Special Solari Report: Bitcoin – The Op with Harry Blazer


Subscriber Content and Resources

Read the Transcript

Read the transcript of Special Solari Report: Bitcoin – The Op with Harry Blazer here (PDF)

Listen to the Interview MP3 audio file

The Solari Report 2017-10-12

Download the Interview audio file

Links:

Special Solari Report-How the US Government Handles Taxation for Cryptocurrency (including Bitcoin)
Bitcoin Basics
Satoshi’s Paper
Bitcoin Charts
Nexus Earth
Blockchain-Wiki
Cryptocurrency-Wiki
Bitcoin-Wiki
The Ethereum Network
Cambridge University: Global Cryptocurrency Benchmarking Study
Cryptocurrency Prices
Princeton University: Bitcoin and Cryptocurrency Technologies Online Course
Some Things You Need to Know and Privacy at Bitcoin.org
DOD and HUD Missing Money: Supporting Documentation
Crypto Commentary: Both Sides of the Coin
Harry Blazer’s Notes for Bitcoin – The Op here.

“You can’t solve a political problem with a financial product.” ~ Catherine Austin Fitts

This week Harry Blazer joins me for a Special Solari Report to discuss the dark side of the cryptocurrency revolution. Whether you choose to speculate in cryptocurrencies or not, make sure you understand their deeper nature as bubbles.
.
So Many Bubbles

I have lived through and cleaned up the financial engineering of many previous market bubbles.

I was one of many Wall Street associates involved in the NY fiscal crisis aftermath.

Next came the S&L debacle (sometimes called the financial side of Iran Contra) combined with the housing and real estate bubbles that resulted in a $500 billion federal bailout. I rode the pump up on Wall Street and rode the dump down as Assistant Secretary of Housing. I helped clean up as lead financial advisor to the Federal Housing Administration.

While the mortgage market was clearing the mess and laying the train tracks for the next mortgage bubble, we had an interim Tech Bubble.

I was at Ester Dyson’s conference for Silicon Valley elites in the Arizona desert in 1997, when venture capitalists started throwing millions at Internet start-ups. You need $500,000? No problem, as long as you agree to take $10 million instead, pump up the company, and do an IPO into the bubble.

Companies were set up that had zero chance of generating a profit. But you could finance some kid who did not know any better with $10 million and sell the shares to retail investors and pension funds at $100 million. So, who needed company profits? In the words of one of my Wall Street partners, “by the time it crashes, we’ll be out.”

Many companies that could have become real businesses became IPOed wrecks on the Internet stock pump and dump superhighway. Their time and work were sucked out by the bubble. Before it ended, they lost everything. They could earn some of the money back, but lost years and reputations were often not recoverable.

Then came the mother of all bubbles yet – the US-led global housing bubble. The US government, banking, and mortgage banking communities combined the fraud technologies they had created during the S&L debacle and turbocharged them with derivatives. And the rest is history.

The US government seized the databases I was designing to conform mortgage and equity market data to street level data in 1997. I started warning global investors in 1998 – in the USA, in Asia, in Europe – few listened until mortgage pump leader Goldman Sachs shorted the market in 2007, thus announcing that the pump was over and the dump had begun.

In the summer of 2008, shortly before Fannie Mae and Freddie Mac needed to be nationalized, my weekly appearance on a San Francisco Bay radio station was cancelled. A leading San Francisco investment manager then published an explanation of a $1billion loss on Fannie Mae stock – purchased only months before. The investment manager had done extensive due diligence. He did not mention, however, that the former Assistant Secretary of Housing had been on a leading local radio program at peak drive hours for years, warning them about the extent of the fraud.

Actually, it took longer for some folks to listen–one financial professional as late as 2012 told me they did not believe my warnings about the extent of the government and private mortgage fraud–despite more than $20 trillion of bailouts at a time when about $8 trillion could have retired all the single-family home mortgages in the country. They did not understand how digital technology had expanded the tools available for such frauds to be centrally engineered.

Then, of course, we know now that some $21 trillion is missing from the US government since the fiscal year 1998. What do those trillions have to do with corporate revenues and profits outperforming the US GDP during the period–by extreme percentages? One must ask whether the stock market reflects economic activity or a financial coup d’etat?

And what does a refusal of the government to balance its books have to do with cryptocurrencies? It’s simple – if I can print money from a central bank to finance the US government and then steal trillions – then I have all the money I need to pump a financial price – any financial price. Indeed, if I can source such a near infinite amount of capital, I can manage the equity and fixed income markets. If I can do that you know I can pump digital “0”s and “1”s.

And to keep a lid on inflation, it helps if millions of retail investors purchase digtal assets instead of gold, silver and farmland and other real assets.

Next Bubble or the Next Leg of the Financial Coup d’Etat?

Bottom line – Know a bubble when you see one. Have respect for the skill of central bankers and US intelligence agencies to engineer a bubble, turning nothing into something and back into nothing. This sophisticated but practical alchemy belongs to people who really do control and manage financial markets and their intersection with organized crime.

BUT – hold on to your hats – a crypto bubble has the potential to do the greatest damage and bring the most change yet.

Take all the fraud and manipulation technologies that created the last housing bubble and turbocharge them all with a global smart phone market, entrainment technology, and subliminal programing and you could get the mother of all global bubbles. Especially if you are looking to create global digital currencies.

Mr. Global has the freedom fighters prototyping their new digital currencies, sucking money out of the physical gold market (as the central banks keep buying) with young people proselytizing for a currency with no asset backing, and no deposit insurance or bank capital to protect the holder.

Too big to fail? No problem! Switch liability to the holder all the time, every time. Note how the concept paper for Bitcoin was published two months after Lehman brothers went down.

I have been doing due diligence on blockchain technology, Bitcoin, and cryptocurrencies for several years. Finally over the last few months with the help of friend and ally Court Skinner, I completed most of my due diligence and then attended the Nexus Earth conference with Harry Blazer.

Bottom line? We are likely on the verge of a tsunami of cryptocurrency bubbles filled with financial and cyber fraud. Where this one goes is beyond bubble.  Once innovations create blockchains and cryptocurrencies that can scale on an economic basis, we are off to the races with global digital currencies. Combined with cloud operations, this is the ultimate control system. With the “knowledge doubling curve” moving from a few years to daily, the people with access to this data and the latest in AI in software technology and quantam computing will have a mapping tool that can deliver the ultimate insider intelligence and near perfect control.

I just donated my Bitcoin holdings (from one donation) to the National Life Boat Association (we will need them), closed my exchange account and deleted my software wallet. The last thing I welcome is an avenue for anonymous transfers from alphabet players. Indeed since then due process from legal procedures has been removed for the “War on Terror.” I prefer honest bankers who practice “Know Your Customer” seated between me and the intelligence elements engineering frauds – big and small.

Harry and I have a lot to say on the explosion in development of blockchain technology and the growth of speculative investments in the cryptocurrency markets – so it was time for a Special Solari Report. Whether you choose to speculate in cryptocurrencies or not, this is a phenomenon that it critical to understand.  I have posted links to help you understand both blockchain, cryptocurrencies and the latest industry.

Next week we will post a Special Solari Report on the taxation treatment for US taxpayers.  If you are speculating in cryptocurrencies, I strongly recommend you read that as well. From what I see, there is an explosion of tax and regulatory violations in the cryptocurrency trading market coming. So make sure you are not manufacturing a “control file” as you trade. Mark sure you maintain complete offline archives to document your trades and positions.

Here it is!

Related Reading:

Nexus: State of the Union
Catherine Austin Fitts – Blockchain & Cryptocurrencies, What About You?
Crypto Commentary: Both Sides of the Coin
Crypto Commentary: Heads Up!
Crypto Commentary: Theory vs. Practice
Crypto Commentary: First Installment

Related Solari Report:

Bitcoin 101 with Sarah Wiesner

26 Comments

  1. I loved this report and listened to it several times. There is something that bitcoin reminds me of that you and Harry didn’t mention: multi-level marketing.

    *You had to get in early and be at the top of the chain to make the real money.
    *Instead of buying a lot of soap to sell, you have to buy a lot of hardware.
    *Instead of an upline, you have your chain – except that the “upchain” remains completely anonymous.

    Bitcoin seems like a hybrid of investing and MLM that wants to be a currency.

    That was the best way for me to try to wrap my head around it – without spending 100 hours on it. 🙂

    Thank you so much for doing the research and presenting it.

  2. I would have found an exploration of this subject more useful if the discussion did not include someone who shared your point of view. This is the same problem I had with your first stab at this subject. Andreas Antonopolous, Trace Mayer, Roger Ver, or Nick Szabo, come to mind as people who could articulate a defense of bitcoin. Also, one need not spend $200 plus hardware wallet. The most popular–Ledger Nano S and Trezor are both under $100.00. KeepKey comes in at $129. Not sure, but perhaps a VPN would address security concerns. All of this is not to say that I have bought the sizzle, although I confess, I did try to buy in at $700 earlier this year, but could not find anyone who could help me make the purchase–I am 72 and not a techie. My biggest reservation stems from the belief that TPTB are not going to simply step aside, and allow the masses financial liberation. I think the markets and the cryptos are bubbles being blown for perverse purposes, but perhaps offer an opportunity to grab some profit, if one is nimble and not greedy.

    • Do they have screens? I would want one with an independent, large screen. Again to much lost to user error and a good idea to have whatever you need to not make mistakes.

      I agree there is a benefit to having someone you don’t agree with. However, Harry and I had spent days at the conference working this out together – after I had spent many weeks with Court Skinner doing due diligence. It was like putting together the pieces of a giant puzzle. Frankly, I don’t know anyone who understands the big picture as well as Harry. So perfect if the focus was an op.

      My first guest on Bitcoin was in fact someone I don’t agree on but have great respect for. She is a major Bitcoin fan.

      Yes, I agree, this is a speculation. Challenge is making sure you have an exchange that will facilitate getting out at reasonable size and intervals.

  3. Great interview, Catherine! Thank you for it.

    Do you know if any organization has filed litigation to get the $21 trillion back for the taxpayers?

  4. Pondering the hard evidence I think it is difficult to argue that BTC was invented by a central entity with the goal of increasing control over the finances of the population:

    1. There’s no mechanism to inflate beyond the limit of 21 million BTC and any attempts to do so will lead to a hard fork with a much reduced valuation for the inflated coin. Traditionally, inflation has been *the* mechanism to covertly steal wealth from the population. Why would a central entity so easily give that up (more on this under 3).
    2. No central entity controls BTC. The recent battles surrounding segwit, block sizes in general and Bitcoin Cash and 2x in particular have very clearly demonstrated that. Considering the outcome of these battles, it is very difficult to imagine how BTC could ever be centrally controlled effectively. There will be more attempts, but they will likely go the same way Bitcoin Cash and 2x went. However, having said that, it is obvious that BTC is not perfectly decentralized. E.g. there are centralization and transparency problems surrounding mining (much of the hashpower is in China) and large exchanges (e.g. coinbase). However, it appears that the trend slowly goes in the direction of less centralization.
    3. Cryptocurrencies with central control exist (e.g. XRP), but they came *after* BTC. Why would an entity, who has the intent to increase control, not release a centralized crypto currency first and see whether it is accepted by the population? They can always bring out the decentralized variant later when it is clear that people do not buy into centralized variant.

    To my knowledge, all the evidence that points in the direction of a central entity is purely circumstantial. The name of the founder is certainly interesting, so is the fact that some of the involved algorithms (SHA-256) did originate at the NSA.

    Finally, it is important to understand that any attempt at exploiting potentially undiscovered backdoors (e.g. in SHA-256) will *not* lead to increased control. Instead, the developer community will replace such algorithms with safer alternatives. The affected crypto currency will then hard fork and the general population will chose the uncompromised branch. Surely, such an event would lead to a lot of chaos and lost value but such an attack clearly appears to be survivable.

    • BTC can be split down infinitely — however you are right there is protection from debasement. However, the debasement comes through the creation of ever more cryptos and ultimately with the central banks creating their own sovereign cryptos.

      The central banks will not give up debasement powers. Sovereign cryptos plus chipping will give them more debasement power than ever. However, if some places create sovereign cryptos with gold or other assets, there will be the real game changer. However, once you add chipping humans you have infinite debasing and/or taxation power.

      Strongly recommend that you read Tim Wu’s The Master Switch. We are in one of those periods of innovation. Ultimately when the centralized powers are ready to pull the master switch, they can and they will. So the question for all of us is how to overcome that moment. The only way to do with it is to face and deal with the physical force question.

      Control will not come through the software. It comes through the control of the people who control the hardware and software. Read Control 101. Same problem in the financial markets. Much of the control is instituted by controlling the people who implement.

      • “However, the debasement comes through the creation of ever more cryptos and ultimately with the central banks creating their own sovereign cryptos.”

        There will be more crypto currencies, including sovereign ones, that’s for sure. However, the action in the crypto markets in recent years has very clearly shown that BTC is pretty much unbeatable regarding security, acceptance, liquidity and store of value aspects. I don’t see how any new crypto (not even one pushed by a government) will be so much better in these areas that people will readily sell their BTC and buy the new crypto, never mind one that’s centrally controlled and inflatable.

        IOW, Bitcoin covers the digital gold use case very well and it will be close to impossible to convince owners to voluntarily sell their BTC for any other crypto, unless that crypto covers an area that BTC doesn’t, like cheap transactions (e.g. LTC) or support for smart contracts (e.g. ETH). The bottom line is that owners are and will be incentivized to hold the majority of their crypto wealth in BTC.

        Now, I do agree that there’s the threat of the psychopaths at the top at least attempting to roll out their total control grid, including chipping. Nothing would beat physical precious metals as money in such a world, that’s for sure. Even though I believe it will never come to that, I do have substantial portions of my wealth in precious metals for this exact reason.

  5. Andreas:

    Have to disagree.

    Bitcoin is not liquid in any meaningful size. And there can be plenty of seize ups even for small amounts. I assume that liquidity will improve over time. However, compared with the securities or bank deposit markets this is a thin market. No depth yet.

    Bitcoin is highly volatile in price – so no it is not a dependable store of value. It looks good now because it is a speculative bubble. But a rising price in a speculative bubble does not make it a dependable store of value.

    Bitcoin’s biggest problem is security of data and security of holdings. The action that will drive the price much higher is the approval of ETFs. That will help solve the custodian problems for many investors and bring retail in through investors they trust.

    If you study the finest custodian standards in gold depository or securities custodian and clearing or bank deposits in systems that have iinsurance, the Bitcoin industry does not compare – is quite primitive and insecure and does not ever know it. For someone who has cleaned up significant financial fraud, the absence of understanding of what is necessary to protect against financial fraud is the most worrisome.

    I don’t think there is any magic bullet – not cryptos, not gold etc. If you read Control 101 which I strongly recommend, the problem is that the people who control do so through physical force. Dealing with that is what we need to have freedom, liquidity or reliability on any financial product.

    Appreciate the discussion! Curious to know what you think after you have read Control 101.

    • I agree, compared to traditional financial products Bitcoin is not liquid, at all. I made the liquidity and store of value points in comparison to other cryptos, in response to the argument that more cryptos can and will be launched. Such cryptos will see some use but they are very unlikely to overtake Bitcoin in these areas.

      I’ll order Control 101 today.

    • Just watched Putin’s comment on cryptocurrencies. As sovereign governments launch options, I will be fascinated to see the terms and conditions and how the market prices. At some point we are watching a pricing arbitrage between regulated and non regulated.

  6. Catherine, I really love listening to you, thank you for doing a deep dive into this topic.

    Over the last year I have invested some money into Bitcoin, Ethereum, & Litecoin after learning about this technology. I really do think some of this technology will change the world. However, I have had my doubts about all of this after learning what I have learned from you, Joseph Farrell, Dark Journalist and others about the hidden system of finance, the SSP and Mr. Global / the Deep State. You have really articulated why I was apprehensive about this technology.

    I am currently holding those coins, and not interested in trading, with the intent of this being a alternative retirement account or something to leave to my kids. I have made some pretty impressive gains, but haven’t realized any of them yet by cashing out. My principal was not too excessive so if it went to zero tomorrow I would not be too distraught. I have the coins secured on my Ledger Nano S hardware wallet. But after listening to this conversation as well as your recent interview with Dark Journalist, I am a little lost on how to move forward. I still think we have a while before the scaling issues are figured out, but if I am hearing you correctly I need to exit prior to that point. Any advice for someone like me?

    Also, would LOVE for you to have a Bitcoin discussion with Andreas Antonopolous or Trace Mayer. These two individuals are really respected in the Bitcoin space and have an unprecedented understanding of the topic and I think the conversation would really help people in this space.

    Again, thanks for all you do!

    • OK, will explore for 2018.

      If you are going to speculate, I would pull your principal out and then continue to harvest a % of your gains as it rises – essentially playing from your winnings. Don’t pull the plug until you feel it is topping. There should be signs. Again, it depends on how the central banks convert this into their digital currency systems.

      • Sounds good, yes I think in 2018 I will start periodically harvesting my gains. I have a feeling 2018 is going to be a big year for Bitcoin with all the futures trading (CME, CBOE, Nasdaq), and well as individual investor interest growing massively. Just this week my CFO came into my office to ask me to explain Bitcoin, what it is and where to buy it.

        Another person that may be great to interview is Clif High, the predictive linguistic / web-bot guy. He actually persuaded me to buy Bitcoin, because his web-bot predicted massive increases in 2017. I think you both would have a fabulous conversation. He is very knowledgeable about the deep state activities, the SSP and the goings on in Antartica, and mentions you in some of the interviews he does, so he is a fan of yours also. He is a programmer/developer/computer whiz and so has a very interesting take on many things in the Bitcoin/crypto world.

        • When I discuss Bitcoin with Clif he starts screaming in 5-10 minutes. One of the last times we discussed it he exploded and wrote a long rant about how old I am. Reminded me exactly of Jack Kemp screaming at me that I looked fat in red at a time that I was a perfect Size 8. When logic will not work, start bullying!

          • Where McAfee is right is this – if the intel agencies need to take the price to $500,000 and just keep splitting them, they have the power to do so. When you can steal $50 trillion and print money, money is meaningless. It is about controlling peoples time and field. So the goal must be to speculate if you play it, but not let it command and intetwine with your time and field.

          • Interesting about Clif. I can see that though.

            I will definitely take your advice on stepping back and not letting is “command and intetwine with my time and field”. Crypto has a weird way of sucking you in and I have been absorbed in that and only that for most of 2017. 2018 I am going to get back to reading more Solari.com!

          • Keep it in its box, make $ if you want to speculate, and DO NOT LET IT CREATE A CONTROL FILE OR BASIS OF A SEIZURE AGAINST YOU AND YOUR BUSINESS> Not a bad idea if you have real assets to keep your CPA and attorney full briefed with documentation of what you are doing and your intentions and due diligence to be fully compliant.

    • Good ones. Byrne is a very smart guy who has the capacity to take this market in a more professional direction. This is becoming a tech tender for the whole banking side of the central banking warfare modle. Even more important – who controls the corporate contractors who control the NSA and how will 5G take this play to a whole new level?

  7. This is a million dollar question. Or should we say 21 trillion dollar question? It’s quite over my head! There is another question that I have been thinking about, Who is in the first line of controlling us? If the main power comes from physical control, it is the police and the military. so in theory, if the military decided to stand down…

    Those that are sent to the streets are just people like us, likely with families in the community, and you can’t possibly have a control file on each private out there can you? So… will they “just follow orders” to the end? Have they been zombiefied completely? If it comes to it, will they turn on their own people? Their pledge was to protect the Constitution and the People, don’t they see problems everywhere, like, everywhere? This is what really scares me. I think they will. I can only speculate about the level of mind control they must have received…

    Volunteer military is a big problem, imo. That might have been a lesson “they” learned from Vietnam. No drafts – no protests against a perpetual war.

  8. Hello! Thank you for your work on educating about this. I can’t access the “Read the transcript of Special Solari Report: Bitcoin – The Op with Harry Blazer here (PDF)” Is there somewhere I can access it? Many thanks.

Leave a Reply