The Slow Burn

People often ask whether I am concerned about inflation, deflation, peak oil, or a global financial meltdown. My answer is as follows.

The future is something to be created, rather than feared. Allocating our time, networks, and resources to deal with a variety of high-risk scenarios frees us to become proactive and to build positive futures instead of negative ones. I like to understand what these scenarios mean in terms of managing risk and to know how we can succeed within all possible futures.

But my business is investment, not prophecy.

The risk scenario I weight most heavily is not listed above. I call it the “Slow Burn.”

The “slow burn” is a political culture and economy managed through principles of economic warfare in which insiders systematically protect themselves and centralize control and ownership of resources by using:

  • Central banks
  • Currency and lending systems
  • Taxation
  • Regulatory and enforcement policies
  • Controlled media and entertainment

Insiders use these means to drain the time, resources, and life of people on the outside. Although insider cartels compete and jockey for power, they are able to settle their squabbles by increasing control and draining everyone and everything else. This is why the bubble economy continues to deplete the real economy. It is likely the reason why Dick Cheney said, “Deficits don’t matter.”

In a slow burn scenario, it is possible to prop up trillions of dollars in financial asset values by systematically arranging subsidies that ultimately liquidate life. This is what “managing” markets really means: de-populating people and places to maintain phony values created and necessitated by derivative bets.

The reason why it is difficult for sophisticated financial people to discern that a slow burn is taking place is because we have not yet collectively mastered the operational detail of how it is implemented. This is an extremely important subject.

One of the most important aspects of the Paulson Plan to re-engineer US financial regulation is the assertion of complete control of payment systems by the Federal Reserve and gaining access to the data of essentially any financial institution. Combined with 1) the ability to print money and 2) digital communication payment and surveillance technology (satellite), this will consolidate greater power into fewer hands than at any time in recorded history.

As Nicholas Negroponte said, “In a digital age, data about money is worth more than money.”

36 Comments

  1. I think Catherine’s remarks here are the wisest I’ve so far read on the meltdown, or as she says, the slow burn. The big boyz plan to survive and don’t care how many of the little folk get crushed. The little folk are slobs, an Inferior race of people; the hell with them. When are we going to get a new financial system, that is, the one described by Zarlenga at the American Monetary Institute where the government (new people of course) issues money interest free? My guess is only after some sort of awful catastrophe. It’s in the air.

  2. Sooo, what the heck do we do? Now big bank & brokers apparently are making money off of the debt packages that they bundled and “jammed” by buying them back at cents on the dollar and using them for collateral along with commercial paper to get CASH from the new Fed facilities. Treasury auctions appear to be off the chart successful over the last several weeks. Hedge funds are even trying to short the entire Nation of Iceland! What the hell is going on when we have orchestrated international treasury buying and Nations getting shorted?

    These people just won’t stop. Also we have disparate articles from multiple sources indicating that something is majorly going down in the Middle East.

    In the meantime people are distracted with “carbon footprint”.

    Dammit something has got to give. Regrettably Kunstler, Panzner and Schiff will all be correct before people start to wise up. Even the Dalai Lama is being used as a Pawn to goad and embarrass Hu.

  3. I greatly appreciate Catherine’s positive approach to problems; let’s solve them. On September 21, 490 B.C. the 9,000 citizen-soldiers of Athens rallied together to withstand a far better equipped Persian army of 26,000 in a fight for freedom at the Battle of Marathon. The key in our battle is to understand the deceptive nature of the attack and the type of weapons used. Catherine shines a lot of light on both of these. (A BIG THANK YOU!) Others are at work at this as well. Although it may not be clear to all of us what to do today about these matters here is one thing we can all commit to do that will help. Commit to looking into something new each day either about the problems we face or the solutions we can implement. In a year you will have seen 365 new things that will be helpful in preserving liberty and life. Even if we obtain half of that we are moving in the right direction.

    “A popular government without popular information or the means of acquiring it, is but a Prologue to Farce, or a Tragedy, or perhaps both. Knowledge will forever govern ignorance and a people who mean to be their own Governors, must arm themselves with the power which knowledge gives.” ~ James Madison

  4. I think the biggest hurdle is the populace’s general ignorance of the financial system. We live in a sound bite world with most people’s eyes glazing over after 3 seconds. I too appreciate all of Catherine’s teaching and wisdom. I have come to realize that your suggestion of learning solutions daily Robert has more power than it may seem on the surface. I have been following Catherine for years and only now am I being asked for information and or solutions (even though I was talking about our coming financial woes ad nauseum). I’m glad I have been plugging away at it for a while so I can simplify and make things concise. I also must say hanging around Ron Paul supporters has been the most refreshing for financial literacy conversations, you don’t even have to be supporting Ron to enjoy their company. I’m going to continue with my daily homework, thanks for the suggestion

  5. The Slow Burn is what I call the capitalism-derived system of systems in which we live winding itself tighter and tighter. It’s your Tapeworm Economy eating everything of the body of its host, and looking for its soul.

    Otherwise, what Tom White said.

  6. If people thought The Matrix was only a movie, Catherine has described The Matrix. Note that The Matrix saps the life of the people while they believe all is normal.

    “Humans are complex beings that can die in more than one way” –Karl Polanyi, from “Our Obsolete Market Mentality”.

  7. It amazes me to no end the pundits and simple folk alike are intently watching to Dow for an entry point back in the market. A recent piece on NPR had an author explaining how the Stock Market transformed its 1920’s reputation as a “bawdy Las Vegas” of its time to the present “respectability” it enjoys as the undisputed repository of financial sensibility and long term financial planning.

    I think the key problem for average/unconnected folks is their inability to understand and appreciate the strategic value of time. I laughed out loud from Catherines graphic of the frog and the boiling water and trust many got the reference. If one accepts the theory that history is not just a series of random events but rather a well planned and steady progression of events, it is not hard to see that the real challenge is in applying long term planning to impeccable execution and realizing that change is accomplished only by an infinite progression of miniscule change units repeated ad infinitum. This leads me to the conclusion that there may, indeed, be different types of humans, or beings occupying the same space on this planet. The intelligence and execution of these recent events, with seeds planted years and decades ago, stuns me. Although these groups may not have interests which parallel mine, it is impossible for me not to watch in amazement as this life intelligence continues to manifest and absorb everything around it.

  8. there are those who are ranting and raving on the internet (bob chapman of international forecaster} that we should all drop everything and buy gold. he is scary this guy and he is
    a bit of a looney.
    what do you think?

  9. Harry,

    In the 1980’s the banksters dumped gold on the market after dropping the price of oil to retaliate against OPEC. It was their way to preempt the oil producers from recouping oil revenue loss in their economies by selling their gold to compensate for oil’s drop. It seems the same could happen now too. Of course the Banksters realize that dollar devaluation would result in a flight to gold… They have this well planned out.

    As the Bank of E and IMF are the world’s largest holders of gold bullion- will they dump again in reprise? (Remember the 2008 drop below 50 dollars a barrel was orchestrated to begin with by western oil co.s to wipe out oil producing ‘rogue states’ economies.) Iran and Saudi have been buying gold in recent weeks to the tune of hunderds of billions.

  10. It’s all just a game folks. Some people play on computers and other game systems, some people play in real life. The rules are the same for everyone, noone is disadvantaged or in an inferior position except the person that believes that “they” play by a different set of rules. I expect all the folks with victim mentalities to argue that, but I don’t care. You and I have just as much ability to accomplish what they’ve accomplished. Forget the misguided idea that because they started sooner they’ll finish first. There’s no end, there’s no “finish line” There’s no referee that’s going to say, “Game’s over, world domination achieved”. Knowing what’s going on and doing something about it are amazingly different. Seems most people are just complaining cause they didn’t know all the rules up front.

    That to me is the amazing thing about religeous people. They’ll split the church over the color of the carpet, drive people out cause the don’t fit in, and then complain that they can’t pay the bills cause half the people are gone. Corporations win cause they stay together, and get more together, and more together by bringing in more and more companies/people. (A stark contrast to religeous groups, when was the last time you saw two of them merge?) Seems like the rest of us could learn a lesson from that. I think if we can, we can win.

  11. Brilliant. This lady is right onto it. Particularly liked the “English” translation of the G-20 summit position. I thought they’d propose defaulting to the Euro there, with the IMF to take over as a world central bank after the next crisis meeting in a few months ( why America is being brought to its knees….the dollar will be crashed and hyperinflated ). I was wrong – too early ?
    We are also in a bad way in New Zealand and watching your struggle there. The USA will be hit hardest, now, but the aim is world control – consolidated by an ongoing phony War on Terror.

  12. Catherine Austin Fitts is a sociopolitical & economics supernova brewing to explode in many cost beneficial & meaningful ways. But in order to get a full understaning of what is globally taking place one must revisit now just about forgotten “The Club of Rome” & diligently study all policies that came out of this sociopolitical club.

    Take for example: “Codex Alimentarious” – it has been on the books since 1960s, the money to put it together has been spent. Here is the link to video that may expand the reader’s or rederess’ horizon on what is really going on.

    This is example on how I did the search for “Codex Alimentarious” – anybody with Internet can do it.
    http://www.google.com/search?q=google+video+codex+alimentarious

    Here is the link: http://video.google.com/videoplay?docid=-5266884912495233634

    There are more from the provided one – this will get one going.

    What is Mathematically Perfected Economy?

    For Example:

    While 12,000 homes a day continue to go into foreclosure, mathematically perfected economy™ would re-finance a $100,000 home with a hundred-year lifespan at the overall rate of $1,000 per year or $83.33 per month. Without costing us anything, we would immediately become as much as 12 times as liquid on present revenue. Transitioning to MPE™ would apply all payments already made against existent debt toward principal. Many of us would be debt free. There would be no housing crisis, no credit crisis. Unlimited funding would immediately be available to sustain all the industry we are capable of.

    There is no other solution. Regulation can only temper an inherently terminal process.

    If you/ one / we/ are not promoting mathematically perfected economy™, then we commit us to monetary failure.

    P.S.
    Meltdown 101: How is the CPI calculated, and why?
    http://www.washingtonpost.com/wp-dyn/content/article/2008/11/19/AR2008111903200.html

    By ELLEN SIMON
    The Associated Press
    Wednesday, November 19, 2008; 5:14 PM

    NEW YORK — The Consumer Price Index, the nation’s best-known inflation gauge, plunged in October thanks to a record drop in gasoline prices.

    But if prices still seem high to you, you’re right.

    Blaiming everyting else but not the true cause such as exponentially compounding usery/interests.

    Note:
    The Governments must free themselves from the opression of central banking – one & two – money/currency must be neutral issued debt free by the governments. The we will have real competition for customers not like we have today creating laws to do business.

    Those are the two pillars of MPE
    ms

  13. Kudos to you, Catherine! But is it not part of the fault of the masses who for example – shop Wal Mart in favor of killing mom & pops nationwide? If we abandon college in favor of learning self sufficiency and building our own homes- that is great! But I have a broken body and age against me. I still wish I could strike out in some small town and not be upside down.

    Could the rednecks have been right? BUY AMERICAN! Now all those smart economists don’t look so smart. The ol’ rednecks seem to have a message closer to yours. In those economics classes they never figured in container costs when I calculated gains in trade, so I knew there was a real world diconnect.

    I appreciate what you are saying, I just am unemployed, and scared, and wonder how long I can last.

  14. David Icke started me on this particular road down the rabbit hole, now Catherine goes even deeper. Personally I protect myself by rereading Thoreau and the simplicity of life.

    Food, fuel, clothing, shelter.

    Live your life. All these suckers are going to die off anyway. So let them enjoy their fun and games. We can play them too, maybe even more deviously…and dangerously.

  15. Robert:

    Based on my relatively recent experience of trying to survive in America when I was out in the cold (at the worst, I had phone and power turned off, etc), my advice is to work full time being useful at things that people might not pay you for, but may barter with you or just appreciate you for and ultimately it can translated into a cash flow or goods and services.

    For many years I would always help people, volunteer my time or answer questions etc. It took many years but it grew into two businesses that are now Solari and Solari Investment Advisory Services.

    Believe you me, I know how scary it can be. So just start being useful in and around things like food, energy, the basic necessities of life.

    You are in my prayers,

    Catherine

  16. Catherine, back in the year 2000 when the market took Trillions from equity holders I feel as if the system-house is playing us again. The working class (me) are being placed with a blue ribbon approach once again by the almighty controllers @ system-sick connectors in the U.S.A. It now represents Useless.Stagnant.Aspartame for we the people have lost any sight of leadership in this country where integrity and loyalty can be mentioned and followed through in a single course of a business day. The Trillions which were harvested back in 2000 are now being fed back into the system as a bail-out with interest attached. The cycle never ends and the working class people keep being placed in the erosion cycle in order to maintain a world class order of the elite. I pray for us at night and hope for a future which is bright.
    Catherine, thanks for being here and sharing your wisdom.

  17. The next time someone calls this system “neo-liberalism,” tell them “NO! It is neo-feudalism.” Those in power now act just as those in power did in medieval times,controlling land,natural resources, the necessities of life, and labor, only more completely, until we organize in large and smart numbers. Don’t underestimate the chaos theory. They can’t control everything all the time, not even close! They have created a pressure cooker but keep adding heat and tightening the lid! Physics determines what comes next.

  18. Start pulling out your lawns and ornamentals and start planting food crops in your yards instead. We all can begin to lend a hand in the great transition from a consumer-victim economy to a sustainable-self-reliant economy. Learn how to live with less “stuff” and have more quality time to share with your loved ones. Peace

  19. > this will consolidate greater power into fewer hands than at any time in recorded history.

    Worse than Stalin’s Soviet Union or Hilter’s Germany?

  20. Listening to your interview with Art Bell last night, one issue I don’t understand. You mentioned soccer moms who wanted to kick out the drug dealers from their neighborhood, and next thing they knew, the black helicopters were overhead. I’m not sure why that would happen. You mentioned a relationship between the neighborhood drug dealers to Tony Soprano to James Bond. Tell me it “ain’t” so!

  21. One of the real quizzical things to me is that all these ‘assets’ accumulated not in producing, selling and buying ‘stuff, things, products’ but in ‘producing, buying and selling’ PAPERWORK done on the ‘puters of the world. That entire four or five hundred trillion in ‘derivatives’ debt is no more than you and I colluding to convince people to buy our insurance against being struck by lightening and then recruiting a bazillion others to chatter it up on the ‘right’ internettubes, boobtubes and certain thin air high society social networks. When ya think about it, all that debt could disappear at this moment and the knobs, gears, switches, arms, wheels and widgets running everyday life would just continue upon it’s merry way…weird.

    Doubt Nothing Question Everything because nothing is simple and little is true.

  22. Catherine-Awesome interview w/Art Bell. I haven’t heard reliable info regarding those who still have some credit card debt, and have paid off most of their mortgage. If they get layed off and can no longer pay their bills, what recourse does the credit card company have to recover their $ ? I know the banks can foreclose, but will a locally owned bank be forced to forclose on the ones who have paid regularly for 20 years and only have a couple years left of payments? I try to understand the bigger picture, but understanding how to accelerate personal debt reduction seems impossible with the upcoming layoffs. Who takes priority or does it even really matter?

  23. Peggy:

    Great questions! Critical to ask it of people who are expert in the relevant areas, including state law and who know the practices of the institutions involved. The devil is in the details is these areas.

    Catherine

  24. Catherine,
    You are a really great writer and educator. I especially liked the article about narco dollars. But is there a way to stop what seems more and more our own evil-empire?
    And does Obama know that despite being president, he is not really in charge?
    Have they told him yet?
    Thanks for sharing your thoughts and observations with us.

  25. I think we as the citizens of the U.S. have a responsibility to unite and not allow this to happen. If people are united and against the very few who control the economy, only then will these greedy and narcissistic people be brought justice. At that point things would be forced to improve. They can only control people that are naive to what is happening, and it’s those people that will be most hurt my the down turn in the economy. I can’t believe we have allowed this to happen, it is really a sad situation, that most of the people in America have been manipulated and they don’t even know it. It is time for change, and the greed to stop, and for people to take responsibility.

  26. Fed is no better than a counterfeiter. It is willing to print $3 Trillion and give it almost free to banks (1.5% 90 days loan that can be renewed indefinately). Banks will use the $3 trillions to make $30 trillions debts (built-in leverage in banking) that will buy a lot of wealth, American people’s labor and sweat.

    Think about it. How many people have to work like slaves to earn the $3 trillion counterfeit money. They definately get empolyed, but as semi-slaves. The “printed” money is dirty than the
    tax dollars. At least the later represents the dollars already in the circulation. The Fed can create infinite amount counterfeits money.

    The these fake money come into play into the real ecomony that they will sure boost GDP 60%.

    How can you expect financil stability when you have a shadow manipulator such as Fed exits that has already ruined tens of millions of American financial lives in the past 6 years.

    It’s still in power even though its past monetary policy was totally disastrous.

    Don’t forget “Debtor is slave of creditor”.

    How many people out there don’t have debts, raise you hands?

    60% of all college students graduate with a degree and gigantic debts.

    It’s time to stop enslaving process the loans (debt).

    We American are so rubbed by taxes and inflation we have to borrow to pay for necessities.

    Stop serving the debts, walk away from the debts. This is revolt against slavery.

  27. @sue

    i agree with you that the american people should stand up to this. but we are too distracted, and sadly unwilling to make any sacrifices. real change requires serious sacrifice. some would have to be willing to lose jobs, some families, and others would have to be willing to make the ultimate sacrifice. i think the average american won’t do anything substantive until they lose everything, and there are no doubt measures in place to deal with that.

  28. Peakoil will take the wind out of the Elite’s sails. It takes energy to control things. Computers, vehicles, personal to feed(energy to grow food), airplanes(spy), etc. When people have nothing to lose they will become desperate and will do anything to stay alive, including stealing from the Elites in mobs. In the future(very soon) the Elites will not be as safe as they think they will be nor will they be in control. They will get lynched. The people have had a taste of luxury. Many years ago they did not. My point being that once people have things they will not be happy about losing them. Many years ago most people didn’t have it to lose so they did not know what they were missing. They always had to work hard. Once people have been liberated and then the Elites try to de-liberate them, well, the genie is already out of the bottle. Docile people of of the past. The Elites better think really hard about the Depression that has already started.

  29. Catherine: can you expand on your comment about the “drainage of time”?
    We all feel that this precious commodity is scarcer and scarcer and i sense this is NOT accidental.
    It to me lies at the heart of many of our problems as we have too much “no-time” to talk story, build community and gather our collective hearts, minds and voices…

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