An Interview with Catherine Austin Fitts by Jorge Nascimento Rodrigues, editor of Janelanaweb.com.
QUESTION: Which are the roots of the ongoing financial crisis? A group of Wall Street’ criminals, or a couple of legislation pieces and policies since Clinton’s repeal of the Act of 1933 and Greenspan’s so called financial revolution?
ANSWER: It is much deeper than this. Recommend for your readers to listen to the audio seminar that I recorded in 2005 to explain the deeper history. At the heart of the problem is the “red button” test. See the last chapter of my book. When surveyed out of 100 people, 99 said they would not push the red button. Our financial dependency on unsustainable economics is broad, ingrained and deep. There’s also a Wall Street old saying – the expression ‘never fight the tape’. It means never try to oppose the market – always go with the market’s trend and direction.
Q: Without all that financial “creativity”, the last 20 years would be of economic and consumption growth, financial and stock bubbles in the US and deeper globalization of financial capital?
A: The bubbles were developed to accommodate a number of goals. First, was to facilitate the shift of capital out of the US to reinvest in Asia and the emerging markets and to ensure global dominance for the corporations and investments facilitating the shift. While the US was bubbled, moving money out at a high dollar price, economies in Asia, Latin America and Eastern Europe experienced the withdrawal of credit, devastating their currency and market values, so that major assets could be picked up on a very economic basis. Second, was to help reengineer global governance out of households, communities and sovereign governments and centralize it into private corporations and banks. So the bubbles were at the heart of what I call “a financial coup d’état.” The coup d’état, however, is not just in America. It is world wide. The commitment of the American people to democratic process and individual property rights and freedom is a major obstacle to the coup. Hence, the financial confrontation underway is a dramatic one and important to the whole world.
Lesson 1: Consolidation using these “pump and dump” cycles is an inherent part of the economic warfare we are experiencing.
Q: With a default in American bank reserves of more than $150b and a growing run-out of international capital from the US, what can you expect for the rebuilding of US financial leadership?
A: My expectation is that the folks who pulled the capital out during the last decade will be able to buy back in cheap. This is the same process we saw at the end of the last housing bubble bust in the US in 1989-1993. Those who sold at the top of the “pump” were in position to buy in cheap on the “dump.” Consolidation using these “pump and dump” cycles is an inherent part of the economic warfare we are experiencing. Numerous factions appear to be competing for control. It is impossible to say who will emerge in command. Whatever happens, my hope is that the process creates a sufficient spiritual and cultural shift to support the creation of serious alternatives to the central banking-warfare model that has dominated our planet for 500 + years. Whoever is running things here or in Europe, these events could never have occurred without widespread greed within the general population.
Lesson 2: The bailout will address a short-term symptom at the cost of promoting a greater unraveling.
Q: Can the $700b package (plus the $110b for trickle down perks) restore confidence in the banking market, or the money will be “lost” in the corridors of consulting and managing companies, financial targeted “friends” in route to mega acquisitions and a new «bubble» in Wall Street?
A: The package should be sufficient to handle credit default swap settlements during October as well as liquidity squeeze in the major US institutions through the election. I doubt it will carry us must past the election or inauguration. Part of the challenge, is the process to achieve the bailout broadcast to depositors and investors that the system is fundamentally unsound. Hence, the bailout will address a short-term symptom at the cost of promoting a greater unraveling.
Lesson 3: The dollar’s value is determined politically, which is supported by military capacity and power projection.
Q: Is it possible for the US to combat the ongoing financial crisis as a lonely financial superpower?
A: Yes, if the US and UK in combination are prepared to use sufficient military and covert force.
Q: What you mean? Hard power or covert power projection, certainly will accelerate other strategic moves from China, Russia and even a few others, including provocateurs, and I am not sure that Europe (even UK) will follow…
A: The dollar’s value is determined politically, which is supported by military capacity. The new president will not have a mandate to support the dollar. The people who finance the government will decide and the question is what they want. If continuing a global taxation system through the dollar managed system is what they desire for political reasons, it can and will continue. See my post.
Q: So you mean that the countries and institutions all around the world that finance American crazy debt and deficit system are paying a kind of global tax to the superpower?
A: Global Treasuries and Sovereign Wealth Funds, central banks and a variety of large institutions buy Treasury securities or hold dollars not because there is true economic value behind them or because these financial assets are sound fiscally or in terms of credit. The US debt and deficit financing is no longer a debt system. It is a global taxation system.
Q: Even with all this recent financial carnage?
A: Hence, demand for US dollars and government and agency bonds continue even as value falls dramatically. The losses on these holdings represent a tax paid to the “Empire”.
Q: Don’t we need a multilateral approach, particularly with the Chinese and the European Union?
A: A multi-lateral approach is preferred, the question is it possible or are there too many direct conflicts over resource and resource pricing issues between the US and China and direct power conflicts between the US and Russia.
Lesson 4: In the long run, financial systems require reliable standards.
Q: How you evaluate the recent European financial decisions?
A: On one hand it makes sense to have a coordinated European response. On the other hand, national governments are required to intervene in support of the individual banks. Hence, what can a European wide response really do? Actually, over time it can lead to more information sharing and ensuring that the leaders support each other and feel not alone. The bigger issue is that the credit freeze results from an absence of trust. And that absence of trust is well deserved.
Q: Why?
A: We have had a steady deterioration in the integrity of law, accounting and banking practices. On one hand part of what we are watching is the full cost of corruption within the system. In the short run, government can guarantee everything. However, in the long run, financial systems require reliable standards. This is a little bit like sending up a space shuttle in which all the engineering decisions were made by political decisions and convenience. The thing will not fly. So we need consolidate and a cultural revolution. In part, we need the consumers and citizens to create market demand for it.
Read this interview on Janelanaweb.com:
An Interview with Catherine Austin Fitts by Jorge Nascimento Rodrigues, editor of The Silent Financial Coup d’état.
Mort Gage,
You know, I hear a lot of talk about “patriotism” these days, but personally, I refuse to pledge allegiance to a country that tells talented people that they can’t have a job or an education, that they have to continually “wait in line” because of quotas and set-asides. It took me 22 years just to earn a frigging BSIT because it was always the “poor little minorities” first, and the “wicked white male” last. No, this lousy country and its weirdo economics can go to hell.
Now, I’m one of those people who read Harry Browne in the 1970’s, and who applied most of his strategies. Yes, I’m a “nut” who owns not only gold, but also “junk silver” coins in case of an economy collapse, and a cash reserve in case of bank failure. I FULLY intend on dining out when the bank holidays come, and will wave at yuppies like you who can’t even buy dog food with your worthless plastic. And when the economy implodes, I will sell a roll of “junk silver” dimes in exchange for a Maple Leaf, gold coins which yuppies like you bought in your lemming rush to protect your portfolios. And when you and your family drive to the breadline in your “Beemer,” remember who you stepped on in the past, and whom will have the ultimate revenge.
Just remember that I have a long memory, a bad temper, and I’m looking for payback. You yuppies and your minorities will do nicely.
Catherine,
I continue to be blown away by the depth of your thinking and the scope of your knowledge.
There is something I still don’t get.
I’m getting more clear on the HOW of the pump and dump. And I get your ideas about where the money might be going.
But I’m not clear on this: WHY?
What is the money really being used FOR?
Once someone has a trillion dollars, in what meaningful sense does another trillion make a difference?
You’ve mention funding “black projects”. Ok, “black projects” to accomplish WHAT ends? Once they get the money, what are they doing with it, to achieve what?
I can’t believe it’s only going to acquire more stuff. So what are they doing with it?
Thanks for the genius and deep insight,
Paul Ross
Mort:
As counsel to RTC during the S&L crisis, my law firm designed and executed a multibillion-dollar auction program to sell non-performing mortgage loans owned by defunct savings & loans. I assure you, those institutions sold mortgages in all sorts of forms, including participations, whole mortgages, mortgages in foreclosure, mortgages subject to litigation and real estate owned (which is real estate obtained through foreclosure or deed in lieu of foreclosure). Here, there are pools of mortgage-backed securities, but if the government takes over a pool, or purchases a mortgage from the pool, it has as much control over the property as the RTC did in these sales. The twio deeper issues, which Mr. Paulson has not told people, are:
(1) Did the mortgage trusts obtain legal assignments of the mortgages and do they have original copies of all the documents that they need in order to demonstrate title to the mortgages they purport to own?
(2) Are all of the mortgages secured by real property, and property that does not also secure one or more additional mortgages?
I have done work with Volunteer Lawyers for the Poor in defending foreclosure cases. From this work, I know that there have been a number of instances where the foreclosing lender cannot present clear title to the mortgages (and this is what the case you cited is about). More and more judges are refusing to go forward with foreclosures in the absence of this documentation. It used to be that lenders could actually get executed assignments AFTER filing foreclosure actions. I heard of one case where the lawyer for the foreclosing lender actually signed the assignment as an “officer” of MERS. MERS is a centralized book-entry system for recording/keeping mortgage assignments. Many debtor lawyers suspect that it’s fraught with problems. See some of what Ellen Brown has written on that subject.
THe second issue, whether there really is property securing all the loans, is perhaps even more troublesome. I read on the internet that someone familiar with the FBI investigation of Bear Stearns found instances where a single property secured multiple loans in different Bear Stearns pools. Catherine Austin Fitts has stated publicly that she believes collateral fraud is rampant in the government mortgage pools (Ginnie Mae & FHA), and there’s no reason to think this problem would exist only in the government pools. As Catherine has noted, the bail-out legislation, in authorizing purchase of a broad category of toxic assets, is a great way to hide the evidence of fraud in these pools. If the government were to guarantee the mortgages themselves (a better plan), then in order to claim on the guarantee, the holder of the mortgage could be forced to show that there really was property securing the mortgage.
The Constitution is the only instrument we have left. Keep it simple.”All money bills must originate in the House of Represenatives.” Act accordingly! Remember the 2nd amendment was put in place for this very purpose.Orderly,resolute while the Fitts’ present the rationale we stand ready
to act in our defense.To this we pledge our lives, our property and our sacred honor.
Simper fi
I can’t believe this transpired right under our noses. It’s not surprising when our society is more concerned over “reality” shows and celebrity drivel.
On reading one article today, it seems that we are deeply entrenched as these folks will rely on gov’t to get them out now and gov’t still to back them when healthy again. This is no win, i.e. set up for the next bubble, easy for them to pump and dump again… Check this on iceland from http://news.bbc.co.uk/1/hi/business/7658908.stm. [my comments between brackets]:
“In a crisis, such as the one we are experiencing now, the strength of a bank’s balance sheet is of little consequence.
What matters is the explicit or implicit guarantee provided by the state to the banks to back up their assets and provide liquidity. [what????!!! good mgt doesn’t matter – guarantee does!]
Therefore, the size of the state relative to the size of the banks becomes the crucial factor.
The relative size of the Icelandic banking system means that the government is in no position to guarantee the banks, unlike in other European countries.
This effect was further escalated and the collapse brought forward by the failure of the Central Bank to extend its foreign currency reserves, even if it was under considerable pressure to do exactly that.”
[gives total meaning to moral hazard for the pump/dump crowd. shoot, it’s not even morality they deal in. just money.]
Post-Script to previous post:
Despite the “inescapable, yet a counter-intuitive necessity” for the upcoming government intervention into capital markets, concerning language included is below – a section from the original “U.S. Treasury Proposal to Buy Mortgage-Related Assets”:
“Sec. 8. Review. Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
PLEASE READ THE ABOVE LANGUAGE VERY CAREFULLY…
Why is there no provision for judicial review? What are the effects of such authority? Moreover, the language seems to read as a circumstance as to be unconstitutional.
The quoted text is cited from download of Sept. 20 (Bloomberg) — proposal by the U.S. Treasury to buy mortgage- related assets from financial institutions.
Please recall, – Related “assets” is not “mortgage backed” or “titled”.
Mort(imer) Gage