a bank that has $1million in deposits now claims it has 10 Million in deposits and so long as it retains the original 1 million then it can keep making use of $9 million that never existed. This of course assumes the bank sticks with the 10:1 ration where it keeps %10 of funds on hand. Banks of course ignored that 10:1 rule (known as leveraging) and started leveraging at many times that rate going anywhere from a modest 20:1 up to 75:1.

    BTW – The Federal Reserve Bank is a private institution and it matters not that the president is allowed to appoint the head of the bank; that is just for show. For years anyone who tried to point out the FRB was not part of government was labeled a conspiracy theorists. For decades RON PAUL has warned of the Federal Reserve and low and behold he was right.

    IN CLOSING:

    During the Clinton administration the Glass-Steagall act (or Bank Act) of 1933 was repealed, at least specific portions of it were . This act established the FDIC, something the above includes. Its interesting to note that Muertos choose to leave out the fact that the same act that established the FDIC also included provisions that restricted affiliations between banks and securities firms and that these same provisions were repealed during the Clinton administration. This is important because many have pointed to this repeal of the Glass-Steagall act as the starting point for what eventually lead to the 2008 crisis.

    Whether you believe the appeal of Glass-Steagell contributed to the 2008 crisis or not the one thing that no one can deny not even the Thrive Debunker is that after all this was said and done the government has still done nothing to prevent future occurrences. The so called Finance Reform bill passed in 2010 allowed banks to continue dealing with derivatives which are the monetary weapons of financial destruction. Currently the sum total of financial derivatives far out numbers the GDP of the planet many times over. More importantly, those pieces of garbage are being used to prop up the economy are very close to collapse.

    Regardless of what the Thrive Debunked website tries to convince you of remember this, the nature of government is to secure for itself growth and power and anyone refusing to see whats going on around them is a fool. The idea that a power grab by the worlds elite just can’t be happening because we (the populace) would see it is utter non-sense. The Germans were suckered by Hitler and the Nazis and they were far more obvious as to their intent that our current political leaders.

    • Mr. Anon says :

      “BTW – The Federal Reserve Bank is a private institution and it matters not that the president is allowed to appoint the head of the bank; that is just for show. For years anyone who tried to point out the FRB was not part of government was labeled a conspiracy theorists. For decades RON PAUL has warned of the Federal Reserve and low and behold he was right. ”

      Is the Supreme Court a private institution? Are Amtrak and USPS private institutions? No they are not.

  8. nothings wrong says :

    Thanks ,I knew there there was no such things as Aliens. And for all that other stuff, well we have the power of our vote. Now if you’ll excuse me I have to Fox News right now, Bill O’reilly’s show is on!

  9. Jack Strange says :

    When I was first pulling away from conspiracies, wikipedia was a very handy reference for sorting out different views and perspectives when looking at each case. I think people are a tad overly critical of wikipedia, even these days there are school text books and regular encyclopedias which still feature bad history every now and then. Its a situation of everyone thinking that anything more official is infallible and things that are amatuer must be a bunch of hillbillies gone cyber.
    There’s a ton of neat articles on Wikipedia, and as long as you double check everything and don’t trust it alone, it has usually worked okay with me. But, I also suppose that if you guys are looking up more controversial people then you might get users battling amongst each other for what they wanna say. Plus every now and then (like with the Chris Benoit thing) you’ll get a wikiuser that writes up something weird and causes a stir.

    • muertos says :

      I actually did some research on the reliability of Wikipedia for a project I was working on. Its accuracy rate is pretty surprising. The real value of Wikipedia is in the sources it cites, especially the printed ones–books, articles, non-Internet based sources that you actually have to go to a library (GASP!) to find. Every time I’ve checked a footnote on Wikipedia against a printed source that it cites, it’s been spot-on.

  10. bensteigmann says :

    Without directly addressing the content, a refutation of the general themes of this article is provided here: http://www.gnosticmedia.com/george-hunt-interview-say-what-is-unced-the-elite-and-the-environmental-movement-135/#comment-2827

    I would like to reiterate what I posted in the “GDE” section:

    Irving Fisher was hailed by Milton Friedman as “the greatest economist the United States has ever produced.”: http://tinyurl.com/7bv9nds

    Robert Hemphill was the first credit manager of the Atlanta Federal Reserve, who wished to end fractional reserve lending, believing instead that banks should keep 100% reserves, and collaborated with Fisher on this: http://tinyurl.com/82axvkj

    He drafted a bill that Fisher supported called S.3744:: http://tinyurl.com/8a84x7l

    He noted, in the forward to Fisher’s text 100% Money, the following:

    “If all bank loans were paid, no one would have a bank deposit, and there would not be a dollar of currency or coin in circulation.

    This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money, we are prosperous; if not, we starve. We are absolutely without a permanent monetary system.

    When one gets a complete grasp upon this picture, the tragic absurdity of our helpless position is almost incredible, but there it is.”: http://tinyurl.com/89sh76f

    This is by no means local to the U.S. In 1960 the Radcliffe Committee examined the functions of the Bank of England. Vol. 1, Memoranda of Evidence (from the committee investigation), stated (p. 9. 4.: http://tinyurl.com/6mefpag) – “Because an entry in the books of a bank has come to be generally acceptable in place of cash it is possible for banks to create the equivalent of cash [i.e. – credit]. Thus a bank may pay for a security purchased from a customer merely by making an entry in its books to the credit of that customers account; or it may make an advance by means of a similar entry. In either case an increase in it’s deposits will occur.”

    The New Zealand Report of the Royal Commission on Monetary, Banking, and Credit Systems, published in 1956, stated:

    “The fact that a large proportion of our money supply comes into existence as a result of the operations of the trading banks obviously disturbed many witnesses who appeared before us.” (http://tinyurl.com/7sfonbx)

    Commenting on all this, Hemphill stated, before the House of Representatives:

    “… there has been for 200 years, since one certain man came into power as a financial genius, Mayer Anselm Rothschild, who was born in 1790 since he came into power there has been a constant, organized, shrewd conspiracy to convince the people of the world that this is not true, to convince men against their own judgment, against a thing which is self-evident.

    And that conspiracy has involved the press, it has involved the pulpit, it has involved our a conspiracy to mislead people about the importance of a very simple thing – money.

    The interests who promote this confusion profit by retaining for themselves the monopoly of manufacturing our money.”: http://tinyurl.com/8x2oqvv

  11. bensteigmann says :

    An author who delves into this in great detail, is Stephen Zarlenga, in his text “The Lost Science of Money”: http://www.monetary.org/

  12. Karma Tinfoil says :

    The Fed still makes money out of thin air, it’s as big a scam as this article.
    bluecollarcritic seems to be the only person actually paying attention.

    • muertos says :

      No; the Fed does not “make money out of thin air.” Try reading the article next time. Thanks!

      • bensteigmann says :

        See the interrogation of Federal Reserve Chairman Marriner Eccles in the HEARING BEFORE THE COMMITTEE ON BANKING AND CURRENCY HOUSE OF REPRESENTATIVES EIGHTIETH CONGRESS FIRST SESSION ON H. R. 2233: http://fraser.stlouisfed.org/historicaldocs/678/download/68568/1947hr_directpurchgov.pdf

        p. 31:

        Mr. PATMAN. NOW, in order to get our definitions straight a little
        further, our economy is based upon debt; our bank system and our
        money are based on debt; that is right, is it not?
        Mr. ECCLES. Money is created by bank credit.
        Mr. PATMAN. Yes.
        Mr. ECCLES. That is right. And the bank reserves are created by
        the central bank.
        Mr. PATMAN. With some exceptions, if all the people were to pay
        their debts to the banks and the United States Government should
        pay its debts, there would not be any money to do business with,
        would there, except just a little, like Civil War money, and coins, and
        things like that, probably about four or five billion dollars; is that
        not right?
        Mr. ECCLES. That is right. That is what happened after 1929.
        With debt contraction-we have never had a period of prosperity
        when there has not been an expansion of debt on balance, by either
        the Government or by the private individuals or corporations, or by
        both. Whenever debt has contracted on balance, you have had a
        depression. From 1929 to 1933 I think there was a total debt con-
        traction, as I recall, of something like $30,000,000,000. This was bank
        debt and also private debt.
        Mr. PATMAN. Well, is the reason not obvious, that since our money
        is based upon debt, and our bank system also, and money is created
        through the bank system by debt, that we can only be prosperous if
        we go into debt, and if we pay our debts, why, we are in a depression;
        is that not right?
        Mr. ECCLES. YOU have got to distinguish between bank debt and
        debt outside of the bank. The expansion of debt to the banks creates
        deposits and deposits, of course, are always available to be withdrawn
        as currency. In other words, the growth of debts to banks, whether
        in the form of public debt, such as the ownership of Government
        bonds, municipal debt, or private debt, creates deposits. That is
        where the great growth of bank deposits has come from, largely
        through the growth of debt, and largely Government debt. And
        that, of course, is responsible for our very large, what we term, money
        supply.

        See also the following exchange given in the Hearings on the Retirement of Federal Reserve bank stock, Volumes 1-2, p. 41: http://tinyurl.com/3grzccz , http://tinyurl.com/3smsc2b

        PATMAN: “Now Mr. Allen, when the Federal Reserve Open Market Committee buys a million dollar bond you create the money on the credit of the Nation to pay for that bond, don’t you?
        ALLEN: That is correct.
        PATMAN: And the credit of the Nation is represented by Federal Reserve Notes in that case, isn’t it? If the banks want the actual money, you give Federal Reserve notes in payment, don’t you?
        ALLEN: That could be done, but nobody wants the Federal Reserve notes.
        PATMAN: Nobody wants them, because the banks would rather have the credit as reserves.”

      • muertos says :

        More cut and paste crap that you haven’t even read, Ben? I guess things never change.

      • bensteigmann says :

        Except I have read it. It’s comfortable making that assumption, but the facts are there. And these facts exist independently of our personal opinions.

  13. Karma Tinfoil says :

    Actually i read the article, & it basically comes down to you using the Strawman Fallacy in the “Does it really “create money out of nowhere?”” section of this blog.changing the attack from money out of thin air, into (assumed) created value. http://nizkor.org/features/fallacies/straw-man.html

    “The 2008’s credit bubble crisis

    This is the only thing preventing me to copy paste the debunking of Zeitgeist here and calling it a day.” yeah that link doesn’t debunk anything when i click on it, so more buffalo chips here. & To continue, you never address the Boom(Expansion)/Bust(contraction) of the money cycle, which caused the theft of American Land from it’s owners to the banks, through foreclosures. i’m guessing you left part out because you have no defense for it.

    & of your list of relationships to the Federal Reserve, none of them hold sway over their decision making process.

    You’ve created a wonderful pack of lies here, you should get a job with Fox News or maybe even the government, put your propaganda creating skills to better use in a mass market, so you can maximize your profits!

    • anticultist says :

      If the crux of your indifference to a single point made in the blog is that of a mere straw man, then your argument failed.

      Try arguing the point and showing exactly why it is incorrect as opposed to trying to sound smart with an amateur rhetorical logic assault.

      • Antonio M says :

        Stop pulling your punches, Bro… Let this whack job know what’s really going on… Break it down for these conspiracy nuts…

  14. Roman says :

    “[…], I’ll keep my sense of disbelief about the big government suppressing her findings, specially someone with credentials and political reach like her. (Blogs or forums do not count as reliable source; I’m talking about newspaper articles or public data […]” –Muertos

    Here you go.
    Just add the government’s stupidity, which certainly wasn’t aware of the banker’s methods.

    You may wanna update yourself on the practise of such men and women:

    Short-selling litigation – An enlightening mistake
    http://www.economist.com/node/21555472

    “Goldman and Merrill have denied throughout that they participated in any sort of naked-shorting conspiracy. Their supporters argue that the legal action brought by Overstock is a crude tactic by Patrick Byrne, the retailer’s mercurial boss, to divert attention away from its long history of underperformance.”

    Now even main media talks about conspiracy.

    Got it from German heise online website, Google translated version: http://goo.gl/9d8Ok

    Further references:

    Accidentally Released – and Incredibly Embarrassing – Documents Show How Goldman et al Engaged in ‘Naked Short Selling’
    http://www.rollingstone.com/politics/blogs/taibblog/accidentally-released-and-incredibly-embarrassing-documents-show-how-goldman-et-al-engaged-in-naked-short-selling-20120515

    Goldman, Merrill E-Mails Show Naked Shorting, Filing Says
    http://www.bloomberg.com/news/2012-05-15/goldman-merrill-e-mails-show-naked-shorting-filing-says.html

    Now please tell me their bosses didn’t know anything and it was no ones or everyones fault. Or maybe it was an one-time job done by some individuals lolling themselves in reckless greed or devious glee. Maybe people are just stupid.. still following the money..

    • anticultist says :

      And greed and corruption are indicitave of what exactly ?

      Oh yeah greed and corruption !

      Lulz, does that indicate anything else they might be complicit in ?

      Or shall we just throw more ridiculous conjecture onto the pile and pretend they did it to ruin the planet and imprison us all ?

      • Roman says :

        After all they never want to talk about complementary currencies as a possible (and well tested) alternative.. Still they cling to their one-party fiscal politics.

        Not even a thought about a multi-layered monetary system – no, it all has to stay as centered as possible.

        imho this forces a hierarchical structure of decision makers, starting with the consuming individual, to the waiter of the local thrift(?) and leads to the actual head of the IWF (would this be the “public” top of monetary evil?).
        I miss out the governments, they just failed in regulation (you/we agree?).

        I posted the contract for the European Stability Mechanism a while ago, pointing out their universal judicial immunity, undemocratic management and intransparent scrutiny.
        http://ec.europa.eu/economy_finance/articles/financial_operations/2011-07-11-esm-treaty_en.htm
        +
        http://consilium.europa.eu/homepage/showfocus?lang=en&focusID=79757

        You may have fun debunking this short explanation of the ESM: http://www.youtube.com/watch?v=jSk5fWIB524

        If you’re sensible to ridiculousness, you might wanna read this contract.
        “Article 9.3
        […] ESM Members hereby irrevocably and unconditionally undertake to pay on demand any capital call made on them by the Managing Director pursuant to this paragraph, such demand to be paid within seven days of receipt. […]”

        7 days, they certainly share your sarcasm🙂

        And these folks did it just by themeselves. Without including the people. Most things in silence until Spring 2011. Sounds.. conspiratorial.

        Now this is serious and by all means no fun. Like the old fashioned pressure of accretion, but worse making everything worse. There you go, this is my bottom line. Like a row of dominoes every nation will face Greece’s situation, making fewer richer and far more poorer.

        I see a chance in diversity, biological and economical. There’re thousands of projects in the world approving complementary currencies (well analysed by Bernhard Lietaer, here is a nice TEDxTalk of him in Berlin: http://www.youtube.com/watch?v=nORI8r3JIyw)
        But yet none of our leaders and banking geniuses are smart enough to figure something out with this. Instead, we the people have to seize our chance: non-profit-orientated, transparent, democratic, without interest and fractional reserve banking. In Germany there’re actual 25 circulating complementary currencies, in Japan more than 600!

        And a tragic anecdote at the end:
        There was this Austrian town called Wörgl, totally suffering from inflation and unemployment by 1932. The major had an idea and printed an emergancy currency, which solved their crisis within months. It worked brilliant for 13 months, then the National Bank stopped the project, because it was competitive to the national currency. It worked and helped the people, but it just was a threat to the bank’s power (my interpretation). Soon Wörgl was back in the crisis..

        Now this is fact, ask Muertos..

      • anticultist says :

        Greed & Corruption do not a monster make.

  15. Roman says :

    “anticultist says : June 13, 2012 at 8:51 am
    Greed & Corruption do not a monster make.”

    Power doesn’t corrupt and money doesn’t arouse greed?

    Psychology does:

    1. Higher social class predicts increased unethical behavior
    http://www.pnas.org/content/early/2012/02/21/1118373109.abstract

    2. Holding a Gun Makes You Think Others Are Too
    http://www.sciencedaily.com/releases/2012/03/120321152627.htm

    3. Using ‘The Corporation’ As A Powerful Illustration Of Ethical Issues Facing The Financial Manager
    http://cluteonline.com/journals/index.php/JBCS/article/view/4810

    4. Profile of a fraudster
    http://www.kpmg.com/cn/en/issuesandinsights/articlespublications/pages/profile-of-a-fraudster-o-201107.aspx

  16. Ben p says :

    You work for them it’s obvious your a Zionist

  17. jIM says :

    This article is a joke. The Board members of the Federal Reserve make loans in the billions to themselves for very near zero interest.

    Why has our country from the start fought to keep the central bank out of America?

    Why did it take a Christmas congress to put it in place? (sounds like a conspiracy to me)

    Anyone who thinks it is fair for the Central Bank to create money out of thin air while the rest of us have to work for it is a nut case. .

    When I look on Forbes and other publication they always list some Mexican phone man as the worlds richest man… What happened to the Rothschild, Rockefeller, and Morgans? How is the richest men in the world never make these publications? (another conspiracy?)

    • Lee says :

      “The Board members of the Federal Reserve make loans in the billions to themselves for very near zero interest.”

      Such assertion require evidence.

      “Why has our country from the start fought to keep the central bank out of America?”

      I thought it was because of taxation without representation.

      “Why did it take a Christmas congress to put it in place? (sounds like a conspiracy to me)”

      Whether it’s the Christmas or Hanukkah congress who put it in place is not a sign of conspiracy.

      “Anyone who thinks it is fair for the Central Bank to create money out of thin air while the rest of us have to work for it is a nut case.”

      Fortunately, no money is made out of thin air.

      “When I look on Forbes and other publication they always list some Mexican phone man as the worlds richest man… What happened to the Rothschild, Rockefeller, and Morgans?”

      They’re still rich, just not the richest anymore IINM.

    • Mr. Anon says :

      I think the loans thing is based on the fact that some Fed members have connections to Wall Street, and during the recession the Fed gave a large loan (billions of dollars) to several failing banks. Most of that has been paid off. The Fed also reduced the interest rate to zero, which benefited many local banks and helped stop a Great Depression. However, the claim that members of the Federal Reserve are giving money directly to “themselves” is not true. Actually, the fact that conflicts of interest are currently being investigated by prominent Senators proves that this is NOT a conspiracy, but just corruption in the Board. The solution is not to end the Fed, just to have more oversight.

  18. Antonio M says :

    [Muertos comment: this has been proven time and time again historically, such as in the U.S. when “greenbacks” were printed to help finance the Civil War. It didn’t work then either.]

    What are “greenbacks”? I thought that was the nickname for the American Dollar…

  19. rozen says :

    “…central banks are trusted institutions, and they are an effective way to control interest rates and the amount of money being circulated so as to make sure hyperinflation or hyper-deflation do not take place…”

    And yet, almost every country suffered from hyperinflation at some point in recent History. How do you explain that?

    The Century of Inflation – http://alturl.com/tedy7

    • Mr. Anon says :

      As the article pointed out, inflation in the United States is not out of control. Although prices rise, wages also rise to balance it out. Compare to countries like Zimbabwe, where prices rise far faster than wages, making currency in general worthless.

      • rozen says :

        So what you’re saying is that hyperinflation occurs in modern economies (not only US, see my link) not because of how the central banking system works, but in spite of it?

    • SlayerX3 says :

      These recent Hyper-inflation issues were mostly due to messed up economic politics. Specially lack of oversight, politicians who don’t understand how the economy works and trying to “fix” the problem by just printing more money.

      For example the Weimar Republic and the Brazilian inflations from 70’s to late 80’s were due to governments pushing the central bank to print currency and force their circulation in excess, this resulted in too much money sitting around but not changing hands for goods and services. This caused a massive devaluation of said countries currencies aggravating the economic issues.

      Banks can make bad calls but shit happens mostly when populist/desperate governments try to put their hands on central banks to make a “quick fix” on economic problems.

  20. sorbes says :

    This article is really fantastic. I didn’t see Thrive, but my parents have been spouting this nonsense for years now. It’s so refreshing to feel like I’m being educated instead of persuaded.

    You did a great job describing the way the Federal Reserve works, as well as the housing crisis, and general economics. Felt like a throwback to college economics.

    Thanks again, guys, for putting in so much effort to educate the lazy masses.

  21. Sha (@Suga_Shane) says :

    After reading this I realized that the author of this post and this blog is absolutely clueless about the world.

    YOU DON’T EVEN KNOW THAT THE FEDERAL RESERVE IS A PRIVATE BANK!?!?!?!?!?!

    • Lee says :

      Mr. Shane. The Federal Reserve isn’t a private bank. It’s a government agency run by a committee which includes private banks.

      Here’s an analogy. If USPS is run by a committee which includes FedEx, UPS and DHL does that mean it has become a private postal corporation?

      Of course not.

  22. Bruce Nolsen says :

    Although I agree to all of your points and Thrive is nothing but another New Age gimmick but your defense of FED is astonishing. Your argument that a democratically elected president can potentially abuse the system but not by the privately (rich greedy non-elected people) owned banks is wrong. Currently the FED can not be even audited and it is spending people’s money without the approval and audit of congress who are representative of the people. This is completely against the principles of democracy.

  23. Stvie Mac says :

    If I were to write a blog, I would not choose a subject I knew nothing about and did not understand. In this case debunking is futile as references cannot be evaluated.

    Why did you even bother? When you watched the film you clearly knew nothing about the Federal Reserve, and you still don’t.
    If you did not have time to learn you should have put off writing this blog until you did.

    Fractional Reserve Banking
    This is currency creation. The bank is able to loan this money at interest in return for a claim against an asset.

    This guarantees the bank income, or the proceeds of an asset at no cost. should the loan not be repaid, the capital cost to the bank is zero.

    The reserve ratio of 9:1 allows the banking system as a whole to lend out up to 10x what is on deposit if all loans are deposited in another bank.

    The banks can potentially earn 10x the interest rate on their capital.

    Why is this bad
    Every dollar created is created as debt with interest. No matter who holds that dollar, somebody had to borrow it. Somebody owes interest on it. The cost is borne by us all since liabilities get added to the price of products and services.

    The net result is banks extract real wealth from the economy in return for bank credit, which has zero real value. Worse still, each debt that is repaid reduced the amount of currency in circulation, slowing down economic activity.

    Example:
    Imagine there are two traders.

    A has bottles of drink
    B has sandwiches and $1.

    They want to trade but can’t barter, they have to use currency. A needs a sandwich, and B needs a drink.

    1. B uses the dollar to buy a drink from A.
    2. A now has a dollar to use to buy a sandwich from B.

    They have just traded goods, the dollar was an irrelevant token. But remove that dollar and they can no longer trade. The economy has stalled, we have a depression.

    Scaled up, this is what we are seeing now.

    The only thing you have debunked is the idea that you only blog about things you understand. Pity, you have some nice blog titles, but without integrity is isn’t worth much.

  24. Blake Hoss says :

    Here’s a very simple comment about your article. It is a mountain heap of lies piled on top of the truth.

    The truth is simple, FRB was created by bankers to further improve their profit margins. The Rothschild were one of the earliest families to do this, which then gave them enough money and power to instigate and finance wars to leverage their power to install Central Banks in countries, starting with England and France.

    It had NOTHING to do with creating a prosperous economy. It had everything to do with providing DRUGS to a JUNKIE. You provide a loan to someone who needs money, and you’ll know it takes NO SELLING, they’ll gladly take it. This is the idea of CREDIT spread like wildfire. And it’s not because we don’t KNOW better, it’s because we are manufactured to be CONSUMERS and to WANT more than we NEED, and our only means is CREDIT, which is the ultimate form of interest.

    The FED is a private company which operates outside of our government. In fact, it pretty much owns our government for it funds all candidates and helps with their exposure in media. If the chairman and board have to be selected by our government, it’s by design…It’s like having your slave, publicly nominate you as his owner…

    Take a moment and read the FULL KENNEDY speech, here:
    http://forum.prisonplanet.com/index.php?topic=112158.0

    Focus on this paragraph, “For we are opposed around the world by a monolithic and ruthless conspiracy that relies primarily on covert means for expanding its sphere of influence–on infiltration instead of invasion, on subversion instead of elections, on intimidation instead of free choice, on guerrillas by night instead of armies by day. It is a system which has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific and political operations.”

    JFK was the last real president this country ever saw. Afterwhich, the elites realized they cannot afford another person in power that they could not fully control, so they rigged the game. Every candidate from then on was made SURE to understand their role as a puppet. If they diverged, they would meet JFKs end…

    Finally, the reason why all these elites have always been so “Philanthropic” when it comes to religion, is simple: Religion is what keeps the poor man from murdering the rich.

    Add that to the fact that were are losing more and more of our birth rights every year, with crazy shootings and attacks, we won’t have the ability to even CAUSE change.

    • anticultist says :

      snore, too many random caps in your conspiracy theory to take you serious.

    • Frankie says :

      What we dont have the ability to change is your lack of critical thinking and wooism. You say how They rigged the fucking game, when in fact, the fault lies on US!!! because we as a whole dont participate much in politics and shit.
      Instead of blaming imaginary enemies, look at a mirror. It is people like you, conspiratards, who are retarding the country’s growth.
      I know i am condescensing, but you nitwits make me lose my patience. I really had to force myself through your post, because it was something that can rote one’s IQ like shit on a dump full of maggots. I really hate how you nutters like to blame anything that is outside us to controll. Nutters either blame reptilians, NWO, the Rockefeller’s, gays, blacks, jews, the patriarchy, etc. (being black or gay isnt evil, i am not racist, and i am very pro LGBTQ) The fucking fault lies on us as a species, because we blame evil fictitious bullshit to not be responsible for ourselves and do something more productive instead of reading nitwitesque books about reptilians and pyramids with eyes. Seriously, the other day i went to barnes and noble and some nitwit left a conspiratard book on one of the coffee tables. It was by none other than the king of nutter-butter: David Icke. I saw the thickness of the book and i went: Geez! All this paper wasted in this shit?!
      It is seriously a waste of fucking trees, and if nature was conscious, she would mock and spank you for writing all this bullshit on paper. You fucking nutbags have no respect for the trees we killed, and i dont mean it in an animistic way, i mean to say that trees arent here to stay forever, and we better use them wisely, and not in woo woo crap.
      Good night and have a nice day.

      PS: I found more quantum-woo books on the science section and I did everyone a favor and moved them to the new-age section.

  25. John D. Fiat says :

    This article is a pretty entertaining whitewash, but that’s about all it is. I haven’t even seen the movie Thrive, but I want to now. According to Muertos, Bill Still, a man that claimed that the Federal Reserve is a a private institution, insulted everyone’s intelligence by saying that the FED are not part of the government because they are listed in the white pages and not the government pages (of the phone book). This is not an insult, it is a small, yet very telling fact! But just in case SlayerX3 and Muertos need better examples (proof) of the FED not being a government agency, I’ve got a boatload of them. 1) The FED is not organized within the Executive, Legislative, or Judicial branches of the US government. 2) Who pays the Fed’s bills and determines it’s budget? Not any part of our government. The FED gets its funding from its own specially privileged operations. The FED Board determines FED budgets. 3) Who monitors and oversees FED activities? Again, the FED itself. While some important elements of proper auditing have taken place, there has not yet been a comprehensive independent audit by the Government Accountability Office. 4) Federal Reserve employees are not part of the US Civil Service System and are not covered by government employees’ health insurance or pension programs. 5) Who does the hiring and firing at the FED? Well, with the exception of the highly publicized Chairman and a seven member Washington Board, this is in private, unelected hands. Furthermore, several legal proceedings further illuminate the private aspects of the FED. Here is one of them! 6) John L. Lewis was injured by a car owned by the San Francisco FED and sued the U.S. Government for damages. The district court dismissed the case, holding the the Federal Reserve Bank is not a federal agency.

    Here is the case information. Please read it for yourselves!

    JOHN L. LEWIS, Plaintiff/Appellant, vs. UNITED STATES OF AMERICA, Defendant/Appellee.
    (No. 80-5905, UNITED STATES COURT OF APPEALS, NINTH CIRCUIT
    680 F.2d 1239; 1982 U.S. App. LEXIS 20002; March 2, 1982, Submitted; April 19, 1982, Decided)
    [Lewis had been injured by a car owned by the San Francisco Fed and sued the US Government for damages. Note that this ruling particularly applies to the regional Federal Reserve Banks, not necessarily the Federal Reserve Board. Thus even more ambiguity!]
    Excerpts from the ruling:
    The district court dismissed, holding that the Federal Reserve Bank is not a federal agency within the meaning of the Federal Reserve Act and that the court therefore lacked subject matter jurisdiction….
    “Federal agency” is defined as: the executive departments, the military departments, independent establishments of the United States, and corporations acting primarily as instrumentalities of the United States, but does not include any contractors with the United States.

    How’s that for proof?

    And I noticed that all of the writers on ThriveDebunked are extremely biased and close-minded individuals (perhaps even shills). For example, Muertos claims that conspiracy theorists love to use fake quotes. Who loves to cite anything fake? Even if a so-called conspiracy theorist knowingly made a false quote, I’m sure that he would have rather found a real one. This is failed logic! But that’s the thinking of these so-called debunkers. In their mind any quote that they don’t agree with is either fake or was taken out of context (the left-wing’s favorite argument). And while that may be true in some cases, it’s very disingenuous to say this in generalalities, because even when real and well-documented quotes are presented to these guys, they find a way to whitewash them with claims that are usually silly and/or outrageous. And while they complain about “false” conspiracies on the internet, they make no mention of the much more profound indoctrination (i.e. disinformation) that is being hammered into the brains of the masses by the MSM, our government, and themselves. Plus, many of the writers on ThriveDebunked are well-known mainstream authors and opinion makers (especially Michael Barkun). So whatever they say, true or not, it is much more likely to be believed by the masses than is anything on youtube. So what are they complaining about? And just like the claims made by the establishment (gov & media), the claims made by these guys are repeated so often that they have a funny way of becoming true. Can you say Joseph Goebbels? (yes, I turned their own logic back on them. again). SlayerX3, claims that the Henry Ford quote “appears to be completely fake.” Well, appears to be and is, are two very different things! He knows that he doesn’t have any proof to support this, so he is really saying this, ” I think and hope that it’s fake because that supports my unfounded claim.”

    And speaking of quotes, here is a TRUE one by David Rockefeller. And it is indisputable!

    “For more than a century ideological extremists at either end of the political spectrum have seized upon well-publicized incidents … to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure—one world, if you will. If that’s the charge, I stand guilty, and I am proud of it.” – David Rockefeller (Memoirs, 2002)

    Case in point! When analyzing this infamous quote by David Rockefeller, Michael Barkun claimed that Mr. Rockefeller was being facetious when making it. Really? How could he possibly know this? Did he ask him? No. But even he did, do you think that we could actually trust the word of David Rockefeller? But it doesn’t matter regardless, because we know for a certainty that Mr. Barkun didn’t ask him. For if he did, he would have told us all about it. He was simply making an assumption that supports his beliefs and passing it off as truth. But of course, that doesn’t make it true. So, as you can see, when it comes to debating conspiracies with these guys, there is a huge double-standard in place. It’s one rule for them (the opponents), and quite another for the proponents. According to them, It’s not OK for conspiracy theorists to assume anything, but they should be allowed to assume something anytime they wish, because after all, no conspiracies are real (wink, wink). And do these guys even understand what the definition of the word “conspiracy” is? Anytime people agree to meet somewhere it is technically, a conspiracy. Several people conspired to design, construct, and write articles on this website, but that doesn’t make them criminals or “theorists.” Sure, they might be gullible, establishment waving, MSM headline believing fools, but not criminals. Do you see what a joke this is (and they are)? Along with their cohorts in the MSM, these people have successfully indoctrinated the masses into playing a word association game when it comes to the word conspiracy. In fact, they’ve tricked the masses into believing that the word should always be followed by the word “theory.” This is, of course, insanely stupid, but that’s just how it is (and the Sheeple are stupid). In fact, our own government uses the word conspiracy hundreds of times everyday in court proceedings, and without following it by the word theory. Have you ever heard a prosecutor in a murder trial say that a defendant is being charged with “conspiracy theory to commit murder?” I didn’t think so. Why is that? It is because criminal conspiracies are real.

    Mr. Barkun also claims that we need a central bank, and that ours, the Federal Reserve, are accountable to the people. Really? First of all, our country seemed to do pretty good without those crooks from 1776-1912, didn’t we? And as far as accountability goes, who is he kidding? The Federal Reserve has NEVER been AUDITED by an outside agency in their 100 years of existence. This is an indisputable fact! I’m beginning to wonder if Mr. Barkun even knows the definition of the words accountability and audit. Maybe they are always taken out of context (lol)?

    God, I love burning on so-called debunkers, especially with their own logic!

    And remember, there is no “theory” in criminal conspiracy!

    • anticultist says :

      “For more than a century ideological extremists at either end of the political spectrum have seized upon well-publicized incidents … to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure—one world, if you will. If that’s the charge, I stand guilty, and I am proud of it.” – David Rockefeller (Memoirs, 2002)

      It is clear that Rockefeller is stating that he has no problem with people characterising him as an internationalist who wants to build a more globally integrated political and economic structure. To be unable to discern this or to assert that this si somehow nefarious is nothing but bias. Rockefellers have a track record of doing philanthropic work, all conspiracy theorists want to do is ignore all that and tar them with NWO plans and world domination. Honestly this stuff gets really old. Exactly when do the Rockefellers plan on taking over the world and killing everybody ? They seem o be taking a mighty long time to do it.

      “The Federal Reserve has NEVER been AUDITED by an outside agency in their 100 years of existence”

      BULLSHIT

      http://www.publiceye.org/conspire/flaherty/flaherty6.html

      The above link states

      “Since its inception in 1913 the Federal Reserve System has been subjected to a variety of financial and performance audits by Congress, the executive branch, and private accounting firms, although responsibility for this task has shifted from time to time. From 1913 to 1921 the Board of Governors, then known as the Federal Reserve Board which sets monetary policy and regulates the activities of the Federal Reserve Banks, was audited annually by the U.S. Treasury Department. In 1921 Congress created the Government Accounting Office (GAO) and assigned it to audit the Board until 1933. In the Banking Act of 1933, Congress voted specifically to remove the Board from the GAO’s jurisdiction. From 1933 to 1952 audit teams from the twelve Federal Reserve Banks performed the annual examination of the BOG’s books. From 1952 to 1978, the Board, under authorization from Congress, decided to employ nationally recognize accounting firms to conduct the audits of itself to insure independent oversight. This provided an external evaluation of the adequacy and effectiveness of the examination procedures.1

      In 1978 Congress passed the Federal Banking Agency Audit Act (31 USCA §714). It placed the Federal Reserve System back under the auditing authority of the GAO. The Act significantly increased the access of the GAO to the Federal Reserve Banks, the Board, and the Federal Open Market Committee (the FOMC). Since then, the GAO has conducted over 100 financial audits and performance audits of the three Federal Reserve bodies.3”

  26. Alan says :

    “Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world’s largest banks may be fixing the prices of, well, just about everything.”

    http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425?utm_source=People+Waking+Up+to+Biggest+Price-Fixing+Scandal+Ever&utm_campaign=Eblast-+Price+Fixing+Scandal&utm_medium=email

  27. Cultural sceptic says :

    Ok I give up, I don’t understand anything but I’m pretty sure that bankers don’t work as hard as many poor people do and still have more money than them, it’s enough for me to know that there is something rigged, don’t know what don’t were but I’m still trying to find and share true and practical solution to live a better life and Thrives help me understand that I could do something useful, and this blog didn’t. Here I stand.

  28. Crowell says :

    You only have to have very minimal brain power to see right through this. It is as bad as the mermaid documentary on discovery

  29. Paul Clemmings says :

    I have not seen the film Thrive, but I worry that this article on “Thrive Debunked” misses the fundamental problem with modern economics. Or rather, this article serves as an apologia for the wholly unethical key issue which leads to most human problems.

    To make it simple: all money is printed at interest as debt. This money is created primarily when loans are made in a processes which was for a very long time, and still should be, illegal. But the fundamental issue is this: under such a system, global, aggregate debt must always rise, there is never enough money to pay this debt, and for every dollar of wealth or value, there is a corresponding person in debt. Under such a system, poverty and bondage must increase, and of course, also debt.

    This is not some “conspiracy theory”. This is simply what every post neo classical economist, from Karl Marx to Tim Jackson, has long known. You cannot “fix this” by simply banning banks, but figuring out a way to ban or rethink profit.

    – Paul Clemmings

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