132: Digital Currencies & Control: Navigating Privacy in a Cashless World & Building Resilient Financial Strategies with Catherine Austin Fitts Part 2

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It's possible that even if you have to have CBDC in some form that you're not destroying the banking system if you do it the way China is doing it. Now. You have to remember China only recently introduced their banking system and it seems they were not willing to really give it up. They have already cbdc, it's still a pilot project, but it's introduced, you know, among millions of people already. But it was introduced on purpose in such a way that it would not harm the banking system and therefore is a more truthful sort of update of the old paper money. But of course it still has the control aspects. At least it's not killing the banking system. The way they do this is by requiring you to have a bank account in order to get cbdc. So it's not a direct account at the central bank, it's only through your bank that you can get it. You see how simple that is and of course could be done over here. But they're not discussing it in say the ECB is not discussing it because you see their agenda is to get rid of banks. But this alternative exists. But then of course the key problem is this control aspect which at the moment they haven't stepped up in China, but that can be introduced anytime. And that of course is a concern. Also, they never talk about the nature of the cbdc. What is it actually going to look like? They never talk about that. But I heard one European central banker tell me what it's going to look like. He saw it, he was invited to one of the old central banks in Europe that are very much promoting this and they showed him and you know, he's, he's a top, you know, executive director of another central bank in Europe and there's no reason to believe that he was telling me a story and he was around this, this large and would be implanted under your skin. So that is the plan. And of course that has other implications on top of what we've mentioned, on top of the control aspects, because that actually enters your, your body, my view, violates, violates human dignity and can be then used for, in terms of functionality beyond the monetary and economic transaction purposes. So highly dangerous and definitely something we have to oppose. And so using cash is one of the things we can do to make sure that it will be, the hurdle will be higher for the central planners to introduce the cbdc.

Or we had a telecommunications executive at the World Economic forum, say by 20, I think it was 20, 26, somewhere in there, everybody's going to have a chip in their hand. And we know that some of the Scandinavian countries have absolutely promoted this with employers promoting it. The last one is Neel Kashkari, who's president of the Minneapolis Fed. So the Federal reserve system has 12 banks of which the Minneapolis is one of them. So this is one of the 12 bank presidents telling you what he thinks of CBDC. So let's watch.

Keep asking anybody, anybody at the Fed or outside of the Fed to explain to me what problem this is solving. I can send anybody in this room $5 with Venmo right now. Right. No, seriously. So what is it that a CBDC could do that Venmo can't do? And all I get is a bunch of hand waving. I get a bunch. Well, maybe it's better for financial inclusion. Maybe it's better for cross border remittances. Maybe. Is there any evidence that it is? And they say, well, what about China? China is doing it. Well, I can see why China would do it. If they want to monitor every one of your transactions, you could do that with the central bank digital currency. You can't do that with Venmo. If you want to impose negative interest rates, you could do that with the central bank digital currency. You can't do that with Venmo. And if you want to directly tax customer accounts, you could do that with the central bank digital currency. You can't do that with Venmo. But I get why China would be interested. Why would the American people before that?

I'm curious as to the answer to that question. What's the case he made, I wonder?

Well, there, there is no the, the reason you would do it. If you're the bankers and you basically want to use a social credit system and financial control to institute the entire fiscal side of the house, it gives you the ability to tax without representation and it gives you the ability to institute all laws and regulations through a Complex rule system, software and AI. So literally you don't need a fiscal side of the House, you don't need representation. You just institute complete control and you can create and make all the rules and enforce them centrally and literally make the fiscal side of the House go away or make it, if you leave it in place, it's simply theater.

Right.

So Katherine, what do we do? Last time I interviewed G. Edward Griffin, he said, you just cannot let this happen. The cbdc.

He's absolutely right. So the number one risk to your equity right now as a real estate investor is political risk. Okay. What it means is, you know, when I was Assistant Secretary of Housing, I said, where are all the honest people? Where they were busy doing their work. It was always the dishonest who were coming to lobby me for a freebie. Right? So the honest people have to get engaged. Now what you find is, is particularly in the good jurisdictions and you have legislative leaders at the state level and you have community bankers. So banking leaders at the community banking or credit union level who understand what's coming and want to stop it. And it's absolutely essential that you find them and you support them. So our Hero of the of the Year. Last year on the Soleil Report, we have a Hero of the Week. And a Hero of the year was Senator Frank Nicely and Representative Bud Halsey. And our team made a command decision at, at the end of 2023 that we were going to spend an extraordinary amount of our time and money this year helping state legislators, finding the Frank Nicely and Bud Halseys of every state and doing everything we could to support them. We'll be publishing in our next hard copy. It's basically on how the states can stop the coup and reverse it. And you have extraordinary leadership at a state and local level and under the Constitution. They have extraordinary powers under the Constitution to stop it. If they can get 5 to 10% of the business leadership in their constituency to see the problem, take responsibility for the problem and support them. So this is going to take a goalition of business leaders and political leaders at the state and local level. Now there's some very good congressmen and senators, not a lot, but a handful. And even though you know you want to throw up your hands at the federal government, they're making an enormous difference. So Senator Ron Johnson has just put together a letter of 49 Republican senators saying, no way, Jose to the WHO and Thomas Massie is now trying to get through in the Farm Bill, the Prim act that will allow independent farmers and ranchers to Slaughter at, you know, sort of in local levels. He's put together an interstate raw milk bill, lots of other bills to make independent business and independent income grow. You have got to say, okay, I'm going to budget 10% of my time this year to networking and finding the freedom fighters at the state and local and if I have one, the federal level and doing everything I can do to turn the ship. Now let me tell you what it's going to take to turn the ship. And again, there's extraordinary amounts of, of information at Solari. We have a wonderful memo. What is financial transaction freedom? What is it? What threatens it? How do I stop it? We have another article called I want to stop CBDCs. What can I Do? So there are many, many things you can do. But right now, if you look at our state money, our local money and our personal money, we're financing the other team, the people who are centralized in control, we're financing them. We're sending our money into their banks. We're putting our investments into their situation. If you're a good real estate investor, luckily you've diversified some money out of that machine at least. But for example, if you look at most state houses, they're shipping all their bank deposits to New York where the banks who are engineering this get the benefit of those deposits. So we're financing this and this requires us to start shifting the money. We're going to have to start decentralizing the control of our money. 150 years ago, every family controlled their investments. Now we've outsourced all that control of our assets, family assets or family business assets, up into highly centralized institutions and organizations.

I want to share an example that you gave many years ago, maybe on my show or maybe I heard it somewhere else, but it was where you were at a luncheon with some different people and you were overhearing the conversations and one person was talking about how they borrowed money to do one thing and another person was talking about how they deposited or lent money or invested. And you realized that basically what we were doing is letting Wall Street Intermediate these transactions that could have been disintermediated between the parties directly. And I thought it was very interesting. They take a huge handling fee off the top and exert an awful lot of well over us when they do this.

In that, in that precise examp example, it was a 2000 basis point arbitrage. Wow. So one person was putting their money in a local bank cd who had as a correspondent bank. So the money was going up to one of The New York Fed member banks. And they were getting approximately 4%. No, they were getting, at that time, 2%. The next person had stock in that same New York Fed member bank. And in fact, they had been losing money. They'd been getting a dividend, but with capital losses, they were down. And then the third person was borrowing on a credit card from that bank and paying over 24% in interest rate. There was, there was a 2000 basis point spread between these three personal friends.

Yeah. So how do we, how do we solve that? I mean, you know, a lot of the tech platforms are disintermediating these types of transactions, which is great. And of course cryptocurrency, which, you know, I'd love to hear what you say about Bitcoin and then inflation in general and what our future looks like vis a vis inflation. But talk about some of those.

Okay, so. So the first thing I want to say is my concern for the next 12 months, if you're a real estate investor, is there is going to be an effort to consolidate the banks. What we saw in California with SVB was just a little prototype of what could potentially come. And so you need to make sure if you are depending on banks for your transactions. One, you're banking at a bank, ideally a good community bank, that where you know the decision makers and you know, they are very well governed and well capitalized. Okay. That's number one. And number two, you want to make sure that they know how to insulate themselves from an engineered bank run. Okay. And what I would recommend is that you have at least two banks and, and probably a brokerage account. So if for some reason you need to jump out of a bank fast, you have the wherewithal to do it. You know, at the moment you have to jump. You already have a relationship and a place to jump to, and you can do it like that. You don't have to go open an account. You know, if you look at what happened, svp, the people had to go open an account and get their paperwork and get, you know, a lot of them were stuck. They couldn't move fast enough. Okay, so the first thing you need to do is you need to look at your banking relationships. I don't want to bank with the criminals. I think it's dangerous. I want to bank with.

Who are you going to bank with then? For all criminals.

Are you kidding? No, no, no. I have the world's most wonderful bank. I'm not trying to promote because it's run by my cousins. So I'm right Now I'm in Pennsylvania and my mother was a Philadelphia Quaker and I have cousins who've been in the banking business for four generations. They're absolutely fantastic. Their bank is ridiculously overcapitalized, but they are people who've been running the business day to day for decades. They know every penny. You know, it's very conservatively managed.

Okay, okay, so you've got a sort of bank. Yeah, okay.

It's a great bank. But you know something, Jason? There are lots of banks like that. Okay, so, so find a good local bank. But I can pick up a phone and call a decision maker at my bank anytime I need one. And my bank knows me. So I'll give you an example. I was in Italy and I was there to see Beethoven in the amphitheater. I was in Verano and I'm walking down the street and it's national bank of Melbourne, my bank. The phone rings and I answ answer the phone and they say, we don't know who just charged $500 at Paris Disney World, but we're pretty sure it's not you. And I said, you're right. Shut down the card. They caught it like that. And it took, you know, it was lickety split to get a new card. I didn't have to hang on the phone for five hours. And I can tell you scores and scores of stories. So. So you want a bank where you know people, they know you. You have a relationship and you have choice, you have more than one. Okay. And so having it. We have a wonderful Solari report on how to build a successful relationship at a great bank. It's a four part series, so just make sure you do that. Okay. The other thing you can do is there are enormous number of local investment opportunities. Real estate, yes, but they're business opportunities. There are community development banks, they're food co ops, they're farmers, there's farmland and land leasing there. There are many ways you can take steps to invest wisely that disintermediate you out of central control. You do not have to go to treasury direct and give money directly to the Treasury. That's going to disappear out the back door. Right. Anybody who's a successful real estate investor knows you want to know where your money is and why it's there. And then of course I love precious metals, but to me precious metals is simply central bank insurance, you know, and it will help protect you against inflation. And now that the states are getting more and more interested in using precious metals in a variety of ways, it's Going to, it's going to put pressure to support the market and the price. And then if you look the best kinds of investments, I think if you look at your infrastructure is what can you do to make your household and your physical infrastructure more resilient, both in your home and your property. So anything you can do to permanently invest that lowers the cost of energy, protects you against inflation. I'm always telling the story of the client I had who was very upset about the yield on her stock portfolio going down and her water bill going up. And she would complain chronically about it, said this is simple, sell some stocks and build a well. She was in a rural area, she could do it. So anything you can do to decentralize and disintermediate big institutions out of your balance sheet and financial statements is worth considering. And of course one is, even though I love what leverage can do, particularly in real estate investment, you need to be prepared to guide your way through war scenarios. So if you carry debt, just make sure you have a plan in a bank consolidation and a war scenario that you can work your way through without losing a lot of equity. If you lose a property, and it's.

Always, it always seems like it's about a two year cycle you need to be prepared for.

Right.

Because that's when so many people let go and they, they lose money on any asset class, not just real estate. If you can make it through a tough two year time period, you're probably going to be pretty good. And then the central planners of will do what they do, which is loosen the credit, loosen the money supply. Usually that's all pretty much always their reaction to things.

So to me, one of the best ways to invest to make it through a two year period is to do everything you can to lower your costs of your infrastructure. That's why I'm saying if you can institute energy efficiencies or energy systems that dramatically reduce your need for cash to buy energy from outside, you know, that protects you.

It's the same rule of any business. The killer of any business is fixed cost overhead. Right?

Right.

When you can scale your overhead and make it bigger and smaller, depending on what, what cycle you're in, then you're okay, Right?

Right.

I mean my businesses could almost never fail. I mean, I never want to say never, but because they're very lean and they can scale up, they can scale down quickly. But in the old days when I had more traditional brick and mortar businesses and had multiple offices that were very expensive to was a different story. You know that was a much more risky proposition. But Catherine, I know you believe that inflation is our future and feel free to comment on that if you like. I'm dying to know what you think of bitcoin because I've never heard you talk about it.

So here's the thing. I'm the kind of person who loves private currencies. At the same time, bitcoin in many respects is a prototype to get us to go to an all digital system.

Yeah. And maybe, maybe Satoshi is, is the government or the CIA or you know, the imf. We don't know.

Well, but the perfect world is a world where we have analog. We have a balance of analog and digital. And, and in both analog and digital, we're free to do our own currencies if we want to. That's the perfect world.

Right.

We don't live in that world. And the reality is, if you look at how bitcoin has been used and can be used, I think it can be used in very nefarious ways. The other thing is, I think it can be shut down and controlled very quickly. So the idea that the leadership of the financial system can exercise, you know, fantastic control quickly of bitcoin, I think is a pipe dream.

Yeah. Now that said, you know, two, a couple thousand nodes in the world and you could easily see police forces around the world coordinating and raiding all those node locations. It's not as invincible as people think. And what I've always said is that, look, the main product of any government or central bank and you know, of course they work together, is their currency, that is their product. And just like any business, you know, no business loves competition. Right. They don't want to give up control of their, their main product. They want that to be the thing.

But I, I think they've used legal.

Tender laws, you know, I think they've.

Used bitcoin very cleverly. I mean, bitcoin has served a variety of different functions for the leadership, one of which is to keep people out of gold and silver. So while the central bankers are accumulating more and more gold and silver, they've been pulling retail into crypto. It's a very clever strategy. And they've also been able to pump and dump crypto in a way that helps get an entire generation of developers helping them figure out how to do essentially an all digital financial system. You know, so they've got these guys kind of working for them for free.

Right.

And, and they've also been able to pump and dump it in a way that gives them A lot of control of that world. So unfortunately, to me, bitcoin is a. Is a prototype, and it's one I empathize with because I love private currencies.

Yeah, yeah. Now, okay, so inflation in general. Tell us about your opinion of our future, inflation wise, or. I mean, I don't think you believe deflation is coming, but, you know, so.

Deflation could come if they are successful in starting World War iii. And there is a concerted effort right now through NATO and the Article 5 process to start World War III. And just like pandemics, you know, they're developing a scenario for the next pandemic, and that is a shock. So the way you do takings historically is you shock an economy, and then you take. You shock and you take. You know, and there are scores of different shocks. And sometimes I have a fantasy of the different cartels, you know, planning out different ops and trying to persuade Mr. Global to choose their op. But, you know, we could be in for another pandemic and using the WHO surveillance network and another pandemic to shock with health. But the shock could be World War iii, whether you turn the Middle east into a. Into World War iii, or you turn Ukraine or both. So there are a series of engineered shock that are highly deflationary. So the monetary authorities, so the central banks inject massive money, but targeted essentially to the insiders. And then you shock the outsiders in a way that makes it really attractive for the insiders to take that money and buy assets cheap or take them. So let me give you an example. I inject money. Meantime, I announce a new pandemic. Bird flu, you know, and the WHO surveillance network identifies your neighborhood as having a pathogen. We quarantine your neighborhood. We shut down all the businesses. I've got a world of cash, and I can come in and buy assets cheap, right? But that monetary inflation has been offset by the deflation caused by the shock. Because when I shut all those businesses and economic activity down in quarantine, I've got a deflation to offset my inflation. Does it make sense?

Yeah. Yep. I know there's maybe a temporary deflation shock in the event of, you know, World War III or any kind of scenario. Of course, Covid should have been deflationary had they not, you know, done.

Oh, but it was you. You shocked Main Street. You injected money into Wall Street. Very inflationary, but you shocked Main street, and that kept the inflation down while that money was moving in. And it's very interesting because I remember Larry Summers, who used to be a governor, not Larry Summers, it was one of the former Fed governors, gave a speech to one of the Swiss invest investment firms I used to work with, and basically, you know, said, okay, they just injected this 5 trillion down the road. You know, a couple of years from now, there's going to be massive inflation. So we knew, you know, we knew it was coming, but that shutting down Main street, you know, was a temporary deflation that offset it for some period of time.

Yeah. Okay. Catherine, anything. I haven't asked you anything you just want to say as we wrap up here.

So the most important thing to your investors is who can you count on? Who can you count on locally? Who can you count on in your state? Hopefully locally, you've got a great sheriff. If you don't have a great sheriff, you better get one.

Because remember, and probably no one listening is paying attention to who their sheriff is.

You better go figure out who your sheriff is. Because what we saw during the pandemic, sheriffs who insisted on constitutional protections saved the businesses in their jurisdiction a fortune. You know, businesses were able to stay open and thrive. You want to have a relationship with your sheriff before you need it. Okay. You know, and. And if somebody tries to say there's a pathogen in your neighborhood, they want to quarantine and shut down your businesses, that's when you need a sheriff you can count on. There are freedom fighters at almost every state legislature and every local legislator. You want to know who they are, you want to support them, because we've got a lot of dirty money moving in right now into the state primaries, trying to kick the freedom fight out. And you care. You want to have great relationship with your banks, and you want to have choice. If you have to jump out of one bank into another bank quickly, you want to be prepared to do that. And as you said, two years of cash reserves, whether it's, you know, NATO trying to start a land war with an Article 5 in Europe or the Gaza situation blowing up, even, you know, much worse than it is, you want to be able. If there's. Whether the shock is a pandemic or the shock is a war, you want to be able to work it through without getting yourself in a corner, getting squeezed. So that's the kind of resiliency you want. Anything you can do to invest in permanently bringing down your overhead, get it done as soon as you can.

Katherine Austin Fitz, thank you so much. We really appreciate having you on. And let's do this more often, okay?

Thank you, Jason, again, thank you for making all of this understandable for all of us. We really appreciate it.

And you as well. Thank you.

Bye.

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Sam.