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
it was a good article but i find it interesting that although Catherine replied to a few posts she did not answer the question of ” who were these small groups of players whose names came up again and again?”. Pete Brewton wrote a book connecting the S&L loan scandal of the 80s to the mob and the CIA (shortly thereafter he was no longer a reporter). He named names but it did not make for great reading. It was diligently researched reporting but so many names made it hard to keep track. It was centered on Texas so locals there might have made the connections. Anyway, are the names not mentioned because they would not mean anything to most of us readers – the purveyors of the ‘hot money’ running around the world that can switch location at the speed of light. The ‘hot money’ tha governments can’t control and the Central Banks barely kept from collapsing the whole system with the Mexican peso crisis, Russian, Asian, etc. – were probably just the flunkies – the names of the people behind the operators whose money it actually was. Even with only 1 % of the 6 billion plus humans of the world, there are just too many to name. We only notice the Kissingers or the Bremers or the Soros or the Madoffs, the corporations like Goldman Sachs…
I don’t have trouble believing the thesis. Hopsicker recently pointed out that Carlos Slim, maybe the 2nd richest man in the world who recently gave a large cash infusion to the NYT after taking decades to make 5 billion made 10s of billions over the last decade or is it believable that La Ki Shing becames the 2nd richest man in Asia by starting out with plastic flowers (I imagine that his net wealth increased logarythmicallly after he gained control of ports and shipping) or the owner of Chelsea soccer… The nexus of oil, arms, drugs is only the most vile extension of the ‘Octopus’.
What has happened is that ‘we’ are suppoerting layers and layers of macroparasites. Queen Elizabeth is still one of the richest women in the world. The Rockefellers and the Rothchilds, the Agnelli’s etc… I imagine ‘we’ will be supporting the heirs of Gates for centuries.
Like Hitler who did do what he was set up to do (Go east young man – ravish Russia – destroy Germany) before he slipped his leash, this present financial meltdown has evaded the control of ‘the powers that be’. It has happened so fast that even the big guys at Citibank, Merrill lynch, AIG, et… got caught holding.
Just like the coup d’tat of the Kennedy assassination, ‘they’ try these things out in foreign countries (Argentina for a financial example) before bringing them home to you and me.
What we really have to worry about is – the perfection of robots or androids. You see, the British Emmpire outlawed slavery in the early 1800s but ‘they’ still needed someone to do the dirtywork. That is why decendents of Indian indentured servants are the largest ethnic majority in Guyana (former British Guiana). Once a substitute is perfected, then ‘they’ will proceed with the rumored plan B – getting the population down to hundreds of millions. Just as after chernobyl, highups got the iodine supplements and not the children in Belarus, you know who will get the ‘good’ vaccine that works and who won’t.
John Merryman, that was very insightful. If you haven’t read about it, you may wish to read about The Venus Project (just google). There are people out there looking beyond the tired concepts of left vs right, capitalism vs socialism and instead viewing us as people and positive societal evolution as a goal.
Yolanda, you are raising interesting questions–mainly, if there is a small group of players, “What is their ultimate purpose in doing this?”
My guess is, this small group is seeking absolute world domination through consolidating all power and money into their own hands. It’s a little hard to fathom why they would want to do this–since this small group of people must surely already be unimaginably wealthy and powerful. Yet you get the impression from history that this is what the wealthy and powerful invariably do–that getting more, and ultimately gettting it all, is the whole impetus of their existence.
As for the little problem you mentioned–“Even if one has lots of money to purchase bodyguards, buy gas, or whatever else one needs to survive, ultimately a person living such a life is living in paranoia and in constant fear for one’s life and in fear of being robbed of one’s “stuff” and one’s money or being killed for one’s stuff or money. How can that be a life? How can isolating oneself in a gated community to self-segregate oneself from the hungry riff-raff be a life? What kind of living is that?”–this is how such people have always lived.
I suppose there must be great satisfaction in having food while others are hungry, heat while others are cold, palaces while others are homeless, and wearing haute couture while others are in rags. In fact, if you look around your own neighborhood, you will notice that there are plenty of people who feel that way–and whose appetite for more is insatiable.
Why? I think it’s because, as the Book of Job says, “Man that is born of woman is few of days and full of trouble. He ariseth as a flower and is cut down; he fleeth even as a shadow and continueth not.” At some level, some people believe that if you could just get an infinite supply of everything that sustains life, you could be secure–maybe even somehow overcome this basic human condition and cheat death. This kind of thinking doesn’t make sense, but you can see it at work everywhere.
Hello Catherine:
Great and interesting post. I always find your posts informative. I have some questions that perhaps you could answer.
OK, let’s assume that there is a small group of players that surface again and again in different parts of the world and that are sucking the money out of different countries’ economies. What is their ultimate purpose in doing this?
OK, so they end up with lots of money. So what, if there are no places where one can live due to a)global warming, b)environmental degradation, c)social instability and lack of the rule of law due to extremes between the rich and poor (e.g. Sao Paolo), d)Peak Oil, e)extreme civil unrest, revolts, and revolution due to volatile economic situations, lack of food, overpopulation, etc. Any one of the events I just mentioned would be difficult to live through. Imagine trying to navigate them all.
Do you think that these individuals are stockpiling as much money and precious metals as possible to be the survivors after the de-industrialization and de-capitalization (i.e. if the capitalist system collapses)of human civilization as we know it? Do you think these individuals have chosen a “Last Man Standing” strategy? Or are they just greedy and thinking in the short term about how much they can amass?
I’m puzzled or perhaps I’m just naive or I ask dumb questions. But, apart from lots of money what do these players engineering the financial coup d’tat gain? Even if one has lots of money to purchase bodyguards, buy gas, or whatever else one needs to survive, ultimately a person living such a life is living in paranoia and in constant fear for one’s life and in fear of being robbed of one’s “stuff” and one’s money or being killed for one’s stuff or money. How can that be a life? How can isolating oneself in a gated community to self-segregate oneself from the hungry riff-raff be a life? What kind of living is that? Or am I missin the point somewhere? What do your other readers think?
Marsha:
Thanks for the suggestion. I will check it out. I agree with you about knowledge. I used to have a pastor in Washington who would always say, “If we can face it, God can fix it.”
As we are facing the facts, much positive power is unleashed.
Catherine
Catherine, thank you. I recently read a book entitled COMPRADOR by David R. Cudlip, 1984. He was with Brown Brothers, Harriman & Co. and before that had served in Europe with U.S. Army Intelligence. The book describes a small group of people evolved from the Portuguese comprador system in Asia, now international, who control regions of the worlds economies. The U.S. economy had been bled nearly dry, Russia was unstable and China was rising, all rigged by the small group. The book blew my mind considering where we find ourselves today. Now your article really brings it into perspective. Hard to believe and yet very easy to believe. I’m glad I came across your website. If we are destroyed it is at least worth while knowing what hit us.
Life is a state of nature; it is the getting of it.