Monday, June 28, 2004

I have seen the future...Of the U.S.A.



America's Black Budget And
Manipulation Of Markets
Mapping The Real Deal With Catherine Austin Fitts
Financial Sense NewsHour
Radio & Net Talk Show Presenting
Catherine Austin Fitts w/ Jim Puplava
May 22, 2004 Netcast

6-28-4


Investors benefit from understanding the federal budget, credit policies and covert intervention that drive markets -- often overriding fundamental economics. How has the US governmental apparatus become so powerful in the marketplace and what does it mean to the health of our economy? How unstable is the mortgage bubble and where are the opportunities for investors if the bubble bursts?

For providing us with a transcript of the show, special thanks to one of Jim Puplava's Financial Sense NewsHour listener, Glenn Assheton-Smith, and his fellow investors at the http://www.siliconinvestor.com forums:

Epic American Credit and Bond Bubble Laboratory Forum
http://www.siliconinvestor.com/stocktalk/subject.gsp?subjectid=54034

Ride the Tiger with CD Forum
http://www.siliconinvestor.com/stocktalk/subject.gsp?subjectid=54430

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JP: Catherine, we've seen a lot of information and a lot of concern on Wall St. about the Mortgage markets. We've seen consumers take on more debt when it comes to taking on bigger mortgages, refinance. But this story gets much bigger than just the credit itself.

CA: Sure. Where would you like to start?

JP: (Laughter) Well, let's talk about black budgets and how the manipulation takes place in the mortgage and financial markets.

CA: OK. Let me start off with a story. When I became Assistant Secretary of Housing, I left Wall St. and went to Washington in 1989, and I walked into the FHA Jim, which at the time was a $300 billion portfolio of mortgage insurance, about 80% of that was single family. So it's homes, homes that Americans buy, and it's sort of broad middle class/lower middle class. And I walked in and I said to the guy who was supposed to be the Controller, and I said I,d like to see our financial statements.

So he delivered to my office about 20 pounds of books all on the budget, and I read it twice, and I called him and said "Look, I've read this thing twice a couple of thousand pages and I can't find out how much we are making or losing in the single family fund." By law, the SHA commissioner has sole fiduciary responsibility to make sure that the $50 to $100 billion of mortgage insurance originated is self-sustainable. So the premiums are supposed to fund whatever the defaults and losses are. So I said, "I can't find out how much money we're making or losing. "Well that's because, he said, "It's not in the budget. And I said, "Well where is it? And he said, "Well the Accountants have it. And I said, "Well where can I find them? And he said, "They report to a different Assistant Secretary, you're not allowed to speak to them.

JP: (Laughter)

CA: So I was a little bit taken aback. And to make a long story short, I had raised a lot of money for the first Bush, and so I lobbied extensively, and what I got was a pair of cufflinks, and the accountants moved over to report to me, it took about 2 months. And so I could finally talk to the accountants, and they came in and I said, "How much are we making or losing in the single family fund? And they said, "We're losing $11 million a day.

JP: Wow.

CA: Exactly, so I said, "Well we have 10 regions and 80 field offices, where are we making or losing money? And they said, "We don't know that. And I said, "We mail out checks, we have zip codes, so it's a crash emergency go-find-out. And they came back 2 months later, and it turned out we were making money in 8 regions, and losing money in 2 regions.

And I was also on the oversight board through the Secretary of the RTC, which was the cleanup of the S&L's, and it was very much the same pattern. It turned out that the two regions 1 was Texas, which included Arkansas, so you had both the Bush's and the Clinton's in the same region, and the second was in Colorado. And what had happened, a significant part of what they called the S&L scandal and the HUD scandal was you literally had a financial fraud epidemic it was called, some people call it Iran-Contra, but after you work through it and learned all about it, we had a significant black budget financial operation financing black budget projects with financial fraud, whether it was through the S&L's or HUD. And all of that could happen because you did not have transparency.

So one of the things I got passed when I worked with a group of people in the Administration was a requirement that you produce audited financial statements for the 24 agencies of government. One of the things I,d like to do is go through a little bit about that and tie it back to the mortgage bubble.

And so we got in the first Bush administration a law required that the Federal government had to produce audited financial statements, which went into operation in 1995, they had about 4 years before they were required. And what happened when the first financial statements came out, was essentially most agencies could not comply, or produce audited financial statements. And as of today Jim, in 2004, the Federal government has yet to comply with the laws requiring audited statements for those 24 agencies, and the Treasury consolidated.

JP: And yet they always need more money, but they can't account for where the money that they have goes.

CA: Right. In fact, in 2001 we did an estimate, and it turned out that 85% of the first Bush administration budget [was] going to agencies that weren't in compliance with the audited financial statements rules and reliable financial systems.

Anyway, let me fast forward. In 1995, when HUD produced the first audited financial statements, they were published, and a fellow came to see me, and he said, "Look, there's been a terrible mistake. You don't understand, my family's been in business for many generations, and we've been tracking all the FHA mortgage insurance outstanding in the market since the FHA went into existence in 1934, and there's a terrible mistake the amount of outstanding FHA mortgage insurance in the markets is significantly more that is shown in these financial statements

Now when the fellow came to see me, Jim I thought he was crazy because what he was saying was that the U.S. Treasury and the FHA were engaged in significant securities fraud. In other words, what he was saying was that there was a significant amount of FHA & Ginnie Mae (or FHA related) securities outstanding than was shown in the financial statements.

Now, that's what I've come to believe is true. In 1995, I thought the guy was nuts. What has been evidenced over the last 7 years, is that there is a pattern that suggests there is very significant financial fraud in the mortgage markets. And let me tell you a little bit about why I believe that to be true.

After I left the Bush administration, the Secretary of Treasury asked me to go back in as a Governor of the Federal Reserve. But I discovered the Internet when I was in HUD, and decided that I wanted to create my own securities firm that specialized in financial software. And I was convinced there was a tremendous opportunity to finance neighborhoods and places, and securitize small businesses and small real estate income and finance in the equity markets. In other words, in a world of privatization, there's no reason why you can't finance a lot of municipal functions with equity.

So we wanted to do that, but a lot of it depended on creating the software tools to let you really see how the money works by place. And part of what I discovered when I was Assistant Secretary is, because there's no transparency in how the money works by place for government money, there's tremendous opportunities. There's neighborhoods where, for example, HUD is spending $250,000 per unit to rehab public housing, but you can buy a rehab single family in the same 3 or 4 block area for $50,000. So, to the extent that you can reengineer government money within a place, there's tremendous arbitrage opportunities if you combine that with financing places with equity. So we got very interested in doing that.

One of the things that happened was HUD later hired the [i.e. Catherine's software] company back on competitive contract, to help with $12 billion of defaulted mortgage auctions. HUD was the last of the RTC and the private financial institutions auctioned all their mortgages. But HUD was kind of the Johnny-come-lately, and so hadn't done that, and we helped them do that between 1994 and ,95 & ,96. They auctioned successfully about $10 billion of mortgages. What happened in that process was we were able to get the recovery rates, which had traditionally been about 35 cents on the dollar, beyond the industry standards which was about 75 cents on the dollar, we got it up to about 70-90 cents on the dollar.

And then in 1996, [we] were targeted by the only way I can describe it, have you ever heard of the movie "Enemy of the State?

JP: Oh sure.

CA: OK. Well I have someone who introduces me at conferences and says "This woman played Will Smith in real life. Do you remember the role that Will Smith played?

JP: Oh absolutely.

CA: OK. Well what happened was we were targeted in a process where we went through a period of having 18 audits and investigations, and 12 pieces of litigation, and through that whole sort of enforcement process, the honest people were pushed out of HUD. And they pushed my company, and a series of other honest contractors and government officials out. And what happened in the year following that is HUD failed to produce audited financial statements, and reported undocumentable adjustments of $59 billion, that was in fiscal 1999. And throughout government in fiscal 1999 thru 2000/2001, there were reports of not only failure to produced audited financial statements, but about $3.4 trillion of undocumentable adjustments. Very, very significant. That works out to about $11,000 per American resident.
JP: Where do all these losses get booked?

CA: What was happening [was that] annually, starting in 1995, the Federal government, the auditors underneath the auspices of each agency's Inspector General, would come forward and say, "This year we could or could not produce audited financial statements, ... and part of the reason is that we have undocumentable adjustments of $59 billion or whatever the number was. And so in this annual sweep up whereby the individual Inspector Generals would report into the Secretary of the Treasury and to the General Accounting Office (which is the auditor for Congress), it would come in through this annual sweep, and they would come in and say, "OK, we can't produce audited financial statements, and we have this much of undocumentable adjustments. At some point after the numbers got really crazy, they just decided after 9-11 to stop reporting them.

Now, when people say to me "What is $3.3 trillion of undocumentable adjustments?, let me give you an example. In fiscal 2000, the Department of Defense had $2.3 trillion in undocumentable adjustments. OK now, there's no way for us to know Jim, how much of that translates into cash. Cause $2.3 trillion is more than total taxes paid in a year by say tax payers in that year would have paid taxes of about $1.6 trillion. So, there's no way to know if $2.3 trillion translates into how much cash, or how much cash is missing.

What we do know is that under the laws of the Constitution, which say money cannot be spent unless it is appropriated. It is essentially a violation of the Constitution to do that, with one exception. And this is where the black budget comes up. There are provisions under the National Security Act of 1947 and the CIA Act of 1949 for military and military intelligence to crawl money from outside of different agencies, budgets, and spend it on non-transparent purposes. That's sometimes why it's called the "black budget.

And what I found out both as Assistant Secretary of Housing, and then what I found with my company and with the group of honest guys kicked out of HUD, was you had an agency whose legal purpose and political purpose was to help finance the mortgage markets, whose mortgage insurance programs were increasingly caught up in financing black budget operations. And this is very much tied to what's going on in the mortgage markets.

By any chance Jim, do you watch the Soprano TV show?

JP: I don't watch television, but I'm aware of some of the themes and things that go on in the program.

CA: Congratulations on that, because I don't watch TV either.

JP: (Laughter)

CA: Approximately 2 years ago, one of the things that developed on the Soprano TV show was that Tony Soprano's new big business was HUD financial fraud. And it's interesting that the financial fraud that Tony Soprano was doing was very much one of the predominant kinds of fraud in the HUD single family portfolio, but one of the one's used to finance the black budget, and one of the models that was very prevalent during Iran-Contra.

JP: You know, it's amazing Catherine as we've seen the U.S. develop more into a financial economy, I guess a sign of the times the mob moves into mortgage finance.

CA: Yeah, it's really simple. If you had a company Jim that was not being productive, the way that that would stop is that ultimately somebody would pull the financing on you. Your bank would pull your financing, the SEC would not let you finance in the stock market at some point. If you had a local or state government the credit agencies would pull the plug on you. But part of the problem we've had in this country is that we have a Federal Governmental apparatus that can be non-transparent, not follow the laws of how money is supposed to work, function outside the boundaries of the law, and yet continue to finance. The New York Fed and the Federal Reserve can continue to print currency, and continue to borrow a significant amount of money in the securities market outside the boundaries of the law.

And the problem we have as investors is you know, one of my favorite people, and he's been on your show before, is Bill Murphy and the guys at GATA. They've done a terrific job of documenting the manipulation in the gold markets. And for many years, I've tried to get Bill to understand that the manipulation in the gold markets that he's dealing with is the same people and same players that are manipulating the mortgage markets and the mortgage bubble. And they can do it, whether they do it in the gold market or the mortgage markets because they have access to a Governmental apparatus and financing apparatus which is non-accountable and not transparent.

JP: Catherine, this raises another subject in addition to your own experience, this weekend's edition of Barons did an article called "Swept Away it was how Fannie Mae keeps its losses from sullying the bottom line. And many investors may not be aware of the way the derivatives market works, but certain kind of investments, if they're held for the long-term, or carried on the balance sheet at cost (you never market them to market), other investments that are considered for trading purposes are marked to market, but there are certain accounting rules that allow not only what you saw at HUD, but organizations like Fannie to sweep losses onto the equity statement of their balance sheet.

CA: Right. I think the hardest thing about being an investor today is how do you get accurate information about the real values how do you understand what Fannie Mae or Freddie Mac's portfolio is really worth? How do you trust the books? And it's unnerving because the market you know, part of the thing that's keeping the stock prices where they are from what I see is tremendous manipulation within the markets. So we're looking at and tracking a political economy, not something that behaves according to traditional economics. Because you're not looking at honest books, and you're dealing in a situation where you know, if in 1 year the Federal Government is missing $2.3 trillion, where does that money go, and where is it being reinvested? That's a huge cash flow that can take the markets one way or another.

JP: Well, the other thing that you have too is even if you were to come from an accounting background like myself or yourself, you look at Fannie Mae's 10-K filings last year, they were 181 pages

CA & JP: (Laughter)

JP: I mean that's become a novel! I mean it's almost like you have to become Sherlock Holmes to really find out what it is that you're looking at, and even then you don't know what it is you have, because most

people don't realize that the bulk of the $200 trillion and that number just astounds me in terms of its size

CA: I know, it's kind of overwhelming. Let's make it simple. Because 5 years ago I decided that I was going to start traveling around the country by car to see what was really happening on the ground. Because I think you can always understand an economy by simply walking around and, you know, when I was on Wall Street I used to do due diligence by going to the company and just going up and down in the elevator and talking to the secretaries. Let's talk about what things look like on the ground in America, and what that means to the credit of a Freddie Mac or a Fannie Mae.

In the mid-90's Jim, we knew that a huge amount of jobs and income-generating activities in America were going to get outsourced to Asia. I mean, those decisions were made in the early 90's, and we knew that was going to happen. And I was a leader in Washington promoting a model whereby Americans paid down their debt, refinanced their communities and themselves on an equity basis, and redeveloped their skills. I mean, we knew the workforce was going to have to reengineer itself, and our pension funds and retirement arrangements were not going to be financially credible unless the workforce reinvented itself, and paid down its debt, you know, then.

So we knew then we had a problem. And what happened is was my team was kicked out of Washington, and a decision was made instead of reengineering folks, skills, or migrating them to equity and starting new businesses, a decision was made to float the economy of the biggest wave of debt that I can imagine. And what we've done is we've seen consumer debt skyrocket.

I have a member of my group, the Solari Action Network, who reconfigures the BEA's statistics once a quarter, and what his calculations show is very much what I see on the ground in communities throughout America Jim, which is the average American household has income of $32,000 per year, they have expenses of $37,000 per year, and they finance that $5,000 per year deficit with liquidating assets, working harder, or borrowing more. And of course as you know, and it's clear from your website, that the debt has gone not just the consumer debt has gone up-up-up, but the mortgage debt has gone up-up-up. And now, that load is just increasing every year, and meantime we are accelerating moving all the jobs and income abroad.

Now, when you move all your income abroad, and you leave your growing debt at home, it doesn't take long to understand what's going to happen to a Fannie Mae or Freddie Mac or a Ginnie Mae. At some point the growing debt has got to get serviced, and the question is how?

You can flood the country with immigrants who can buy up real estate that you finance at the bottom, but at some point something's got to give in the middle. I mean, if you shrink and collapse the middle class, they're going to default on their mortgages.

JP: You would think Catherine though, given the size of this Credit bubble that we're creating - not only in mortgages, in the bond market, the proliferation of hedge funds that literally move large amounts of money in and out of the market people would be paying more attention to debt. But I hear stories, you get these people on Wall Street that say we have no inflation, and the other side of that story is as long as the Fed raises interest rates at a measured pace, the stock market will continue to go up and consumers will continue to spend money. None of that makes sense to me.

CA: (Laughter). It makes no sense, unless you, let me give you an example. Last year we appropriated $87 billion for Iraq, but the administration has repeatedly says it can't explain where half of that money is going. It was interesting, one of the top reporters who followed the $3.3 trillion of missing money, I asked him the other day, I said, "Where do you think the $87 billion went to? And they said, "Well, we think it went to finance the states, deficits, because they were screaming about the states, deficits, and then all of a sudden it stopped.

We've had a complete implosion of internal financial controls in the governmental apparatus. $3.3 trillion missing from government is a financial coup-d'etat. You can keep a bubble going as long as you can finance it. And my guess is, again very much credited to Bill Murphy, what we're watching is a securities operation both with the Federal agencies, the mortgage agencies, and the U.S. Treasury, which are financing a political economy. The money that comes in from those debt operations are being used for other than their lawful purposes.
Here's the question: If we're manipulating the gold market, who's financing that? Who's financing the money that it costs to manipulate the gold market? Well, if $2.3 trillion is missing in a year, that's plenty enough to manipulate the gold market and a lot of other markets.

JP: You know, you would think though Catherine, and this is why I just wonder if we're coming up against some headwinds here, because certainly even though you can manipulate markets, you can bring interest rates down, you can keep asset prices inflated, but let's bring this down to Main street. You've driven around looking at these communities. If people are losing their jobs, if the jobs are going overseas, if they're downsized where they're not making the same kind of income they used to make let's say 5, 10, 15 years ago, they're adding more debt, even though that debt is at a lower interest rate, there comes a point where you can't get any more debt, nobody wants to give you another credit card, or the bank simply will not give you another home equity loan. I mean at some point you run up against a wall.

CA: Right, and that's where we are. I'm in Washington DC today, but I live in Hickory Valley Tennessee. In western Tennessee, in many of the communities, we're in a state of depression. I mean, the middle class is essentially being wiped out. And, you're absolutely right, without that fundamental productivity in the economy, there can be no economic gains. Now you can get some economic gains by moving in lots of immigrants. I mean, my impression Jim is that the borders are open, and America is experiencing very rapid immigration, and that's part of what's keeping the economy propped up. You can also keep activity going as long as you can finance the U.S. economy by borrowing more money, and printing more dollars, and pushing more dollars out. But we've reached a point where immigration and warfare are two economic activities after a bubble, but what we've been watching for years in this country is very significant falling productivity

JP: Explain the productivity miracle that Greenspan trumpets every time he's on top of Capitol Hill.

CA: We're running the economy to centralize wealth. We're using what I call a negative return on investment Governmental apparatus, both the budget and the credit and regulation, to centralize bank deposits, centralize purchases, centralize investments. We're centralizing political and economic power. And in the process of that, we're doing not what I call privatization privatization is when you transfer government assets to private investors at market price. "Piratization" is when you transfer government assets to private investors at significantly below market prices. So we're going through the process of using the Governmental apparatus to centralize economic power and wealth in a way that shrinks the total pie. And Greenspan's job is to put a pretty face on that. And the mortgage bubble 's job, and the U.S. Treasury securities fraud, is to finance that.

So it's good for Greenspan, it's good for the people he works for, it's terrible for the economy, and it's certainly terrible for people like you and me. And an honest finance guy is at a huge disadvantage in this environment

JP: It almost seems like we're turning the population in the U.S. into economic serfs, because you know, you take a two income family today, between what it costs to buy a house, own two cars and make payments, and send your kids to school, there's nothing left over.

CA: Well think about it this way. Another way to look at it is, say the average taxes per resident is about $5,000. And 85% of that, or say $4,700, is going to agencies who refuse to produce audited financial statements or reliable financial systems. And if you study the black budget, increasingly what you're seeing is that money is going to support private corporations and private banks who are using those resources to basically steal community assets out from under them. So you're basically financing an operation which is stealing all your political powers and economic wealth. It's a dream.

JP: Yeah, what this is, is a giant wealth transfer. And I remember, was is it Hayek's book "The Road to Serfdom

CA: [Catherine proceeds to expand on her alternative "open source model of community equity financing i.e. "securitizing small business income quoting Catherine, "I mean, why do we need a big corporation to come in and privatize our water? Why don't we just privatize our water, create a liquid security, and get the capital gains for ourselves? and again, "There are tremendous opportunities to reengineer this. Because whenever you have an economy that is this unproductive and this negative, if and where you can turn it around, the capital gains opportunities are absolutely enormous.]

JP: So, maybe this is a grassroots movement that begins at this kind of level Catherine, because certainly large corporations today are outsourcing our jobs. And it's really the small businessman whose local that is the creator of jobs.

CA: Absolutely. But right now, you know if you come to a Rotary International lunch , right now the local small business guys are playing with multiples of 1-5x, and they're getting clocked by the large corporations, because they can finance at multiples of 20 and 30x

JP: What has been the reception to this so far?

CA: Well, so far the reception has been tremendous, except from the Department of Justice and the Black Budget guys (laughter). We were prototyping 100 of these in 1998 Jim, and part of it was we had a software tool called Community Wizard, where you could dial in, say if you lived in San Diego, you could dial into Community Wizard and start to download all the data about how the money worked in San Diego. And what we didn't realize at the time, because we were just naïve, was that that was illuminating a lot of the black budget fraud that was in the Federal mortgage portfolios. And, for example, when I was Assistant Secretary, I,d get these inventories that said we had 10 buildings on this block and I,d go fly there and I,d go drive by the block, and there,d be no 10 buildings there.

So the problem was when Community Wizard would illuminate you know the databases on what the Federal Government was doing in the mortgage business, and citizens in their community could get those numbers and police them, and see the money contiguous to the world where they walked around and drove around, and the lies came to the fore. And now wherever I go, I get tremendous and positive response

You know, I'm a great believer that centralization is really nowhere near as productive as decentralization.

JP: Catherine, getting back to the other economy that's out there now, the Credit Bubble, Fannie Mae, Freddie Mac, all of this Credit financing, what's your view in terms of how this ends. I can't help but see

this whole thing crumbling, and maybe it's a private initiative that rises from the ashes such as the things that you're proposing that rebuild this economy, because certainly we have hollowed out this country in terms of what we've done to manufacturing. And you can't create wealth by just printing money and borrowing money
.

CA: Right. I think there are two scenarios. One is the bust, which is this thing keeps going as long as it can be financed by the U.S. governmental apparatus, and at some point, you know, as the Japanese and everyone else says we're not buying any more of this, we're not taking more dollars, the thing busts. And when it busts, what you're going to have is, it's going to be 1929 but worse. Because in 1929, there was a lot of social capital in America. It was a much kinder, gentler place I think than it is now. And you had many more people that knew how to grow their own food, or knew how to function. So one scenario is the bust.
The other scenario though Jim is the Orwellian scenario, which is we've reached a point, and I've written many articles about this, where rather than let financial assets adjust, the powers that be now have the control of the economy through the banking system and through the governmental apparatus, they can simply steal more money, keep financial assets, you know whether it's the stock market pumped up, the derivatives going, or the gold price manipulated down. And they simply liquidate all living things rather than let the economy go bust. In other words, you can adjust to your economy not by letting the value of the stock market or financial assets fall, but you can use warfare and organized crime to liquidate and steal whatever it is you need to keep the game going. And that's the kind of Orwellian scenario whereby you can basically keep this thing going, but in a way that leads to a highly totalitarian government and economy corporate feudalism.

JP: It almost sounds like we're heading in that direction in some sense in terms of the words that they use, the way the statistics are manipulated, "seasonally adjusted (laughter), I love those words. "Seasonally adjusted, what does that mean? Does that mean they're going to make the weather go away? I mean we,ll just have sunshine every day. When you take labor numbers where we have 7 or 8 thousand actual jobs created, and I call them hypothetical jobs, we turn them into 300,000 jobs. Or you have inflation statistics that take everything that goes up and then adjust it for quality adjustments so there's no price increases

CA: Right, those statistics have really reached a point where they're just almost worthless. My vision is citizen controlled and led transparency because at this point I just don't trust government to provide it. We're looking at an economy that is phenomenally manipulated and unfortunately Jim, digital technology has allowed a level of manipulation that people like you and I just couldn't envision.

But yeah, I think it's very hard for me to fathom how we can avoid the bust scenario. But in theory we can, as long as we continue to finance it, and part of that is rolling out alternative technology. I mean, we have the technology we need to provide alternatives to fossil fuel, but we haven't integrated them into the infrastructure. And as you know, it's one thing to have a technology, it's another to train a whole generation of people how to use it and how to integrate it into their businesses.

The scenarios that people discuss about peak oil are absolutely possible. Either one is possible, that we could have a bust, or sort of the Orwellian process but we simply destroy the middle class
.

JP: You almost wonder if that's indeed the way we're going, because certainly, you know I can't imagine Catherine the average person on Main street, let's say he picks up the newspaper in the morning and he's reading that a government report says there's no inflation. Or he turns on the TV and he sees a news clip of Alan Greenspan talking about wonderful productivity, miracles going on with assets, and then the poor guy goes to work, pulls into maybe the filling station on the way to fill up his tank of gas, and then maybe on weekends goes to the grocery store or maybe he has to visit the doctor, and he's seeing his costs go up in a way that isn't described anywhere in the financial media. Yeah, they may talk about rising gas prices, but I always here this word "benign inflation. What does that mean?

CA: Well it's funny, one of the things that was wonderful when I first moved to Hardeman County (Tennessee), I was driving around with one of the local farmers who was telling me essentially that they weren't efficient like the corporations. And, you know, we got into it a little bit more and what I discovered is that they didn't understand that they were having to compete on a basis where their revenues were greater than their overhead, and what they didn't realize was that local food franchise was laundering money and doing pump-and-dump stock market fraud, and so that they didn't have to generate revenue sufficient to cover their expenses. And the problem wasn't that the small farmer was "out of it, or not clever, it was the small farmer was honest, and was up against competition that was essentially practicing organized crime. And so I think part of the challenge is if you, re sort of a regular guy in America, you're in the middle of economic warfare, and how do you see the game? How do you see the game clearly? And how do you see the game in a way that you then have the opportunity to do something about it? Cause there's no sense in seeing the game if it just depresses you to no end. So how do you see the game, and then how do you organize? It's funny, when I started to do speaking tours about the financial fraud in Washington, somebody said to me "Do you think there is a conspiracy? And I said, "Look, don't worry about if there is a conspiracy, you need to start one.

JP: (Laughter)

CA: And the idea was, you know, we need to organize, if we're going to function in political markets and the political economy, and government is essentially going to be controlled by private players who are using that governmental apparatus to outfox us in the game of economic warfare, we need to organize to do the same. So we need to see that we're in a game of spiritual and economic warfare, and organize accordingly. So the average guy is going to have to figure out how he can, in fact, start whether it's locally or network globally. The pro-decentralization team, the honest guys, are going to have to start forming conspiracies to shift the resources back to us.

JP: Well it seems like one way to do that Catherine would be in a world that 's full of fiat currency floating around is to own something real and tangible, which is to own the gold and the silver.

CA: Absolutely. Absolutely. One of the great new vehicles in my life is I use Gold Money. I don't know if you've used any of this Digital Gold? But it 's quite marvelous. Have you had James Turk on your show yet?

JP: Yeah, we've had him, and James is coming back in the month of June, which is going to be devoted to gold and silver.

CA: Great. I'm a very satisfied Gold Money consumer. And I'm a great believer in the precious metals right now. We've certainly seen it manipulated down, and it's certainly a manipulated market, but I feel very confident that the price of gold has quite a floor under it, and I think it, s going to go up quite a lot in the next couple of years.

JP: (Comments on gold investment)

CAF Exactly, Exactly You know something Jim, I've been stunned because, remember I spoke at the National Press Club with Murphy about 2 years ago, GATA did a great press conference, and C-SPAN covered it. And I would never have believed that they could keep the manipulation going on this long. At the same time, I don't think that they can use the governmental apparatus to finance this game much longer, and I think precious metals have a tremendous market following. And so there's a fundamental economic support for precious metals that you can count on. So that's an investment that I believe in, and I agree with you absolutely, and they can't do this forever. At some point, land has value and gold has value.


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http://www.whereisthemoney.org

Articles:
The Myth of the Rule of Law by Catherine Austin Fitts November 2001, SRA
Quarterly, London
http://www.solari.com/gideon/articles/q301.pdf

Where is the Collateral? by Chris Sanders
http://www.whereisthemoney.org/S00223_collateral.htm

* Catherine Austin Fitts is the President of Solari, Inc, an investment advisor (in formation) created to invest in equity managed by a Solari, an investment databank and investment advisor for a place, and to promote Solari Circles and Solari Circle Investor Clubs, clubs focused on local investment. She is a former Assistant Secretary of Housing-Federal Housing Commissioner in the first Bush Administration, a former managing director and member of the board of Dillon, Read & Co, Inc. and President of The Hamilton Securities Group, Inc. Catherine provides risk management services to investors through Sanders Research Associates in London. She writes "The Real Deal column for Scoop Media New Zealand.
Website: http://www.solari.com E-mail: Catherine@solari.com

Copyright (c) Scoop Media

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Saturday, June 26, 2004

Here are some facts that for some reason did not make it into the final
cut of "Fahrenheit 9/11"


On 9-11, five men were arrested for suspicious behavior, cheering and
laughing while the WTC collapsed. In the van police found cash, multiple
passports, and maps with the World Trade Center highlighted.
Bomb-sniffing dogs indicated explosives residue were present in the truck. The
arrested men were Israelis, later identified by Pacific Radio as agents
of the Israeli intelligence service, the Mossad. According to Carl
Cameron's FOX News story on the Israeli spy ring, the US Government
classified evidence that linked the arrested Israeli spies to 9-11. The Mossad
agents were using a moving company, Urban Moving Systems, for a cover.
The owner of the company, Dominic Suter, abandoned his business after
9-11 and fled to Israel on 9-14.

The 9-11 scene was littered with passports using Saudi names, passports
which the FBI admitted just ten days later were high-quality fakes
using identities stolen from Arab men. We don't know who was on those
planes, only who we were supposed to THINK were on those planes. Why would
Saudi Arabia commit 9-11 and use phony passports pointing back to
themselves? If Saudi Arabia had done 9-11, it is safe to assume the phony
passports would have likely pointed to Israel. FBI Director Robert Mueller
has admitted in public that there is actually no evidence that proves
the named 9-11 hijackers were actually on the aircraft.

The warnings of the attack sent to Odigo in New York and Israel before
the 9-11 planes had even left the ground confirms beyond question that
Israeli-linked companies did receive advance warning. Why would Saudi
Arabia warn Israeli companies if they were behind 9-11?

It wasn't a Saudi-owned company in charge of security at all three of
the 9-11 airports.

If Saudi Arabia was a partner with Al Qaeda for 9-11, why is Al Qaeda
carrying out terror attacks against the Saudi Royal family now?

Speaking of "Al Qaeda", when Palestinian police arrested an Al Qaeda
cell, they discovered they were holding a group of Mossad agents.

A final point: The nation that helped the US Government stage a fake
terror event to launch wars of conquest in the Mideast would be in an
ideal position to blackmail the US Government with that very secret. So,
look back over the more than two years since 9-11 and find the nation
for whom the US Government just cannot seem to do enough, cannot give
enough money and weapons, cannot block enough UN Resolutions, the nation
for whom a long standing neutral foreign policy has been cast aside in
favor out total support for an expansionist agenda. Find the nation
whose leaders openly brag of their control of the US Government.

If Michael Moore didn't quite do all his homework with regard to who
may have been behind the 9-11 attack, that does not change the fact that
the people of the United States were lied to to trick them into wars.
And it is THAT message of the film which is the important one. But the
hard fact remains that Michael Moore did not get ALL of the story of
9-11. Not by a long shot. "Fahrenheit 9/11" is just the tip of the
iceberg.

Fahrenheit 9/11 is not an indictment of just George Bush. Fahrenheit
9/11 is not an indictment of just Republicans. Fahrenheit 9/11 is an
indictment of the entire US Government that had to know Bush was lying to
the American people to initiate as war and stood there smiling blandly
while he did it. Like Hitler, Bush could not do what he did without a
lot of cooperation by the entire government and the media.

Look at the voting records for the authorization for the use of force
in Iraq and in the draconian assaults on our freedoms. Both parties
voted those "Ayes". The rush to war and dictatorship was a bipartisan one,
worthy of bipartisan blame. Everyone is spinning Fahrenheit 9/11 to
attack their own favorite scapegoats, but the truth is there is more than
enough blame for the wars and the current state of the nation to share
all around.
=========================================
AMERICA SPEAKS OUT: COLLECTED ESSAYS FROM DISSIDENT WRITERS:
John H. Brand, Meria Heller, John Kaminski, Norman D. Livergood, Wayne
Madsen, Kurt Nimmo, Albert D. Pastore, Michael E. Salla, Sherman H.
Skolnick & John Stanton

ISBN 1-893302-42-3
Dandelion Books
$24.95

“To oppose the policies of a government does not mean you are against
the country or the people that the government supposedly represents,”
writes Michael Parenti in the preface to Kurt Nimmo’s book, Another Day
in the Empire. “Such opposition should be called what it really is:
democracy, or democratic dissent, or having a critical perspective about
what your leaders are doing. Either we have the right to democratic
dissent and criticism of these policies or we all lie down and let the
leader, the Fuhrer, do what is best, while we follow uncritically, and obey
whatever he commands. That's just what the Germans did with Hitler, and
look where it got them.”

AMERICA SPEAKS OUT is a collection of essays extracted from works
recently published by Dandelion Books:

Here are some facts that for some reason did not make it into the final
cut of "Fahrenheit 9/11
"

On 9-11, five men were arrested for suspicious behavior, cheering and
laughing while the WTC collapsed. In the van police found cash, multiple
passports, and maps with the World Trade Center highlighted.
Bomb-sniffing dogs indicated explosives residue were present in the truck. The
arrested men were Israelis, later identified by Pacific Radio as agents
of the Israeli intelligence service, the Mossad. According to Carl
Cameron's FOX News story on the Israeli spy ring, the US Government
classified evidence that linked the arrested Israeli spies to 9-11. The Mossad
agents were using a moving company, Urban Moving Systems, for a cover.
The owner of the company, Dominic Suter, abandoned his business after
9-11 and fled to Israel on 9-14.

The 9-11 scene was littered with passports using Saudi names, passports
which the FBI admitted just ten days later were high-quality fakes
using identities stolen from Arab men. We don't know who was on those
planes, only who we were supposed to THINK were on those planes. Why would
Saudi Arabia commit 9-11 and use phony passports pointing back to
themselves? If Saudi Arabia had done 9-11, it is safe to assume the phony
passports would have likely pointed to Israel. FBI Director Robert Mueller
has admitted in public that there is actually no evidence that proves
the named 9-11 hijackers were actually on the aircraft.

The warnings of the attack sent to Odigo in New York and Israel before
the 9-11 planes had even left the ground confirms beyond question that
Israeli-linked companies did receive advance warning. Why would Saudi
Arabia warn Israeli companies if they were behind 9-11?

It wasn't a Saudi-owned company in charge of security at all three of
the 9-11 airports.

If Saudi Arabia was a partner with Al Qaeda for 9-11, why is Al Qaeda
carrying out terror attacks against the Saudi Royal family now?

Speaking of "Al Qaeda", when Palestinian police arrested an Al Qaeda
cell, they discovered they were holding a group of Mossad agents.

A final point: The nation that helped the US Government stage a fake
terror event to launch wars of conquest in the Mideast would be in an
ideal position to blackmail the US Government with that very secret. So,
look back over the more than two years since 9-11 and find the nation
for whom the US Government just cannot seem to do enough, cannot give
enough money and weapons, cannot block enough UN Resolutions, the nation
for whom a long standing neutral foreign policy has been cast aside in
favor out total support for an expansionist agenda. Find the nation
whose leaders openly brag of their control of the US Government.

If Michael Moore didn't quite do all his homework with regard to who
may have been behind the 9-11 attack, that does not change the fact that
the people of the United States were lied to to trick them into wars.
And it is THAT message of the film which is the important one. But the
hard fact remains that Michael Moore did not get ALL of the story of
9-11. Not by a long shot. "Fahrenheit 9/11" is just the tip of the
iceberg.

Fahrenheit 9/11 is not an indictment of just George Bush. Fahrenheit
9/11 is not an indictment of just Republicans. Fahrenheit 9/11 is an
indictment of the entire US Government that had to know Bush was lying to
the American people to initiate as war and stood there smiling blandly
while he did it. Like Hitler, Bush could not do what he did without a
lot of cooperation by the entire government and the media.

Look at the voting records for the authorization for the use of force
in Iraq and in the draconian assaults on our freedoms. Both parties
voted those "Ayes". The rush to war and dictatorship was a bipartisan one,
worthy of bipartisan blame. Everyone is spinning Fahrenheit 9/11 to
attack their own favorite scapegoats, but the truth is there is more than
enough blame for the wars and the current state of the nation to share
all around.
=========================================
AMERICA SPEAKS OUT: COLLECTED ESSAYS FROM DISSIDENT WRITERS:
John H. Brand, Meria Heller, John Kaminski, Norman D. Livergood, Wayne
Madsen, Kurt Nimmo, Albert D. Pastore, Michael E. Salla, Sherman H.
Skolnick & John Stanton

ISBN 1-893302-42-3
Dandelion Books
$24.95

“To oppose the policies of a government does not mean you are against
the country or the people that the government supposedly represents,”
writes Michael Parenti in the preface to Kurt Nimmo’s book, Another Day
in the Empire. “Such opposition should be called what it really is:
democracy, or democratic dissent, or having a critical perspective about
what your leaders are doing. Either we have the right to democratic
dissent and criticism of these policies or we all lie down and let the
leader, the Fuhrer, do what is best, while we follow uncritically, and obey
whatever he commands. That's just what the Germans did with Hitler, and
look where it got them.”

AMERICA SPEAKS OUT is a collection of essays extracted from works
recently published by Dandelion Books:

Friday, June 25, 2004

Banning Movies

Thursday, June 24, 2004

MKaku.org | Theoretical Physicist Dr. Michio Kaku, science & technology

Wednesday, June 16, 2004

Just because your paranoid..doesn't mean that people aren't out to get you !


Electronic Harassment Information - Technical Surveillance Counter Measures (TSCM). Advanced Electronic Security Co.

tbroach.com Home Page

JetBlue or Jet Black? Holly Winter, JetBlue and the ADA

Columnists: Stan Bernard
My wild imigination...runs amok here!

bernard_stan@yahoo.com

Holly Winter: Living the Life of Holly: Home Page
Come and visit my favorite author and traveller Ms Holly Winter.
Holly Winter (pen name) lives in Denver Colorado and takes you along for the hilarious ride that is her daily life. Sometime sweet sometimes funny and always thought provoking Holly proves that a life worth living is worth examining..and a life examined can be hilarious. With her toungue firmly planted in cheek Ms Winters travel escapdes unroll at a breakneck pace..
Like Holly says "Life unfolds one column at a time.

Tuesday, June 15, 2004

In a heartbeat your whole world can change, we all know this but human nature makes us forget about it until once again those moments sneak up on us unaware. As I walked to the phone my head was spinning ,wondering if I had some how caused this break up?

I called Anne and we talked about her 15 year relationship with Ron, while we were talking.. her call waiting beeped in and when she came back to me she said 'that was Ron" So for a moment there she had two men who loved her hanging on the line. I never did ask her that evening if I had been the one that caused her to reconsider her life,part of me already knew the answer I just needed to hear her say it. As things turned out she never did tell me what effect our conversation had . If you ask me though I am pretty sure deep inside my words had some effect.

I worked through the dead of winter Christmas and New Years when my shifts ended instead of rushing home for my week off I threw my things in the back of my jeep and headed for the airport. In the middle of a rotten winter blizzard I boarded a flight to Vancouver Island and slept until the green grass of British Columbia was visible from my tiny window.

I rented a car and drove up and down the Island stopping at little bars and motels and enjoying the scenery but this was all done with part of me absent ..lost in a different landscape, wandering through the possibilities that only the unrequited could know or appreciate.

The last time I could ever remember feeling this way was when I was 12, I had a crush on my best friends sister Butch. Butch was 16 and lithe of figure with a shoulder length halo of dirty Blonde hair. She would occasionally deign to hang out with us as we tramped through the summer fields in search of tadpoles and snakes and wonder of wonder she hardly seemed like a girl at all.

One afternoon I had ridden my bike down the dusty highway to the farm, Allan was gone but Butch was home and we sat on the porch together sipping iced tea..the heat shimmered off the water of the pond and the air was alive with the buzzing thrum of crickets and beetles. As we sat there surrounded by natures calls of summer the barest hint of strawberry fragrance came wafting through the air. Butch was putting on lip gloss without saying a word she stood up stepped down from the porch and kissed me lightly on the lips and told me " you have to go now i want to tan for a while and i don't want any tan lines"

In that heartbeat my world changed I felt like a rider on merry go round, colors sparkling and twisting, too many sensations and thoughts crowded my mind all vying for attention at once. For the briefest fraction the warm feeling of her lips and the scent of strawberry infused my whole being and for a moment time stopped.

Like a bubble in a piece of amber that moment is trapped inside of me, held in impossible clarity so that even today the smell of strawberry lip gloss is a time machine dragging me back in an instant to 1974.
With a flip of her hair Butch slipped past me into the house , the sound of her sandals echoing on the stairs....

I was still sitting there when she came back down stairs in a tiny green cotton bikini.. , a gangly 12 year old boy perched on porch with a stunned look on his face.." See ya she said" Moving in a daze I walked to my bike and the part of me capable of any action began to pedal.

I was a half a mile away before I realized what she had said about no tan lines I was half a mile and world away before the the reality of that comment sunk in to my still reeling mind..She's going to take her top off!
This along with her casual kiss was entirely too much for my little heart to take, for the rest of the summer whenever Allan and I hung out Butch became very aloof and distant as only a sixteen year old girl can be.

The flame in my heart burned brighter than ever and I 'm sure I made a fool of myself in a million ways, picking her flowers and leaving her notes.
Wandering around on the island was like pedaling home that day I was only partly in the present caught in tumbling cascade of future possibilities. Now years later I wonder what would have happened if I had turned around and looked.. watched her lying topless in the sun..

If it had happened a year later I probably would have but as it is this memory of moments, the awakening of emotion had remained untouched. Anne changed all of that and at 40 years old suddenly I was that 12 year old once again.

The break-up of any relationship is never an easy thing it rarely occurs as a mutual event. In spite of what you all may think I didn’t leave Sandy so I could be with Anne, my own problems and dissatisfaction were in evidence long before we had even met. Ron’s cousin Julie and I had met two winters earlier at a fly-in location for CNRL. Stuck in the bush for 14 days at a time with no other women around Julie’s petite frame and talkative energy made her a favorite of some crew members, and engineers.*others hated the distraction*

Julie was our onsite medical attendant on call 24 hours a day 7 days a week even though the rig crews would rotate in and out by plane weather permitting, Julie and the mangers had to stay. At some wells we drilled the camp where we stayed was close enough that she could sneak in and have supper with our crews if she liked.

Her sense of humor and her energy made her a beacon in the cafeteria, and where ever she sat was usually the liveliest and loudest table. I was asked to bring her breakfast one morning as we were too far away for her to travel. When I dropped it off she was still in bed deeply burrowed into a mummy sleeping bag with a Mexican blanket over top. Good morning I said Eventually stretching and moaning like a cat Julie managed to mumble "Oh thank you so much for breakfast, that is so wonderful of you. She rotated in her sleeping bag a shaggy mass of blonde hair and reached out an arm and grabbed her glasses. So tell me she said Mr Motorman what’s going on? We should be pulling out of the hole to log and then it will be run in and wait on orders. I told her "Oh goody she said. " I can hang out and visit with you guys a bit then" I looked around at the tiny trailer that was her home for over 87 days straight so far and it depressed me. how could she stand it? Julie had the walls covered with charcoals, watercolors and pastels of the rig and scenery from the point of view of her tiny office window. If we were slow she could cross-country ski or snow shoe. One scandalous day she sat topless on her shack until the engineer caught on.. poor Old Dan he was never sure quite what to make of Julie. She was an anomaly a blithe and gracious spirit in a world of steel and iron. The simplest things entranced and amazed her and in a testosterone soaked environment this graciousness and appreciativeness served as a reminder or counterpoint to " get the fucking thing done and hurry up" oilpatch attitude. Some people actually disliked her because she was always so happy, her happiness seemed to annoy them but not me. She was the hippy chick in the funny pointed hat, with the owl type glasses. She was so smart that the average guy might miss it, but ask her anything about a directional tool , or mud and she knew. She had been on more wells with nothing to do except learn than a lot of the roughnecks. We got along fine and took lots of ribbing because of it

Hey I said do you want to borrow my laptop? It has about a dozen movies on it and a ton of games?

Julie squealed " are you kidding?" When the crew truck went back for lunch I got the leasehand to sneak into my room in camp and pick up my laptop for Julie.

We were together for nearly five month that winter and with really good crews and good luck Julie never had to put in a stitch or apply a bandage. The 12 hour shift doesn’t leave a lot of time for socializing but every day at shift change Julie and I would hook up and trade stories while the other guys got changed.

When spring break up finally happened we were a long way from a frozen river that had to be crossed after dark because it was too soft in the daytime. Julie and I wound up waiting while the rig crossed the Ice Bridge and on the same ride in to the airport for once we were able to chat and relax with no pressure to be anywhere or do anything. Julie lived in British Columbia she was married with two children a girl 11 Raylee and a boy 13 Ryley. We had 48 hours before our flights so we hung out and played pool and just had a blast… the cafeteria that had served 1200 men now held only our crew and the staff.. we were the last drilling rig in North Helmet that spring.

There is a closeness that people who do this work share, the isolation and the long hours and the elements can drive the weak to quit and look for a ride to the nearest aircraft.. more than once that winter I’d watched that happen… More than once I ‘d wanted to go myself!

Julie and I kept in touch that summer writing via e-mail and sometimes doing video chats on the web. We were not tasked out together the following winter however she went to BC again and I wound up bouncing around in Alberta. We still kept in touch and wrote regularly and she promised to come and visit on her way home.

When our next spring break-up came I was back in Edmonton enjoying the hell out of doing nothing when my phone rang… It was Julie she was in town and she wanted to come and visit with her niece Lynette… Sandy was going to her sisters and was not going to be around when Julie came over so after giving her directions to our place I got ready to go out. We went for lunch at a little Chinese place and I met Anne’s daughter Lynette for the first time.. She was so very pretty flawless skin and laughing eyes flashing a tummy ring as kids these days do

Julie and Lynette headed out to do some shopping after lunch, we agreed to meet up later and hang out for bit. Things being what they were we didn’t get together until the day after and after getting directions to Rons farm, my dyslexic friends had me driving down country roads looking for the white house…

Eventually I got it all figured out and as I pulled into the yard and saw Julie’s new truck her Silver Bullet

The significance of this moment escaped me..looking back I was oblivious unaware and unprepared.

I have never been made to feel as welcome or felt so relaxed in a lot of ways it was like we had met before.

Now with so much time spent there, the familiarity of the porch and the chillshack, are like old friends

Memories of nights spent huddled in the dark. Smoking on the porch or sneaking puffs in the basement by the fireplace.

We cant have days or moments back except in memory and if we spend too long thinking about what was or what might have been, 'we rob ourselves of the future. Eventually you learn to "dance with what is" you make deals with yourself and try and move on. Like the song says "that’s what I’m doing these days"

Spychips: RFID Privacy Website

The RFID Battle starts here!

http://www.nocards.org/
Ever wonder what Safeway does with your loyalty card information at the check out?
They collect your information and give you a discount right? But thats not all and you may be surprised where your data winds up.. Consumer profiling is becoming a vast new tool for credit grantors, banks and insurance companies, all are lining up for access to real time computer data. Buy an insurance policy for a non smokers rates...they check your monthly grocery bill for tobacco related items...Bingo..your rates take a big leap upwards.
RFID has the ability and the stated goal to provide a unique number for every single item on the planet.. sheets of paper in a pad, cans of coke in a case etc etc etc.
Imagine you receive a ticket in the mail for littering..because a can of coke was found from a case you purchased .
The potential for complete and total surveillance of a person remotely via RFID readers and tagged products is very close to being a reality.. WALMART the worlds largest retailer is pushing for RFID adoption by all of its suppliers by 2006.
Whether or not you belive in God the passage in the Bible in Revelations that refers to the 'Mark of the beast' Is so eerily echoed by todays technoligal developments..that the rational mind just has to wonder..Forewarned is forarmed..
Stan Bernard"

CASPIAN - Consumers Against Supermarket Privacy Invasion and Numbering

How did the Bible predict the advent of the mark of the beast 2000years ago? Today the evolution of technology has the ability to do unprecendented things..the ability to track products & people from cradle to grave.
The skeptics will poo poo, and the government will downplay but very little imagination is required to forsee a future with very little privacy left. The people who would avoid the mark and the rfid which is its likely pre cursor will become outlaws. 1984 was warning for us all..This website updates the clarion call..if you value your freedom and your childrens privacy.. read this website..and pass the links on.

Wired 11.08: The Super Power IssueThe Antigravity Underground

Wired 11.08: The Super Power IssueBeing Invisible

Monday, June 14, 2004

A FLY ON THE WALL

A FLY ON THE WALL

Obsessive

US Confirms Boeing 727 Missing

Ten US Navy Carriers Now At Sea - Only Two In Port USS Carl Vinson Has Gone Out

93% Of All US Navy Ships Said At Sea - Why?