Catherine Fitts

I am reposting this from Catherine Austin Fitts blog, an economist and speaker i admire very much. I think its a nice christmas gift to everyone to subscribe to her newsletter.


2008: Looking Back


The global financial bubble burst in 2008 -- and that's a good thing.It means that the bubble economy will stop draining the real economy.Instead of capital being invested in fraudulent mortgage securities,derivatives portfolios, and companies running black-box ponzi schemes,perhaps it can be used to finance real solutions to the problemsbefore us. Now we can talk about the real world and real issues: thereare many worth addressing.

The big question of 2008 is "Where is the money?" It just keepsdisappearing. There was $4 trillion plus that disappeared from the USgovernment between 1998 and 2002 along with the pump-and-dump of theInternet and telecom stocks and Enron. Since then and into 2008, fundskeep disappearing into the Afghanistan and Iraq campaigns. Now we have$700 billion in bailouts and $7 trillion plus in loans by the Fed, notto mention the $5 trillion in mortgage market liabilities assumed bythe Federal government with the passage of the Housing and EconomicRecovery Act of 2008 <http://solari.com/archive/housing_bill/>. Thefraud in the US mortgage bubble was clearly enormous. But, where didall the money go?

The global financial meltdown that some market pundits predictedhasn't happened. Instead, the "Slow Burn<http://solari.com/blog/?p=818>" continues. But, investor losses havebeen significant. The result has been an outbreak of healthy distrustwhich has resulted in the freezing up of the global financial system.Because they are not leveraged, pension fund losses have beenrelatively quiet. Look for reports regarding pension fund performanceto have a profound impact in 2009.

What this all adds up to is financial coup d'etat. Trillions arebeing stolen through the financial system in a manner that centralizeswealth, leaving governments bankrupt but with bigger budgets to assertcontrol over the wider population. Not surprisingly, this leaveseconomies ever more dependent on defense and enforcement spending asthe infrastructure of central control grows.

One of the biggest stories in 2008 was the continuing censorship ofstories about manipulations harmful to our health, includingchemtrails, the efforts to control the food and seed supply, and theongoing suppression of energy technology. Watch for a continuedfailure of traditional media in 2009 ... and a continuing loss ofmarket share due to public disgust at such censorship. Go, Wikileaks!<http://wikileaks.org/>

The Good News

One of the few good investment categories in 2008 was building localself-sufficiency. From the success of the Financial Permacultureconference in Hohenwald, Tennessee to the rapid spread of TransitionTowns around the world, to the spreading of participatory budgetingfrom Latin America, efforts by local communities to re-localize arevery encouraging. The logical response to uneconomic centralization isto look for ways to decentralize. Despite all the difficulties in theeconomy, entrepreneurs doing natural home building, farmers markets,starting farms, installing solar energy and weatherizing homes enjoyeda market moving their way. These efforts will continue to grow wellbeyond any shakeout.

In this week's Solari Report<http://solari.com/store/the_solari_report/> (Friday, December 26),I'm doing a year-end "wrap-up" looking back at events in 2008 anddiscussing what they mean to our future.

Here's an outline: -
The Slow Burn-
Bailouts: Where's the Money?-
Financial Coup d'etat-
The Crash in Commodities: Temporary or Permanent?-
The Freezing Up of the Global Financial System-
Election 2008: The First Billion Dollar Candidate-
Russia, China, and the Middle East Rising-
Pension Fund Time Bomb-
The Shake-

Out Moves into 2009 You can learn more about The Solari Report and subscribe here<http://solari.com/store/the_solari_report/>. I hope you'll join us.