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
This is a first time visit for me and I’ll be coming back. However, regarding the subject of this post, I think that for anyone who has been paying attention to FrontLine over the last 8 years or for anyone that has read “Confessions of an Economic Hit Man” (John Perkins), this is old news, obviously not so for Ms. Fitts since she started seeing these things take shape since the mid-90’s.
I strongly recommend the “Confessions…” book as well as Marjorie Kelly’s book, “The Divine Right of Capital”. Although they can be a little depressing, it’s nice to know what you need to prepare for, modern Corporate Feudalism and whatever that will entail.
In response to..The truth:
And you are…?
I am hoping your reply is…”I am Muerte!” : )
I have just read this wholeblog and my thoughts have to be to ask you all, what do you think happens when you die? You have no more thoughts! That’s it! The end! So, what is the most important thing that you can do right now? Can you change any of these economic, greedy, ponerological schemes and make the world a better place? The answer is Yes! But you have to get up and go somewhere and hug someone. Yes, you have to show them that you mean what you say that you love them.
I have seen by these blogs that all of you are very learned and bright individuals, as I myself am not. I am just a simple man and I do good as much as feasible, I take nothing from no one without paying for it, and I spend most of my awakened time making other people smile. I don’t know how to solve the problems you all have mentioned. I don’t know what to do about any of it. As I stated, I am just a simple man. Tomorrow I may be dead, or living in a very dark world. However, I will not stop making people smile just because I have no food or electricity or a job.
My point is this: We haven’t, as people, evolved to a level of understanding why we are here on earth, nor have we understood the power of good and evil, nor have we seen the Light. But we will! Until then, hug your neighbor, smile, and walk on!
As John Merryman said, how do we know what is past and what is future? We may be looking at it as in a mirror…dimly! The Past may very well BE our Future! But as for “Bad” people, they’re here. As for “Good” people, where are they?
And last suggestion on links to read is:
http://jameshowardkunstler.typepad.com/clusterfuck_nation/
PEACE!
Anastacio:
I agree. I live in Hickory Valley, Tennessee. The bubble never quite got here, so we are very much still a barter culture.
There is an entire pyramid collapsing. You have been operating in a real world and real economy while many have been living in a dream world — a bubble society subsidized by government money. That means you know much that many people are going to need to learn – and quickly.
So, an opportunity to be of service if you can forgive them for being spoiled…
Catherine
I also want to thank very much CHRIS for his explanation on CDO, SVP, CDOs and all the things involved in this so called “valuable papers/documents-transactions”..devilish or desperate transacions? is the same..
Thanks again Chris
To Rob B. So basically what you are saying is that “all is pretty much fine” and we should reassume “B.A.U.” business as usual and think nothing and do nothing?. YAWN…!
If you are so bored with comments on this blog why bother?
The real thing is that of course, I think and agree, Banks, Politicians, “Illuminati”, whatever.., in themselves are not full-time-devils (few may well be I tell you..thinking they do good!) thinking to do harm all the time to humanity. The thing is that YOUR MIND CAN PLAY YOU AROUND and all we need to TRY to DO is to see through this MIND problems and get a better idea to next time not be so FOOLED by OUR OWN and OTHERS MIND GAMES…
Anyway, I dont think knowing “WHO” this people are will make things better and even think its irrelevant. SEE THROUGH and read BETWEEN LINES and you will find more THRUTH than the other way around.
Better try to find “WHY” & “WHAT”..than WHO; to solve problems..solving meaning getting better, actually “SOLVING” economic/political problems (I think) is impossible. We just get better systems. We LEARN and GO ON…but with a different frame of mind/spirit..thats HISTORY. And I am a optimistic in evolution, so far..
Thanks Bryan for those suggestions on link. Mines:
http://survivingpeakoil.com/
http://www.whiskeyandgunpowder.com/
PEACE
(I am from Ecuador so excuse my bad english)
Geez-O-Petes.
Someone’s getting by, receiving royalties around here.
So much material to choose and research (if I had the time) and so much intrigue of information and history (if I really cared), to learn from and be motivated by (if I were that professional or career motivated), and follow up on such campaign and try to convince others of my quest for the truth (if I was convinced things would change).
[Ha. “…the truth, and you are?” But at least one who has the right to free speech.]
Oh, but if it IS all so going to make such a difference, how many more generations will have to tolerate these kinds of actions from people with real power and influence over the masses? How long but enough for those to say their piece, feeling as they had contributed? And praise those for being more informed, enlightened and outspoken through their particular skills and experience, realistic and imagined as being so learned, prophetic and inspiring?
(Wouldn’t be interesting if those of the Taliban and other ‘terrorist’ groups thought as we do here, and applied themselves to realize such potential in the 21st Century of thought and experience. No? Because they are convinced of their own worlds of reality as we of what we have come to believe as a free and equitable societal structure. Snarf-snarf. “Trade you a pack of gummy bears for that AK-47?”… “O-kay, Western-Dog!”)
Would we vote for these people in an election? Promote them to heads of finance or state? Are they the future of corporate America, or be their watchdogs of a society? If they preferred this rather than real leaders of responsibility, commitment and service. To play it safe, in other words, and reap the consequences?
What are we getting through all of this in the meantime?
A place to be heard. To write an opinion. To be a part of something greater than ourselves. Maybe even, the gang mentality and family unit you cannot experience by what has been handed to you in life in general. (Opps, psychoanalytical slip!) Another soap box opportunity! Be it as it may, we’ve done exposed ourselves with these lines. Of our ignorance as well as our curiosity, and of our fears.
Oh man, talk about entertainment by the way!
(Anybody see the irony in all of this? Remember the history of Lloyd’s of London? Wasn’t that back in the 16th or 17th Century? Stock market stuff. Remember the ‘crash’ before WWI? Forget the gas crises of the 70’s? Oil company buy-ups? Bank mergers and changes these past 20 years? Retail failures since the 70’s? The ‘big refinancing’ of homes in the 90’s? Big oil profits? Change from the gold standard? Enron?!? American Motors, Studebaker, DeSoto, Packard and Hudson? We’ll still need diesel fules for semitrucking and trains.
I say… where are the new two-bedroom homes we need and the new car for under 8 grand? When we have the 4-day workweek and all our insurance butts are covered. Think? Taxes too? Uh, dream on patriot!)
Well, looky that… more research to do. Ahhhh!
God, I’m having too much fun around here. (Whew.)
Harry