In light of recent events, I am republishing.]
By Catherine Austin Fitts
In the fall of 2001 I attended a private investment conference in London to give a paper, The Myth of the Rule of Law or How the Money Works: The Destruction of Hamilton Securities Group.
The presentation documented my experience with a Washington-Wall Street partnership that had:
- Engineered a fraudulent housing and debt bubble;
- Illegally shifted vast amounts of capital out of the U.S.;
- Used “privitization” as a form of piracy – a pretext to move government assets to private investors at below-market prices and then shift private liabilities back to government at no cost to the private liability holder.
Other presenters at the conference included distinguished reporters covering privatization in Eastern Europe and Russia. As the portraits of British ancestors stared down upon us, we listened to story after story of global privatization throughout the 1990s in the Americas, Europe, and Asia.
Slowly, as the pieces fit together, we shared a horrifying epiphany: the banks, corporations and investors acting in each global region were the exact same players. They were a relatively small group that reappeared again and again in Russia, Eastern Europe, and Asia accompanied by the same well-known accounting firms and law firms.
Clearly, there was a global financial coup d’etat underway.
The magnitude of what was happening was overwhelming. In the 1990’s, millions of people in Russia had woken up to find their bank accounts and pension funds simply gone – eradicated by a falling currency or stolen by mobsters who laundered money back into big New York Fed member banks for reinvestment to fuel the debt bubble.
Reports of politicians, government officials, academics, and intelligence agencies facilitating the racketeering and theft were compelling. One lawyer in Russia, living without electricity and growing food to prevent starvation, was quoted as saying, “We are being de-modernized.”
Several years earlier, I listened to three peasant women describe the War on Drugs in their respective countries: Colombia, Peru, and Bolivia. I asked them, “After they sweep you into camps, who gets your land and at what price?” My question opened a magic door. They poured out how the real economics worked on the War on Drugs, including the stealing of land and government contracts to build housing for the people who are displaced.
At one point, suspicious of my understanding of how this game worked, one of the women said, “You say you have never been to our countries, yet you understand exactly how the money works. How is this so?” I replied that I had served as Assistant Secretary of Housing at the US Department of Housing and Urban Development (HUD) in the United States where I oversaw billions of government investment in US communities. Apparently, it worked the same way in their countries as it worked in mine.
I later found out that the government contractor leading the War on Drugs strategy for U.S. aid to Peru, Colombia and Bolivia was the same contractor in charge of knowledge management for HUD enforcement. This Washington-Wall Street game was a global game. The peasant women of Latin America were up against the same financial pirates and business model as the people in South Central Los Angeles, West Philadelphia, Baltimore and the South Bronx.
Later, courageous reporting by several independent investigative reporters confirmed in detail that the privatization and economic warfare model I discussed in London had deep roots in Latin America.
We were experiencing a global “heist”: capital was being sucked out of country after country. The presentation I gave in London revealed a piece of the puzzle that was difficult for the audience to fathom. This was not simply happening in the emerging markets. It was happening in America, too.
I described a meeting that had occurred in April 1997, more than four years before that day in London. I had given a presentation to a distinguished group of U.S. pension fund leaders on the extraordinary opportunity to re-engineer the U.S. federal budget. I presented our estimate that the prior year’s federal investment in the Philadelphia, Pennsylvania area had a negative return on investment.
We presented that it was possible to finance places with private equity and re-engineer the government investment to a positive return and, as a result, generate significant capital gains. Hence, it was possible to use U.S. pension funds to significantly increase retirees’ retirement security by successfully investing in American communities, small business and farms — all in a manner that would reduce debt, improve skills, and create jobs.
The response from the pension fund investors to this analysis was quite positive until the President of the CalPERS pension fund — the largest in the country — said, “You don’t understand. It’s too late. They have given up on the country. They are moving all the money out in the fall [of 1997]. They are moving it to Asia.”
Sure enough, that fall, significant amounts of moneys started leaving the US, including illegally. Over $4 trillion went missing from the US government. No one seemed to notice. Misled into thinking we were in a boom economy by a fraudulent debt bubble engineered with force and intention from the highest levels of the financial system, Americans were engaging in an orgy of consumption that was liquidating the real financial equity we needed urgently to reposition ourselves for the times ahead.
The mood that afternoon in London was quite sober. The question hung in the air, unspoken: once the bubble was over, was the time coming when we, too, would be “de-modernized?”
In 2009 — more than seven years later — this is a question that many of us are asking ourselves.
Part II: Rethinking Diversification
Related Reading:
Dillon, Read & Co. Inc. and the Aristocracy of Stock Profits
Dr Clifford,
Thank you! I have been preaching the same thing for months…and you coined the right phrase!
“I tell my friends in Mexico, that the reason we don’t have corruption in the USA is that we legalized it. ”
I have been saying, “… in Mexico, they steal from you using guns and kidnapping….int he US they steal from you with the book in their hands!!”
Mandrake
I see a lot of intellectual chickens running around with their heads cut off around here.
Not only of ‘showing me the money’ and where its all gone, but should I be preparing for a revolution of some kind, or moving to a warmer climate and to a less expensive neighborhood during my retirement years?
At least on a smaller scale, personal in suruvival, I can have power and resources enough to be self sustaining.
There are so many who write their critical views, while offering up reference material (on and on) to back up these hidden truths and real example of reality checks. Knowing, knowledgable or theory, it continues to be expressed but still leaving the reader and researcher to dig further and become stressfully challenged.
Ain’t history great!
And how it so repeats itself, and yet, never changes as the behaviorisms and fears of mice and men. Even honest men so become tempted and corrupt as they once thought they’d never become, only to give in through the concept of either family, being acceptance or egotistical goals.
When is enough, enough?
We bring upon ourselves our own suffering and contemplations. Don’t we.
We are what we eat, desire and seek for in trying to obtain some levels of understanding what it really means to be at peace and content with oneself and of our worlds. Inside and outwardly.
It begins there, doesn’t it?
What more does a man do after he’s won the gold medal? He teaches and becomes a mentor.
The sky is falling. But not on my island.
But, I am no rock. And a rock never cries.
Thanks, that was a very interesting read. The history behind the facts…
Speaking of returning to constitutional money (i.e. gold/silver), it would help to read the following article “Brief US Monetary History” http://www.monetary.org/briefusmonetaryhistory.htm
When the US Constitution was drafted, there was confusion on what is the nature of money. It is ironic that our Founding Fathers fought against England for one simple reason – the colonies wanted to control their own money rather rely on debt-based Bank of England money system, but by the time they drafted the US Constitution, they forgot the real reason they fought against England. It took Thomas Jefferson 20 years after US Constitution was adopted to finally understand what we should be using as money. Hint: it ain’t gold and silver. One could read the article “Fools’ Gold” by Robert Carroll for more understanding.
This confusion of what is the nature of money is still with us today. Because of this the crooks at the highest government levels take advantage of this ignorance and confusion of money to manipulate markets to their advantage, much to our detriment, as evidenced by the current financial mess (or, as Catherine aptly put it, “Financial Coup d’Etat”) today.
Chris, you’re right – truth is stranger than fiction. That’s why I enjoy news and blogs better than movies or TV. Nice to meet another Ron Paul guy, too. Congratulations, you’re doing the right things!
Whoops – I might have sounded too critical in the above post. All I wanted to do was provide us with a comeback if anybody accuses us of being conspiracy nuts. Like a couple years ago I warned my family about coming economic problems and they rolled their eyes. (Too bad – if they listened they might still have a pile of money that is no longer there.) If I had added that the problems were caused by conspiracy A and group B, they would have laughed out loud. So my comeback would be, “It doesn’t matter if you think there’s a conspiracy or not. The results are the same as if there IS a conspiracy.” Which there probably is, as American points out. I just don’t get too bogged down in the details.
And Catherine, no criticisms to you. Love your articles, including the latest. SOMEBODY needs to point out what is really happening and you’re doing a super job – keep it up! Thanks!
I have to laugh when I see anyone state “there is no conspiracy”, LOL, conspiracies are a dime a dozen and have gone back into the furthest reaches of time. The main one played over and over is simply a form of “social Darwinism” which means often the meanest and nastiest and deadliest often end up near the top of the power structure dictating to all of those not willing to sell their soul to satan how to live. And of course extorting a never ending untold price in blood and treasure to help finance it all.
For Yolanda and Ellen who brought up the topic of why all this by The Elitists and mentioned Aaron Russo and Rockefeller I post his fine summary and a link to some of his last words. I am comfortable those who want to look deeply into the Belly of the Beast will come away with just a little more light.
“I used to say to him what’s the point of all this,” states Russo, “you have all the money in the world you need, you have all the power you need, what’s the point, what’s the end goal?” to which Rockefeller replied (paraphrasing), “The end goal is to get everybody chipped, to control the whole society, to have the bankers and the elite people control the world.”
http://www.jonesreport.com/articles/290107_rockefeller_microchipped.html
Gary, no need for conspiracies, “Truth is stranger than fiction”! I would also point out that whether the economic collapse is conspiratorial or not, we can certainly point to failed government policy in step with wallstreet banks/financial service firms. In 2004 my wife and I moved our family across the state to a new job and away from our parents. It was truly the first time I can point to when I began to think for myself, I was 33 years old. What I too used to term conspiracy theory began with asking my wife one day…do you think Magic Johnson really has HIV and Pamela Anderson Hepatitus C?, or are they walking government sponsored public service announcements? Then I moved into the political spectrum with the IRAQ (undeclared) war, and began to study currency stability, GAO, Irwin Schiff’s tax protest, and in 2007 as a Ron Paul Supporter I was introduced to Peter Schiff and his book Crashproof which lead me to convert the remainder of my savings to precious metals (I began this in 2004). My wife now appreciates the food pantry we have accumulated and continue adding to. Call me crazy if you will, if the worst case scenario occurs we will fair well, if it does not, nothing lost and my wife sleeps well. Catherine has certainly opened my eyes to the possibilities and direction of a more sustainable lifesyle that will benefit all who participate.