Catherine isn't impressed

Catherine Austin Fitts:

Money R’ Us: We Break It, We Fix It

Catherine and News & Commentary, January 15, 2009 at 1:01 pm

Larry Summers, engineer of the housing bubble and gold price suppression, is returning to power on Monday. Ditto, the folks who lost $3.3 trillion at the Pentagon.

Now Paul Volcker, the leader of the new Administration’s economic recovery team, is popping out a plan to redo our financial system. Turns out the “solution” to what ails us is to give vastly increased powers to the very parties who perpetuated the problems. As Bill King says, “You just could not make this stuff up.”

Volcker Presents Plan to Alter Global Financial System
Washington Post (15 Jan 2009)

Volcker’s Recommendations to Improve the Global Financial System
Group of Thirty: Financial Reform

Paul Volcker’s Wikipedia Bio
wikipedia.org

Paul Volcker’s Resume
Financial Economics Today

Elaine and Catherine and why war is big money

I collect all these odd articles from around the net, and certain folk have become favorites sources of mine, although they normally inhabit separate little corners of the internet. It is therefore nice when one of them mentions another of them.

Elaine Meinel Supkis:

Catherine Austin Fitts doesn’t concentrate on foreign news to the degree that I do this but her coverage of the US perspective of this Great Unwinding is full of rich details and tying together important matters and this article is a typical example: the mess in the Pentagon is very much one of the root causes of not only our economic collapse but the collapse of our imperial powers. Obama just made the #2 man in the Pentagon, a lobbyist who pushed for more and more spending. This is a clear sign that the Pentagon Milch Cow will continue to eat up most of our tax dollars and give us red blood and red ink aplenty.

I keep pointing out that the ‘mistakes’ and ‘glitches’ in systems are deliberately encouraged, widened and exploited. When people find holes in the walls leading to the Cave of Wealth and Death, they get out pick axes and open them wider. In the case of the Pentagon, the concept of a Cave where there is vast wealth but also death, is obvious! For, the only way to make real big money is to start bigger wars! And if there is infinite money, there will be infinite wars.

A great example is WWI: all the major empires fighting that stalemate war had an outside source of funding. The brand new Federal Reserve is a private bank. European bankers helped engineer its creation. Working with the US branches of European banks, they were able to funnel epic amounts of money.

As millions of European soldiers died hideous deaths in massive trench warfare, the money paying for that butchery flowed like a gushing river, from America. No one wanted to surrender or negotiate because no one had to raise taxes to keep fighting. They all merrily collected IOUs to American banks. This caused the Great Depression when none of them could even pay back the interest owed on these loans.

The Pentagon has figured out how to suck down infinite sums without infinite soldiers dying. By killing mostly civilians in small wars across the globe, the money lending to the Pentagon can flow effortlessly without citizens even noticing this since none of this appears to be paid for via tax collections. I wish to thank Catherine, by the way, for detailing the process by which these accounting methods used by our government, work. We can easily fix this and it is impossible to fix this since this is how so many people who bribe Congress and the President get their wealth! Just like the noxious cycle of voting for billions of dollars for Israel feeds corruption as Israel uses some of this money to funnel it back to Congress again.

Catherine Austin Fitts puts Madoff in Perspective

Putting Madoff in Perspective

Catherine, Daily Musings and News & Commentary,

December 31, 2008 at 10:12 am

These days I am wondering if Madoff’s biggest problem is that he stole from the rich. Feels to me like when you steal from ordinary people, particularly when it makes the rich much richer, it is called “policy” rather than “ponzi.”

For example, let’s review actions of the NY Fed and its member banks, such as JPMorgan Chase, Goldman Sachs and Citibank. The NY Fed serves as the depository for the US government. The US government has refused to comply with the laws regarding financial management and is missing over $4 trillion (or $14,000 per American.) Whatever money is missing would have to leave through the accounts managed by the government’s depository.

These member banks are also at the heart of the gold suppression scheme documented by GATA.org . They are leaders in the derivatives and mortgage markets and - I believe — related collateral fraud. They were present in the pump and dump of the Internet stocks, the telecom stocks and/or the Enron fraud.

Clearly, they have not prevented the problems with naked short selling or stopped the $1 trillion annual money laundering in the US financial system. And, yet, the media would have us believe that Bernard Madoff is the scandal du jour because he produced above market returns for wealthy clients until it turned out that $50 billion was gone. We are told that rich people lost money. We don’t know who got it. After all it could have been richer people who have exhausted opportunities to steal from ordinary people.

We are told that the moral of the story is that we need more regulation. Which means we give more power to the private and public institutions that are operated, staffed and financed by these bankers and which used existing enforcement to create rather than prevent these problems. Does that sound like a good idea to you?

I say the moral of the story is that we need to find out where the $4 trillion and the $50 billion is and get it back. Crime that pays is crime that stays.

Wikileaks.org

While perusing Catherine Austin Fitts's blog I found this statement:

"Watch for a continued failure of traditional media in 2009 … and a continuing loss of market share due to public disgust at such censorship. Go, Wikileaks!"

I think I've heard of Wikileaks, and maybe even checked it out once. But just now I browsed through it's extensive list of documents, and was amazed. I picked one almost at random,

"The end of the Affair? The BND, CIA and Kosovo's Deep State."

What a story! More about Kosovo, drugs, organized crime, and intelligence services than than you really wanted to know.

The Carbon Racket

Sanders Research Associates: via Catherine Austin Fitts:

By Carlton Meyer Nov/11/2008

The United States is the major opponent to a global carbon “emissions” trading scheme. Most people blame this on ignorance in the Bush administration and expect President-elect Obama to endorse the “cap-and-trade” scheme of the 1998 Kyoto Accords. This would be a mistake. Cap-and-trade schemes push polluters and their jobs to poorer nations, while enriching bankers with trading commissions and rewarding established polluters with valuable credits.The reason carbon trading is popular is because existing polluters are exempted by providing them with free emissions credits. In many cases, they are provided with extra credits to allow future growth. Amazingly, they can sell these free credits for a hefty profit. Meanwhile, carbon trading provides the financial community with a new line of business where they earn commissions, while the cost of carbon trading falls upon consumers as prices rise.

This is why it was easy to convince most major industrialized nations to agree to a global cap-and-trade scheme. Australia was opposed, yet its new government has promised to sign on. President-elect Obama prefers a 100% auction scheme so that existing polluters must buy credits, yet this idea of fairness is probably politically unacceptable in Congress.[1] Meanwhile, polluters whose nation did not sign at Kyoto have a competitive advantage. Carbon caps are exploited to reduce labor costs. Germany is one of the only large nations that reduced their greenhouse emissions to meet Kyoto targets. However, most of the reduction was possible because polluting factories moved to poorer nations. Nations that agreed to carbon trading now find domestic factories and their jobs moving aboard, where they can pollute for free and use cheap, coal-powered electricity.

For example, European cement makers may move to countries like Morocco. Dutch manufacturers with the world’s cleanest and most efficient industrial equipment cannot compete with those in Asia that use older and dirtier techniques because emissions restrictions caused their electricity rates to soar.[2] This is another reason why carbon trading is popular with corporations. It gives them an excuse to move manufacturing abroad where labor and electricity is much cheaper.

Carbon Taxation

Those aware of the carbon racket advocate a carbon tax so that money flows to governments, rather than indirectly to established polluters and “carbon traders.” It results in a faster reduction in greenhouse emissions because today’s biggest polluters would pay the most, thus encouraging them to adopt new technology. A carbon tax favors new companies that introduce environmentally friendly equipment. For example, the newer Boeing 777 passenger jet is around 50% more efficient that the older 747 because its airframe incorporates more lightweight composite materials and the 777 uses two bigger engines, rather than four in the 747. With carbon trading, a new company that plans to use 777s must pay for carbon credits to introduce a more environmentally friendly aircraft into the market, while users of the 747 continue to fly with gifted credits. Likewise, a builder of a clean coal plant must buy carbon credits to compete with an old dirty coal plant that paid nothing.

This is why major corporations support carbon trading. It requires them to pay nothing and rewards them with billions of dollars in carbon credits that future competitors must buy from them in the market. In contrast, a carbon tax treats all polluters equally, thus favoring the cleanest. In addition, carbon trading provides no incentive for governments to closely monitor emissions, which results in cheating. In contrast, a carbon tax ensures keen government interest in monitoring emissions to pursue tax cheaters. A final advantage of a carbon tax is that it can be levied on imports from nations that are heavy polluters,

Ban or Tax Coal Exports

Carbon trading is a racket. A carbon tax is better, but difficult to administer because pollution is a worldwide problem. A practical solution in some nations is to gradually ban or heavily tax coal exports, especially to nations that use old coal powered plants without scrubbers. Australia is the world’s top coal exporter generating $17.5 billion in 2007. The USA produces its own coal domestically, and exports around 6% of total production. Demand has increased rapidly and worldwide prices have recently tripled. Coal companies have not invested enough in capacity expansion, so prices will rise further.[3]

The simple solution for Australia and the USA to restrain energy prices and reduce worldwide greenhouse emissions is to heavily tax or gradually ban the export of coal. Why should Australians and Americans pay outrageous prices for coal generated electricity in order to supply China with all the coal it desires? Even dictators in oil exporting nations do not expect their citizens to pay the market price for oil, so why should Americans and Australians pay the world market price for coal?

The U.S. Department of Energy reports that hundreds of new coal plants will be built in the USA over the coming decade because it is the cheapest option to meet growing demand. During his campaign, President-elect Obama expressed conflicting views on coal, preferring “clean” coal if practical.[4] The price advantage has weakened as prices soared due to exports. Those concerned about pollution and climate change are blocking the construction of some coal plants in the USA. Why should Americans pay high prices for imported energy, while cheap coal is exported and burned abroad? Moreover, much of the exported coal is burned in old power plants that produce far more emissions than new, modern power plants in the USA.

While some call the USA the “Saudi Arabia of coal,” they overlook the challenges of increasing domestic coal production. Data showing the USA has more than a hundred years of coal reserves always use “at current rates of consumption.” Future rates of coal consumption will be much higher due to population growth and depleting reserves of natural gas and oil. In addition, coal-to-liquid refineries are under construction to produce expensive synthetic petroleum that will deplete coal reserves as well. Finally, new “clean coal” technologies require substantial energy to operate, so more coal must be burned to clean it.

The USA was the world’s leading exporter of oil a few decades ago. It is now the world’s leading importer. American and Australian coal companies are booking record profits, although an export ban should cap price increases. The only opposition to this sensible idea comes from free trade advocates, who view such action as a sin. Yes, banning the export of coal would result in lower electricity prices, preserve this non-renewable resource for future generations, and reduce worldwide pollution, but it is a free trade sin.

The Cap and Trade Illusion

Cap-and-trade emissions schemes are an ineffective method of reducing pollution. Taxes are better since they produce revenue that can be directed toward energy research. However, pollution is a worldwide problem that must be addressed with international agreements and import/export taxes efforts. These complex issues are evaded when victory is declared by implementing carbon trading schemes that push polluters and their jobs to poorer nations, while enriching bankers with trading commissions and established polluters with valuable credits.

_________________________________

[1] “Interview with Barack Obama”, SF Gate.com, January 17, 2008.

[2] “U.S. looks to green Europe - Mistakes there could shape American plans to curb carbon gases”, MSNBC, April 10, 2007.

[3] “Coal mine expansions in U.S. can’t match global shortfall”, Mineweb, June 17, 2008.

[4] “Barack Obama Statements on Coal”; Sourcewatch, accessed November 10, 2008.

The Housing and Economic Recovery Act of 2008: An Analysis by Catherine Austin Fitts

Scoop.co.nz:

The US Housing Bill 2008: Parts I - IV

Thursday, 21 August 2008, 5:40 pm
Column: Catherine Austin Fitts

Catherine Austin Fitts' Mapping the Real Deal series
See also: Parts I, II, III IV, V, VI, VII, VIII and IX

Part I – Overview

I have had several requests to comment on the Housing and Economic Recovery Act of 2008.

This afternoon, I read hundreds of pages of bill language. Essentially, my take on the bill is that Fannie Mae and Freddie Mac have issued more debt than can be paid back, so the "solution" is to have the United States government essentially assume responsibility for this debt until the fact that the government cannot service its own debt is addressed.

By clearly signaling to the market that the U.S. government stands behind Fannie Mae and Freddie Mac, this new law increases the national debt from $9.5 trillion to $14.8 trillion overnight (that is a $5.3 trillion increase as opposed to the $800 billion increase provided for in the debt-limit increase accompanying the bill). Not surprisingly, a lot of pork needs to be added to pay a lot of people to go along.

A more appropriate bill title would be the Housing and Economic Takeover Act of 2008. Rather than declaring the New World Order, we are apparently going to legislate it sector by sector.

Here is the bill language:

Housing and Economic Recovery Act of 2008

Here is a rosy summary from the Senate Finance Committee:

Senate Finance Summary – Housing and Economic Recovery Act of 2008

The best overview so far is from Larry Lindsey. Lindsey was one of the more excellent governors of the Federal Reserve. Lindsay had to resign from the Bush Administration in 2002 as director of the National Economic Council when he had the good sense to warn that the Iraq War would be expensive.

Hank Paulson's Fannie Gamble

As Lindsay points out, the number of porky add-ons in this bill are stupefying. Bloomberg provides a review of one:

Fed Loans to Banks Made Easier By Fannie Mae Rescue

Part II – Nation State or Investment Syndicate?

One of the instructive features of the housing bill is the nature of creditor politics that is a subtext on housing and mortgage politics these days. One investment newsletter this weekend reported that there are $947 billion of Fannie and Freddie paper listed as being held in foreign exchange reserves worldwide, of which $100 billion is held by Russia.

That sounds low to me. However, since these are "reported" figures, we will work with them. Can you imagine the politics of a Fannie Mae or Freddie Mac bankruptcy when their largest investor also has nuclear bombs, submarines, and satellites? Also, can you imagine the politics if the Russians bought their Fannie Mae and Freddie Mac securities with IMF and other foreign-engineered "bailout" loans arranged contingent on a secret agreement that a portion of the proceeds would be used to buy Fannie Mae and Freddie Mac debt?

I once had a senior Russian official encourage me to switch sides, so to speak. I told him that no one ever accomplished anything by betraying their country, and that working inside is the best way to address policies gone off kilter. It was not until we parted company that I realized that I had been speaking with a representative of one of Fannie Mae's largest investors.

Chinese Government Is Top Foreign Holder of Fannie Mae, Freddie Mac Bonds

Report on Foreign Portfolio Holdings of U.S. Securities, as of June 30, 2007, published April 30, 2008 by U.S. Treasury, Federal Reserve Bank of New York, Board of Governors of the Federal Reserve System

Part III – Your House Is Bigger Than My House

When I was Assistant Secretary of Housing and Federal Housing Commissioner, then Secretary of HUD Jack Kemp asked me to his office for a private discussion. He explained that he was concerned that I was standoffish and did not socialize with the other political appointees, the "principal staff," at the agency.

I was surprised and noted that I had invited the principal staff to my house for cocktails or brunch five times, and with one exception none of them had ever reciprocated. I noted, in fact, that I had invited Jack all five times and he had never once come. He looked at me with shock and said,

"I would never come to your house. Your house is bigger than my house. I would find it castrating."

I tell you this story because it is very difficult for hardworking, busy people who are subject to the discipline of market forces to fathom what is going on in Washington these days.

It is not in most people's experience to witness a complete breakdown of financial controls that does not impair one's ability to continue to borrow more money—indeed, access to more money is near infinite (see "The Military Holds the Dollar Up"). And this situation is combined with decision making driven by personal profit and imagined sexual potency.

This state of affairs can exist only when it serves the interests of those who are quite clear-thinking and far more powerful than those who work in the Administration. You can attack and take over a country. Or you can simply let it borrow itself to death in a financial coup d'etat. Recent history suggests that the second is infinitely more profitable for the victor.

Part IV – The Profits of Playing Ball

The housing bill brings up a number of important questions about the risks and rewards that result from government subsidy and bailouts.

One recent market commentator pointed out that Fannie Mae and Freddie Mac executives were allowed to keep the big bonuses they made engineering the housing bubble and bankrupting the companies.

One of the examples given was Jamie Gorelick, (1, 2) who joined Fannie Mae as vice chairman from 1997 to 2003 after engineering the move to private for-profit prisons as deputy attorney general in the Clinton Administration. Gorelick's name received national attention as a member of the 9-11 Commission and close advisor to Hillary Clinton.

Gorelick got Fannie Mae compensation and bonus payments of $26 million, which she gets to keep.

However, the bill stipulates that Americans at risk of foreclosure who get a mortgage workout must share future equity capital gains with the government.

Cathering Austin Fitts: Factors Driving the Stock Market Down

News & Commentary,

October 10, 2008 at 9:10 am

There are numerous factors driving the stock market down. Here are a few important ones:

1. Debt overhang: We have issued far more debt than we can pay back. This is being used, among other things, to reengineer fundamental laws, governance and rights globally. The debt overhang and the governmental changes it is being used to engineer (financial coup d’etat) are bad for stock markets and broad-based private property rights.

2. Absence of good pricing data: Large financial institutions have no way of accurately pricing outstanding risk of a significant amount of complex instruments. Among others things, history is proving that they cannot trust the chain of trust: bankers, auditors, lawyers. As a result, their ability to transact and loan to each other freezes. In one sense, think of this as the price of the absence of integrity within the system.

3. Economic warfare: We are experiencing the first planetary “pump and dump” — we are now in the dump phase. The largest or craftiest financial institutions with access to and control of sovereign government intelligence and resources are able to subsidize themselves and gain market share and control of tangible assets by driving down shares of other financial institutions and companies.

4. Individual investors are leaving the party: Remember when your parents would not allow you to go to a party that did not have adult supervision? Given the refusal of the government to use enforcement powers to enforce the laws or to protect market integrity, the stock market lacks the equivalent of adult supervision.

5. Corruption tax: Centralization and corruption are expensive for everyone but the insiders … and the number of insiders is shrinking.

an anonymous comment on the Catherine Austin Fitts Blog:

anonymous because of content..

Oct 10th, 2008 at 1:01 pm

Catherine,

After steering this person to your writings, he replied:

I’ve read excerpts of her writings, which are as detailed and insightful as any you’ll ever read regarding the symbiotic relationship between our government, “mainstream” economy, and crime (and virtually all that it entails, including covert “nation building”… or destroying depending upon how you look at it)

Allow me to provide a narrow example. One of my best friends is a Federal Drug Enforcement agent. He did a tour in one of the most dangerous countries in the world, XXXXXX . He was there for X years.

His primary job while there was to raid the Columbian forests of cocaine farms and labs. They’d get “tips”, and then they’d be given the “green light” to go in, flying low over the canopy by helicopter, and to do “jumps” so as to seize these properties, drugs, etc. (but very rarely people).

In doing so over the years, my friend always told me that it was far more dangerous being off-duty in the cities than it was doing “drops” into the jungle. Occasionally, a jumper would get hung up in the canopy, but I think in eight years their choppers were shot at once. Moreover, “every single time” they seized a farm or lab it was clear that the occupants “knew they were coming”. On many occasions, while flying through the jungles they’d discover camps or farms that were occupied – where they could actually make arrests. However, they were not allowed to raid these camps, without “proper authorization”.

At first my friend was terribly frustrated by this, but it didn’t take him long to realize that much of this exercise was “choreographed” by the Columbian government and our own, which if looked at from the perspective of someone such as Fitts makes perfect sense (as well as anyone with half a brain).

While my friend’s job remained very dangerous, it was in essence a public relations job as much as anything else, designed to give the appearance of a “war on drugs”. They could have seized more property and made more arrests, but they were not allowed to.

This is a simple, but perfect example of how it works. Not just in South America, where it’s as rampant as anywhere in the world, but virtually everywhere – and represents a critically huge part of our global economy – as many well known American corporate brands benefit directly from the drug trade, by laundering their moneys.

Think about it, remember when the war on drugs was being described as the “scourge of America ” and out nation’s biggest problem. Well, it hasn’t gone away. In fact, it’s gone relatively unchanged. We’ll circle back as the media will jump on it a bit, they’ll be a hearing on Capitol Hill, then we’ll legislate and throw some money at it with a press conference to follow – to re-convince everyone that there is, indeed, a “war on drugs” – and then we’ll all forget about it again.

Interestingly, up to this point we’ve done little to undermine the Heroine trade in our ‘war’ in Afghanistan, which represents more than 50% of the Afghan economy – and the lifeblood of the Taliban, and to a lesser extent Al Qaida. Wonder why that is?”

I met a man who was in the military and refused a mission because he was expected to kill people who were disrupting the drug trade. He was thrown in the brig and discharged. He refused to murder innocents. He told them that he signed on to protect the Constitution and this was not protecting the Constitution.

Catherine Austin Fitts votes to execute Goldmann Sachs

a post and a couple of clarifying comments—

An E-Mail to a Member of the Research Team at Goldman Sachs

Catherine and Daily Musings,

October 7, 2008 at 1:10 am

Solari.com:

Harry:

Thank you for the opportunity to be on your e-mail list. I appreciate your generosity and hard work.

I am writing to ask you to unsubscribe me from your list. I value your research reports. However, it would be hypocritical of me to accept them.

I believe in death penalties for private corporations and partnerships. My vote for one of the first to be executed is Goldman Sachs.

You and your colleagues have helped to build and manage a machinery that has committed treason and genocide on a breathtaking scale. The history of Goldman Sachs over the last two decades is living proof that it is possible to kill with a financial system and a pen.

The fact that you don’t understand what you and your colleagues are doing is breathtaking. It raises more than a few questions about whether you understand what is really behind the flow of funds you track and publish.

The question before us is who will pay the price of the mess that you and your colleagues have had such a significant hand in creating:

Who will lose their business and who will keep it?
Who will lose their job and who will keep it?
Who will lose their home and who will keep it?
Who will lose their reputation and who will not?
Who will lose their family and who will not?
Who will lose their health and who will not?
Who will lose their future and who will not?
Who will lose their life and who will not?
Who will lose their freedom and who will not?

My plan for bailing out the country would include asserting common law offsets against the assets of the NY Fed member banks and all of their partners and employees who benefited up to an amount sufficient to repay $4 trillion missing from the US government, to fund losses caused by the manipulation of the precious metals markets and to fund claims of fraudulent inducement and fraud on mortgages and mortgage securities. To fund the offsets, I would propose to seize the offshore and onshore assets of those who created the mortgage bubble and derivatives mess in the first place.

Frankly, I see no reason why millions of poor people around the world should pay a global tax through the dollar and US treasury and agency securities for which the American people are liable, so you and your colleagues can continue to live in comfort and luxury without concern that you will be held accountable to the same standards of enforcement applied to the people who live in the communities wrecked by the mortgage, money laundering and financial fraud that made you and your clients so powerful.

It seems to me if anyone should lose their business, jobs and home, it is you and your colleagues.

Sincerely Yours,

Catherine Austin Fitts

______________________________________________________________

Carolyn

Oct 7th, 2008 at 4:19 pm

Re: common law right of offset. A right at “common law” is one that comes about through court precedent rather than a statute. Many, if not most, common law rights came into being before we had statutes, i.e., from England. Sometimes common law rights exist side-by-side with similar, or even the same, constitutional or statutory rights that are in “code” form. An attorney would argue in court for the common law right either when there is no statute or when the statute is more limited than the broader common law right.

A right of offset is just the right of one who holds the property of another (e.g., a bank) to seize that property to satisfy a debt or liability incurred by the owner of the property. So, for example, the IRS has the right to set off your tax refund against taxes otherwise due and unpaid. Similarly, if you have a savings account at a bank as well as a credit card with the same bank and you don’t pay the amount due on your credit card, the bank can apply (or “set off”) the amount in your savings account against the debt. Catherine is applying this concept in the case of member banks of the NY Fed on the theory that because the Federal Reserve Bank of New York is the depository for the US government, its members are responsible, or liable, for the “lost” $4 trillion of government money. As I understand her statement, she is suggesting that the federal government should seize, by means of an accounting offset, funds owed to the member banks by the US Government as a reimbursement to the American people for their loss. In that case, the banks whose money was seized would then have to sue the government and prove that they did not owe that money to the government in order to recover the amounts seized.

___________________________________________________________

Richard

Oct 7th, 2008 at 4:35 pm

My dear Ms Fitts: You go girl…I have only one legal point concerning your continuous desire to recoup “the $4 trilion missing from the US government” ( I assume the Defense Dept. budget ). And that is: How would you deliver as discovery the accounting books of the Pentagon to corroberate the numbers? Furhermore, how would you also include the names of the actual banks to which the moneys were transfered? I am in complete favor of the recoupment of the vast ceo and executive officers abundant bonuses and pay to repay this admitted loss. Love your work. I’m falling asleep listening to you on coast to coast ( 2 am EST ), as I wake at 5 am…. be well and stay well, Richard

––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

catherine

Oct 7th, 2008 at 11:45 pm

Richard:

The NY Fed as depository for the US government is responsible for federal government bank accounts. According to US reports, US government agencies have over $4 trillion of undocumentable adjustments. Those are transactions that can not be proved to be authorized by the Congress, pursuant to the constitution. If you follow the common law rights of offset asserted in the Hamilton Securities case (see http://www.dunwalke.com/gideon), I would argue that the NY Fed banks are responsible for effecting unauthorized transactions. In theory, we do not have to prove where the money went or have the detail. We can assert our right to to that amount and proceed with offsets.

Such offsets could take the form of extinguishing outstanding debts, even taxes due. So you don’t get cash back from the parties involved. You simply extinguish what you owe.

If you combined such offsets with local tax escrows and local currencies, a lot could shift.

Ten Reasons Not To Bail Out Wall Street

by Catherine Austin Fitts and Carolyn Betts, Esq.

(1) Crime that pays is crime that stays.

There is reason to believe that Wall Street and those they represent are holding loans without collateral, multiple loans secured by the same properties, and other fraudulent instruments among the “troubled assets.” Based on the secret “Treasury Conference Call” with 800 Wall Street insiders, we know the deal proposed to be passed by Congress isn’t the real deal promised to Wall Street.

(2) This smells like obstruction of justice.

Bail-out without due diligence of so called “troubled assets” is a perfect way to hide documentation of financial crimes. It is also a perfect means to launder both the past ill-gotten gains and new federal money spent recklessly and without necessary safeguards and oversight mechanisms. Be very suspicious when they tell you “we just can’t tell what’s in these troubled assets.” We can assure you that the federal government has field offices all across the country that deal with significant amounts of real estate and mortgage assets on a dailyl basis. If Treasury refuses for more than a decade to comply with the laws, with approximately $4 trillion missing (and counting), it is not competent to manage $700 billion of taxpayer money while its arm is twisted by Wall Street.

(3) Wall Street owes the federal government money.

We need to get stolen money back from the banks that served as depositories for the US government (including trillions for which the Pentagon and HUD could not account) and punish them, not create another opportunity for them to game the system and engage in criminal enterprises to rob consumers. To the extent there has been regulatory wrong-doing, let’s not let the miscreants leave town with the evidence.

(4) Good guys are shut out.

A bail-out provides no way for honest leaders to come to the fore and use their creativity and expertise to restore balance and integrity to the system or for unproductive and poorly-managed banks that contribute to current over-capacity in the banking system to die a dignified death.

(5) This results in more investment in the “bubble economy.”

Spending massive amounts on non-productive uses (“buying” worthless credit default swaps, mortgages with no collateral and derivatives, which could even include the derivatives used to manipulate the precious metals markets) as opposed to productive uses (repairing infrastructure, creating alternative energy systems, supporting inventing and production of “green” products) is inflationary.

This bail-out will drive prices of food, water and energy up for the people who can least afford it.

(6) Bail-out does not result in capital circulating in healthy ways.

The bail-out of Wall Street and too-big-to-fail banks and insurance companies that are getting bigger by the minute by swallowing up other failing financial institutions (and creating more institutions that are “too big to fail”) does not result in trickle-down to those whose money was stolen in recent swindles (S&L, dot.com, current housing crisis), i.e., the taxpayers/middle class and working poor.

(7) These arrangements will result in more corruption.

Centralized “fixes” are sure to result in black holes, no-bid contracts and other scandals.

(8) The bail-out drains the real economy, rather than invests in the real economy.

The US economy can’t be productive or grow if consumers don’t have jobs and can’t afford to purchase goods and services. Real stimulation of Main Street is accomplished through productive investment, not bail-outs that shift money to unproductive sectors. We should use all of our precious resources to reinvest in our people in the real economy.

(9) It props up sectors that need to downsize and consolidate.

There is significant overcapacity in the financial and banking sectors. Brainpower and talent needs to stop blowing financial bubbles and shift to economic activities that create real value.

(10) It is a temporary “fix” to keep Wall Street afloat until after the election.

Our resources are better invested in permanent, long-term solutions. This bail-out will not fix anything. Rather, it will help the perpetrators get away and ensure that the ultimate day of reckoning is worse.

The Administration wants to drain the real economy to bail out Wall Street. It seems to us that the more appropriate plan would be to require Wall Street to return the $4 trillion plus that is missing and use that to rebuild the real economy.

We think the time has come to reverse the flow. Go to any business school in the country. That is what they teach. Money should move out of unproductive sectors into productive sectors. The bail-out does just the opposite.

“Just say NO!”

Thinking of buying foreign currency to save your dollars?

A few months back I considered doing just that. Looks like I may have missed my chance.,

Catherine Austin Fitts's blog:

Slow Burn Capital Controls

Catherine and News & Commentary,

September 15, 2008 at 6:09 pm

A broker reported to me today that their clearing agent is requiring them to mark purchases of AAA sovereign bonds denominated in foreign currencies as “speculative” investments.

Pressure to do this apparently is coming from the U.S. Securities and Exchange Commission (SEC). This means if Congress and the administration request that the SEC take action to “stop speculation” a mechanism will be in place to insure that U.S. investors cannot protect themselves from a falling dollar.

Lest capital controls domestically inspire you to leave the country, you may want to educate yourself about the exit tax that was passed by Congress in the Heroes Act of 2008.