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.