2nd Quarter Wrap Up – Infrastructure: Conquest or Creation?

“Nowadays, people will go anywhere to avoid paying tax. A quick visit to Lichtenstein, Monaco, maybe Jersey; empty the vaults of private wealth, and you could write off the world’s debt. In a day, in an hour, in a minute. Three-quarters of the world’s cash is hidden away in places exactly like this.”  ~CIA agent in Turks & Caicos, Part II of The Worricker Trilogy

by Catherine Austin Fitts

There is a war going on – between the forces of control and conquest and the forces of collaboration and creation.  History teaches us that the civilizations which win at either generally get their infrastructure right. In fact, infrastructure may be the difference between the life and death, the prosperity and poverty of a civilization.

The United States has spent a great deal of money on infrastructure in recent decades and much of this spending relates to control and conquest. US telecommunications infrastructure is less reliable (and more expensive) than that of other developed countries – but it permits the NSA and a variety of private parties to collect and access intelligence. US software is often buggy, but “trapdoors” provide access to intelligence agencies.  In many areas, US roads and bridges are badly in need of repair, but we have poured significant sums into secret underground bases.

The United States has also developed a reputation for destroying infrastructure – whether destroying that of Iraq or other countries we invade – or decimating global communities with predatory lending and financial speculation which cause severe dislocations in local capital allocations.

Frustrated with the US, the IMF, the World Bank and traditional global financial institutions, the developing world is taking matters into its own hands by launching and financing mechanisms for significant infrastructure investment.

The BRICS nations are acutely aware that prosperity and environmental responsibility depend on significant and cost-effective investment in infrastructure. Opportunities to improve global connections – via air, rail, roads, pipeline, phone, or space – and to integrate new materials and technologies beckon.

China’s successful launch of the Asian Infrastructure Investment Bank has brought these questions front and center. In this week’s Second Quarter Wrap Up, I will explore this subject and its implications for US leadership.

The United States has produced a generation of leaders who have risen to power by cashing in on globalization – on natural resources in the developing markets and cheap debt – and relying heavily on the superiority of our weaponry. If you look at what must be done to succeed on the road ahead, we can ill afford such leadership now. As The Economist stated recently, “America’s aristocracy is calcifying.”

The BBC’s outstanding, three-part series from David Hare, The Worricker Trilogy, offers entertaining insights on this subject. In the series, The Gladstone Group, a syndicate of New Jersey businessmen and investors, are grossly over-billing the CIA for the construction of secret torture and rendition sites. A portion of this “padding” provides kickbacks to a global foundation to be launched by the British prime minister upon retirement (shades of Tony Blair?). This foundation’s stated goals are “humanitarian works.”




The Worricker Trilogy raises a critical question. We have piled up trillions of dollars in offshore havens and the bond markets. Now we must reinvest this money in the real economy. However, the real economy cannot produce significant returns without significant infrastructure. The long-term bull market in bonds and quantitative easing are over.

Political kickbacks schemes may have worked for engineering the financial coup d’etat and accessing natural resources and privatizations in the developing and frontier markets. However, it will not work for reinvesting in strategic infrastructure investment that Mr. Global wants going forward. Nor will skimming from Mr. Global (as opposed to for Mr. Global) be tolerated.

China’s leadership has primarily been trained as engineers. Engineers build bridges, high-speed trains, power and desalination plants and spaceships.

The US leadership largely consists of wealthy lawyers. Lawyers make rules, pass laws and litigate – and some of their laws create tax loopholes to fund global foundations and endowments.

Which do you think we need?

This week, I will also discuss Q2 news stories and financial markets.

Talk to you Thursday! If you’re not a subscriber yet, learn more about becoming one here.

9 Comments

  1. Hi Catherine,
    well..it happened again. I trolled around the MSM and crash porn crowd, post Greek referendum/China equities sell off, seeking reasonable info and insight. Tough crowd out there:)…

    Thanks again for your solid chops, a writer’s “voice” and simple honesty.
    See you at lunch in Austin,
    Scott Boland

    P.S. Karl Denninger at Greg’s site had some interesting tid bits into what a share of the “take” Med Monopolies are actually racking up….1/4 Fed Budget?!?!!? wow..make a move against that slushy river o’ dough ..indeed, not a healthy hobby!..cheers

    • Scott

      Ahh…the Bread & Circus and Doom & Gloom aftertaste!

      Will check out the Denninger piece – his analysis of the health care situation is always outstanding.

      See you in August!

      Catherine

  2. Hello Catherine,

    We greatly look forward to your report tonight!

    I must say that we know better, but our family is feeling the downward pull of concern, perhaps even some fear and “what’s the use” of all our work to build community and personal resiliency – as the news continues to get stranger. Seems like everyone (almost) is very worried about the 3rd quarter of this year, with predictions of crashes and personal freedom clampdowns coming from many corners. I know this kind of doom and gloom reporting has been going on for decades, but the ante keeps getting raised. California just lost it’s right for personal exemptions to vaccinate, Oregon is beginning to implement “Ore-go” a tracking device for cars, China’s stock market plunge, Greece, the strange and confusing Jade Helm exercises, Fukushima and the “dying of the Pacific”, etc… Many are suggesting that folks should either leave the US before September or be prepared for serious business.

    We are coming to you, once again, for a sound and reasonable response. Knowing that of course you cannot predict the future, what is your feeling about the vulnerability of the systems right now, and imminent breakdown (planned or otherwise)?

    Thank you so much!

    Jeannie

  3. Control and conquest vs cooperation and creation summarizes our choice well. I remain puzzled by how this fits in with your still valid choice formulation of centralization vs localization. How can an economic/political/legal (those lawyers again) consortium who control 90% of mainstream communication be influenced by us citizens (even though “we” vastly outnumber “them”) ? I still sense that nationally there is no forum for open public debate on these vital issues in our traditional media, which includes newspapers, magazines, radio, TV, and consequently also the voting booth. Our path rather appears to be wait for collapse or slow disintegration to force people to choose change or to initiate via internet and social media creative mass demand for change. And to me the most viable approach is to disengage from the national level and put all of our time and efforts into creating thriving local schools, farms,businesses, and within our budgets infrastructure. How do you reconcile central vs local within systemic corruption?

    Bob Fies

    • I agree with what you say – I also know that very strong polls FOR infrastructure and AGAINST destructive activities will swing support for the insiders who do want to go with more infrastructure. There is also a great deal we can do at the local level or local collaborating regionally.

  4. Hello Catherine,

    I am a recent subscriber so I am just getting to this older Podcast. But when I heard in this podcast that you have trouble getting people interested in infrastructure, it struck me as odd because there are entire genres of PC video games that revolve around infrastructure management.

    The Civilization series, which is one of the biggest selling game series, is pretty much solely about infrastructure management. However many other genres like Real Time Strategy (RTS) or 4X games (the 4X stands for eXplore, eXpand, eXploit, and eXterminate) are also heavily based on building and maintaining infrastructure. Anyone who has touched these types of games has a natural point of reference and frankly shouldn’t be difficult to convince that infrastructure is important and interesting. Especially because in all these games the infrastructure management is naturally addicting on some level and most people to do pick them up lose weeks of time simply being fascinated by how to best manage what they are given.

    Best Regards,
    Jonathan

    • I wish I could edit my first comment – my phone had rang right as you mentioned SIM City and railroad tycoon on the first listen so I missed it but saw this after looking at your web presentation. So you got this covered already. But there is much more out there than those two games and people that can relate to a whole slew of similar games.

      Please let us edit comments.

    • Jonathan:

      Thanks for the recommendations. I have lost touch with games and appreciate having someone who can come up with timely recommendations!

      Catherine

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