Mind boggling stuff - part II transcript.
Puplava interview of Catherine Austin Fitts on Mortgage & Financial Market Manipulation
Since the implications are very significant IMO for investments in precious metals, thought I'd post part II of the Austin Fitts transcript on this board first:
Please see part I at the following link:
Message 20155677
... and the entire audio interview at the link below:
netcastdaily.com
CA: I know, it’s kind of overwhelming. Let’s make it simple. Because 5 years ago I decided that I was going to start traveling around the country by car to see what was really happening on the ground. Because I think you can always understand an economy by simply walking around and, you know, when I was on Wall Street I used to do due diligence by going to the company and just going up and down in the elevator and talking to the secretaries. Let’s talk about what things look like on the ground in America, and what that means to the credit of a Freddie Mac or a Fannie Mae.
In the mid-90’s Jim, we knew that a huge amount of jobs and income-generating activities in America were going to get outsourced to Asia. I mean, those decisions were made in the early 90’s, and we knew that was going to happen. And I was a leader in Washington promoting a model whereby Americans paid down their debt, refinanced their communities and themselves on an equity basis, and redeveloped their skills. I mean, we knew the workforce was going to have to reengineer itself, and our pension funds and retirement arrangements were not going to be financially credible unless the workforce reinvented itself, and paid down its debt, you know, then. …
So we knew then we had a problem. And what happened is was my team was kicked out of Washington, and a decision was made instead of reengineering folks’ skills, or migrating them to equity and starting new businesses, a decision was made to float the economy of the biggest wave of debt that I can imagine. And what we’ve done is we’ve seen consumer debt skyrocket.
I have a member of my group, the Solari Action Network, who reconfigures the DEA’s statistics once a quarter, and what his calculations show is very much what I see on the ground in communities throughout America Jim, which is the average American household has income of $32,000 per year, they have expenses of $37,000 per year, and they finance that $5,000 per year deficit with liquidating assets, working harder, or borrowing more. And of course as you know, and it’s clear from your website, that the debt has gone … not just the consumer debt has gone up-up-up, but the mortgage debt has gone up-up-up. And now, that load is just increasing every year, and meantime we are accelerating moving all the jobs and income abroad.
Now, when you move all your income abroad, and you leave your growing debt at home, it doesn’t take long to understand what’s going to happen to a Fannie Mae or Freddie Mac or a Ginnie Mae. At some point the growing debt has got to get serviced, and the question is how?
You can flood the country with immigrants who can buy up real estate that you finance at the bottom, but at some point something’s got to give in the middle. I mean, if you shrink and collapse the middle class, they’re going to default on their mortgages.
JP: You would think Catherine though, given the size of this Credit bubble that we’re creating - not only in mortgages, in the bond market, the proliferation of hedge funds that literally move large amounts of money in and out of the market – people would be paying more attention to debt. But I hear stories, you get these people on Wall Street that say we have no inflation, and the other side of that story is as long as the Fed raises interest rates at a measured pace, the stock market will continue to go up and consumers will continue to spend money. None of that makes sense to me.
CA: (Laughter). It makes no sense, unless you, let me give you an example. Last year we appropriated $87 billion for Iraq, but the administration has repeatedly says it can’t explain where half of that money is going. It was interesting, one of the top reporters who followed the $3.3 trillion of missing money, I asked him the other day, I said, “Where do you think the $87 billion went to?” And they said, “Well, we think it went to finance the states’ deficits, because they were screaming about the states’ deficits, and then all of a sudden it stopped.”
We’ve had a complete implosion of internal financial controls in the governmental apparatus. $3.3 trillion missing from government is a financial coup-d’etat. You can keep a bubble going as long as you can finance it. And my guess is, again very much credited to Bill Murphy, what we’re watching is a securities operation both with the Federal agencies, the mortgage agencies, and the U.S. Treasury, which are financing a political economy. The money that comes in from those debt operations are being used for their lawful purposes.
Here’s the question: If we’re manipulating the gold market, who’s financing that? Who’s financing the money that it costs to manipulate the gold market? Well, if $2.3 trillion is missing in a year, that’s plenty enough to manipulate the gold market and a lot of other markets.
JP: You know, you would think though Catherine, and this is why I just wonder if we’re coming up against some headwinds here, because certainly even though you can manipulate markets, you can bring interest rates down, you can keep asset prices inflated, but let’s bring this down to Main street. You’ve driven around looking at these communities. If people are losing their jobs, if the jobs are going overseas, if they’re downsized where they’re not making the same kind of income they used to make let’s say 5, 10, 15 years ago, they’re adding more debt, even though that debt is at a lower interest rate, there comes a point where you can’t get any more debt, nobody wants to give you another credit card, or the bank simply will not give you another home equity loan. I mean at some point you run up against a wall.
CA: Right, and that’s where we are. I’m in Washington DC today, but I live in Hickory Valley Tennessee. In western Tennessee, in many of the communities, we’re in a state of depression. I mean, the middle class is essentially being wiped out. And, you’re absolutely right, without that fundamental productivity in the economy, there can be no economic gains. Now you can get some economic gains by moving in lots of immigrants. I mean, my impression Jim is that the borders are open, and America is experiencing very rapid immigration, and that’s part of what’s keeping the economy propped up. You can also keep activity going as long as you can finance the U.S. economy by borrowing more money, and printing more dollars, and pushing more dollars out. But we’ve reached a point where immigration and warfare are two economic activities after a bubble, but what we’ve been watching for years in this country is very significant falling productivity …
JP: Explain the productivity miracle that Greenspan trumpets every time he’s on top of Capitol Hill.
CA: We’re running the economy to centralize wealth. We’re using what I call a negative return on investment Governmental apparatus, both the budget and the credit and regulation, to centralize bank deposits, centralize purchases, centralize investments. We’re centralizing political and economic power. And in the process of that, we’re doing not what I call privatization – privatization is when you transfer government assets to private investors at market price. Piratization is when you transfer government assets to private investors at significantly below market prices. So we’re going through the process of using the Governmental apparatus to centralize economic power and wealth in a way that shrinks the total pie. And Greenspan’s job is to put a pretty face on that. And the mortgage bubble’s job, and the U.S. Treasury securities fraud, is to finance that.
So it’s good for Greenspan, it’s good for the people he works for, it’s terrible for the economy, and it’s certainly terrible for people like you and me. And an honest finance guy is at a huge disadvantage in this environment
JP: It almost seems like we’re turning the population in the U.S. into economic serfs, because you know, you take a two income family today, between what it costs to buy a house, own two cars and make payments, and send your kids to school, there’s nothing left over.
CA: Well think about it this way. Another way to look at it is, say the average taxes per resident is about $5,000. And 85% of that, or say $4,700, is going to agencies who refuse to produce audited financial statements or reliable financial systems. And if you study the black budget, increasingly what you’re seeing is that money is going to support private corporations and private banks who are using those resources to basically steal community assets out from under them. So you’re basically financing an operation which is stealing all your political powers and economic wealth. It’s a dream.
JP: Yeah, what this is is a giant wealth transfer. And I remember, was is it Hayek’s book “The Road to Serfdom” …
CA: (… Catherine proceeds to expand on her alternative “open source” model of community equity financing … i.e. “securitizing” small business income … quoting Catherine, “I mean, why do we need a big corporation to come in and privatize our water? Why don’t we just privatize our water, create a liquid security, and get the capital gains for ourselves?” … and again, “There are tremendous opportunities to reengineer this. Because whenever you have an economy that is this unproductive and this negative, if and where you can turn it around, the capital gains opportunities are absolutely enormous.”)
JP: … So, maybe this is a grassroots movement that begins at this kind of level Catherine, because certainly large corporations today are outsourcing our jobs. And it’s really the small businessman whose local that is the creator of jobs.
CA: Absolutely. But right now, you know if you come to Rotary International Involver, right now the local small business guys are playing with multiples of 1-5x, and they’re getting clocked by the large corporations, because they can finance at multiples of 20 and 30x …
JP: What has been the reception to this so far?
CA: Well, so far the reception has been tremendous, except from the Department of Justice and the Black Budget guys (laughter). We were prototyping 100 of these in 1998 Jim, and part of it was we had a software tool called Community Wizard, where you could dial in, say if you lived in San Diego, you could dial into Community Wizard and start to download all the data about how the money worked in San Diego. And what we didn’t realize at the time, because we were just naïve, was that that was illuminating a lot of the black budget fraud that was in the Federal mortgage portfolios. And, for example, when I was Assistant Secretary, I’d get these inventories that said we had 10 buildings on this block and I’d go fly there and I’d go drive by the block, and there’d be no 10 buildings there.
So the problem was when Community Wizard would illuminate you know the databases on what the Federal Government was doing in the mortgage business, and citizens in their community could get those numbers and police them, and see the money contiguous to the world where they walked around and drove around, and the lies came to the fore. …And now wherever I go, I get tremendous and positive response …
… You know, I’m a great believer that centralization is really nowhere near as productive as decentralization.
… more to follow (this ends at approx 38 minutes into the 52 minute interview …) |
