652: Unveiling Missing Trillions: Catherine Austin Fitts on Government Spending Part 1

This show is produced by the Hartman Media Company. For more information and links to all.

Our great podcasts, visit hartmanmedia.com.

Welcome to the Holistic Survival show with Jason Hartman. The economic storm brewing around the world is set to spill into all aspects of our lives. Are you prepared? Where are you going to turn for the critical life skills necessary to survive and prosper? The Holistic Survival show is your family's insurance for a better life. Jason will teach you to think independently, to understand threats, and how to create the ultimate action plan. Sudden change or worst case scenario, you'll be ready. Welcome to Holistic Survival, your key resource for protecting the people, places and profits you care about in uncertain times. Ladies and gentlemen, your host, Jason Hartman.

It is my pleasure to welcome Kathryn Austin Fitts back to the show. I have followed her work for almost 20 years. She was on the show about maybe eight years ago, so it's been a while. We want to have her back more often because she takes a very deep look into some of these issues and really thinks of things in a different way, which is fascinating to me. She's an expert in permaculture. She's an expert in the missing trillions of dollars that I'd like to ask her for a follow up on because I haven't heard her talk about that in many years. And she worked in the White house under George Bush 41 as the Secretary of Housing. I believe she'll correct my title there maybe. And we are going to talk about a variety of things today that are threatening your financial future and some opportunities and how to deal with them to have a better future, both financially and otherwise. Katherine, welcome back. It's great to see you.

Great. It's great to be here. I was Assistant Secretary of Housing, the federal Housing Commissioner, so I ran the mortgage markets. And I also want to say, Jason, how much I enjoy you and your show. When I was an Investment Advisor for 10 years, and I used to be amazed at so many people who had dealt with financial planners and financial advisors and people including in real estate, and they felt they could never understand.

Right.

And one of the things about you, you truly believe that everybody can understand and everybody can learn, and you make the information so accessible and fun to learn that I really appreciate your effort to get us all educated about real estate. I think it's wonderful.

Thank you so much for that, Katherine. You know, one of my real role models on that, I think, was Ronald Reagan, who took complex topics and made them really understandable with metaphor and analogy. And, you know, I just Think that's a great skill. And I've tried to try to copy him on that kind of stuff. So.

Well, you, you know, you exude. You can do it, you can do it, you can do it. And then you go through all this complex information and you make it seem, you know, not overwhelming. So I appreciate it.

Well, thank you so much. And you know, there are so many places we can go. I could certainly talk to you for three or four hours, but we don't have that much time. So let me ask you about the missing trillions of dollars. You know, many years ago you, you were talking a lot in your newsletter, the Solaria Report, and on various interviews where I would hear you speak and on my show too, about how during the Great Recession, about $4 trillion, I.

Believe it was just so as of 9, as of 9 11, 4 trillion had disappeared. So let me go roll back in 1995, we had a budget crisis. And when the crisis happened, it was later described to me by the head of the largest pension fund in the country who said they, the people who run the financial system have given up on the country and they're moving all the money out starting in the fall. And if you look at the government system in the Western world and in the United States, you have the bankers running monetary policy and then the legislatures running fiscal policy. So it's kind of a balance of power between the people's representatives and the bankers. Essentially what happened in the mid-90s was the bankers gave up on trying to get the fiscal side of the House to be responsible. And they literally decided to re engineer government with an effort to slowly have the monetary side of the House take over and run the fiscal side of the House. And it's becoming much more obvious today. And so the step one was in fiscal 1998, which started in October 1, 1997, large amounts of money started to go missing from the federal government. And the federal government started to admit publicly that they refused to obey the laws related to financial disclosure and financial management. As of 9 11, which was 2001, 4.1 trillion was missing from DoD and HUD. Now what does that mean? That means our pension funds buy Treasuries, the money, our retirement savings goes into treasury and then it disappears out the back door, as far as we can tell. And this is remarkable because you're talking about the largest issuer securities in the world refusing to obey the most fundamental laws related to financial disclosure or financial management. I mean, complete disobedience to the, you know, to our own laws. So, so 4 trillion. By the financial crisis, the number was up to 12 trillion. And of course, we know that 27 trillion was essentially gifted to the banks, the European and US banks or someplace else. So the. According to the TARP IG, the total bailouts were 27 trillion. That is, in addition to what was then 12 trillion. In 2015, the largest amount went missing from the federal government of all the years from 1998 to date. And that was 6.5 trillion in fiscal 2015. And I started to talk about it publicly because this is an astonishing amount of money. You know, people always say, how can it possibly be that much missing? You know, if you issue Treasuries, if you can issue Treasuries to, you know, an infinite amount, you can disappear an extraordinary amount of money, including if you issue both treasury and agencies off balance sheets. So another topic.

So you suspect that this money went.

I mean, just so again, get there. Let me, let me get to the total of what's missing. So in 2017, 2016, a professor from Michigan State University heard me talking about the missing money and assumed I had to be wrong. There's no way you could go lose 6.5 trillion in one year at DOD. When the army budget is less than a trillion, it's six times more than DOD's budget. So he went to the financial statements to check on me, and it turned out I was right. And he called me and said, how can I help? The way he helped is he and his students did a complete survey of all the DoD and HUD documents from 2000, from fiscal 1998 to 2015, and he got the number up to 21 trillion. So now we published the report in 2017. If you go to missingmoney.solari.com, you can get all the documentation that we published in 2017 in many years, we've done many publications since. Anyway, at the time that we published, his name is Dr. Mark Skidmore. @ the time we published his report with 21 trillion of undocumentable adjustments through.

Fiscal 2015 year of GDP.

Basically. Guess what the outstanding treasury debt was at that moment in.

Time? About the.

Same. I don't know, 20, $21.

Trillion. And now we're at what, 34.

Trillion? Right, right. But, but let me point out the, the challenge here. So instead of having $21 trillion of debt, or now $35 trillion of debt, the treasury could have just issued the currency itself with no debt. Right. So we could have just issued Greenbacks. Lincoln was trying to issue Greenbacks he got shot. Kennedy was trying to issue greenbacks, he got shot. Andrew Jackson tried to shut down the central bank, he got shot. But he, he took the bullet and lived and managed to shut down the central bank. But there's a long history of presidents who try and just issue the currency without debt being shot anyway. But there's no reason we have $35 trillion of debt. We could have just issued the currency. Right. So that's sort of financial problem number one. Financial problem number two, when we issued the 21 trillion and the money went into the treasury, the treasury refused to produce audited financial statements and appears to be missing $21 trillion. Okay. And again, approximately 50% of that money came from our pension funds. So a lot of pressure was put on the treasury and the Department of Defense to enhan to produce two things. One is audited financial statements. But then to describe where did this money go and how do we get it back. And suddenly in 2018, as a resolution to this pressure, the federal government instituted a new administrative policy called Federal Accounting Standards Board Advisory Board number statement number 56. I call it FASB 56 for short. Have you heard of this yet.

Jason? I have not heard of.

This. Okay, so remember the Kavanaugh.

Hearings?

Yeah. Okay. This came out during the Kavanaugh hearings and most people didn't.

Notice. Well, they were, they were busy accusing Kavanaugh of all sorts of things that happened in college. Right.

So. Right.

Very. Didn't.

Happen. Very, very, very salacious things. Okay, so statement 56, fast fee statement 56 comes out during the Kavanaugh hearings and it is approved by the House and the Senate, both Republican and Democrat, issued through the White House. So we have the Trump administration and all Republicans and Democrats, House and Senate, all agreeing with the Trump White House to do this. And what FASB Statement 56 says, and there's a lot of information about it at missingmoney.solaria.com, is the federal government by a secret process and a secret group of people can secretly move a portion of its books secret. So the federal government can keep secret books. So can 150 related agencies and commissions. And when you combine it with the classification laws, also all the big contractors and defense companies that do and banks that do business with the federal government. What this means is, so imagine this constellation of 24 covered agencies, 150 plus commissions and other related agencies, and all the big corporations and defense contractors and banks that do business with the government. So make a guess what portion of the U.S. securities market is that 60.

70%. Oh, I just a big piece.

A big number, okay, what it says is they can all keep secret books. So what they're saying, as a matter of administrative policy, they don't have to obey the Constitution, they don't have to obey the financial management laws, and they don't have to obey the financial management regulations by an agreement of administrative policy, which can't possibly be constitutional, but they did it. And since then, essentially the books and records of the US government, to me they're essentially meaningless. I don't know what they mean because I don't know what part got taken.

Out. And this is not a rounding error. This is, you know, equivalent to an entire year of the country's productivity. It's absolutely insane. Catherine. Well, so much to cover though. You know, just bring this to a point of what does this mean to us other than the fact that we can't trust our government or our banksters.

Obviously. So here's what's important, because I think the important thing is if I own property, you know, how do I optimize and grow my equity? That's what I'm concerned about. And how do I do that in a way which is appropriately risk managed? So what I want to know is at the day to day level, what can this mean to me? The first thing it means to me, basically having an out of control federal financial system. The first thing it means to me is inflation, and I don't need to tell anybody in that call that now because they're experiencing it. The second thing is it's part of an operation that's trying to centralize control. So the monetary side of the House is trying to take control of the fiscal side of the House, and they're doing it in a way that centralizes economic and political power. So in 2019, the central bankers voted on what's called the going direct reset, which is essentially a consolidation of the process that started in 1998. So what started in 1998 was a financial coup. The going direct reset is a way of consolidating that process. So essentially they voted in August 2019 at Jackson Hole. The next thing that happens is the Fed goes into the repo market, we inject $5 trillion through the pandemic, straight directly into Wall street and shut down Main Street. Now, when you shut down one group of businesses and you inject $5 trillion available to the other group of businesses, what happens? You get to take it. And that's what happened. If you look at the plans underway for other pandemics or other operations like that, they're building up to more takings. And I think problem number one for a major property owner investor is how do I manage my way through a great taking, particularly if I have a lot of debt? Because one of the ways they control is by putting countries and investors and even families in a debt trap. If you go around the world and you talk to all the leaders who are trying to stop the WHO treaty, which is the ultimate real estate taking mechanism that I've ever seen, if you talk to the leaders who are trying to stop it, what they say is if we don't go along, they'll cut off our lines of credit and we're in a debt.

Trap. So this is the WHO Treaty you're talking.

About? No, I'm talking, I'm talking about, I'm talking about the IHR amendments. So there are two things. The first thing is the IHR amendments to be approved this year. The second is the treaty which they're now calling a pandemic agreement, which the difference between the two amendments in theory are supposed to be able to be passed by the members without taking them for ratification. A treaty requires, for example, in the United States Senate, ratification. So the approval process is much more demanding and strict. Now, if you look at where they are, my understanding is they have not gotten the votes they need to get the amendments through and they're trying to bluff their way by saying they do. And this is one of the reasons we're watching, you know, at least one assassination globally, as I suspect is what's happening. But anyway, so there's tremendous tension. I did an interview with Sasha Latipova that said that the Solari report that goes in in depth, the way the WHO works is first of all, it enables surveillance at the neighborhood level, very invasive surveillance. Then what it does. And again, this will work through national offices. It establishes a process where you can assert jurisdiction in a neighborhood at a town or county level based on finding pathogens in that place. So I can come into your neighborhood, Jason, and I say, ah, you have a pathogen in your septic tank. We need to quarantine this neighborhood. Right, right. And so you can lock down a very defined scripted.

Place. And who, who gets to do that? A foreign power. This, a non.

Governmental. So, I mean, so, so the, so what you want to look at? No, the, the WHO is designed, my understanding is the WHO is designed to work through national offices. So, so the WHO will do a variety of surveillance and different functions, but the implementation and the sort of chain of command Will work through a national office and I'm assuming, depending on your jurisdiction, it will roll down through state and local. As you know, under the law, the federal government does not have jurisdiction of health. The states have jurisdiction. And so the question is, do you have a state governor and local sheriffs who can assert state authority and stop this kind of. It's really a taking machine. It's funny, as assistant secretary of housing, I got quite an education in how real estate grabs work and how government is used to do real estate grabs. You know, some call it gentrification, but there was at HUD you could see a lot of grabbings going on. I've never seen a more powerful infrastructure to take real estate as both the amendments and the. And the treaty now agreement is what they're calling.

It. Anyway, it's interesting, you know, many people who are concerned about these types of things are buying bugout locations, right? And if you have water on your land, the federal government has jurisdiction over that pond, that lake, whatever it is. And if you have a ham radio license, the federal government basically has an automatic preemptive search warrant where they can come in and inspect your equipment anytime they want. So you got to be careful of these things, both from just a search and knowledge point, but a control point and a property grabbing point of view as.

Well. So one of the things I want to stress there is no away.

We've had for decades a group of people working steadily, often behind the scenes, to centralize control. And digital technology gives them extraordinary powers to do so. So they're trying to exercise centralized control. Most of us have been looking for a way to avoid them or get around it or just survive despite. And my message is there's no, you know, the Cook Island Trust will not protect you from this. You know, going to Switzerland will not protect you from this. Moving your money, you know, into 20 different jurisdictions and complicated structures will not get you away from.

This. Tell us why that won't work, those.

Things. Because we have a group of people who are trying to centralize political and economic control. If they get financial transaction control. And many people think of financial transaction control as CBDCs, but they can do it without CBDCs. If they get financial transaction control, they're going to control everything. So when the World Economic Forum says it's 2030 and you have no assets.

They'Re serious. They are very serious. And if they get financial transaction control, they can relieve you of all your assets and all your.

Rights. We've all heard of capital controls, but when you say Financial transaction control. What does that really look like? I mean, is it more than know your customer? What is it? You know, I'm. Okay, I got to just mention something before.

This.

Okay. Practical purpose. And I was talking to someone about this. You know, recently I've had a few conversations like this. Catherine, I cannot believe the amount of time I spend nowadays on banking. I mean, I always thought banking was this thing that was just part of the infrastructure that was just there when I needed it. Now banking every week I spend hours, it seems like, on fricking banking issues. I, I mean, you know, just in my, you know, I have all these different entities just like you said. Right. I'm doing all the structures and, and, and that's good. It is so complicated to move money around to do anything anymore. I just cannot believe that. And I thought this was mostly a result of the Patriot Act. But you know, tell us about what does this central controls look.

Like. Imagine being a herd of livestock and three sides of the corral are up and now they're slowly putting into place the four side of the corral. So I'm glad you asked that question because I want to show you four.

Videos.

Okay. I think the way to understand total central control through digital. Now remember this depends on an all digital system, right? And this is why we want to preserve cash and checks. You know, cash and checks may not seem so.

Convenient. Cash is a form of privacy and human.

Rights. Right, exactly. So. So we want to do everything we can to preserve cash and checks. But let me show you these four videos because the way to understand this system is not for me to tell you what it is, it's for me to tell or me to show you the central backers telling you what they plan on doing. The first video is from a 2020 IMF panel with Augustine Karstens, who's the head of the bank of International Settlements in Basel, Switzerland, which is essentially the central bank for all the central.

Banks. And I will be in Basel in just a month or so.

Myself. Oh, wonderful, wonderful. It's beautiful this time of year. Anyway, so this is Augustine Carson explaining why he likes central bank digital currency.

Cbdc. CBDC in particular for the use of general. To the general use. We tend to establish the equivalence with cash and there is a huge difference there. For example, in cash we don't know for example who's using a $100 bill today. We don't know who is using a 1000 peso bill today. A key difference in with the CBDC is that Central bank will have absolute control on the rules and regulations that will determine the use of that expression of central bank liability. And also we have the technology to enforce that. Those two issues are extremely important. And that makes a huge difference with respect to what cash.

Is. Let me first tell you what he just said. First of all, he said it's not your money, it's his money. Right. It's a central bank expression of liability. It's their liability, not your asset. That's the first thing he said. The second thing he said is he can make the rules of how you can use your money and he can control and enforce them centrally. Okay. That is total control of your money. Okay. The next one is Boli, who is a deputy managing director of the IMF. This is in 2023. He's a former bank of China official and he's explaining the programmability of money, which means integrating into money complex rules of how and when and where you can use it. Okay, so let's watch Bully and.

If they don't like your social credit score, they can restrict the time you can use it. What you can use it for, where you can use it. I mean, it's so.

Scary. It's total. So if you don't sell me your property, I want to buy your property. You don't sell me your property and turn off your.

Money. Yeah, scary. Okay, here we.

Go. The second aspect that CBDC can help improve financial inclusion is because of its legal tender status. Because CBDC is an obligation of central bank and the obligation of central bank is a legal tender in every country. So it is widely accepted that creates potential value for everyone to use it. And finally, the third way we think CBDC can improve financial inclusion is through what we call programmability. That is, CBDC can allow.

Government agencies and private sector players to program to create smart contracts to allow targeted policy functions, for example, welfare payment, for example consumption coupon, for example food stamp. By programming cbdc, those money can be precisely targeted for what kind of people can own and what kind of use. This money can be utilized, for example, for food. So this potential programmability can help government agencies to precisely target their support to those people who need support so that we can also improve financial.

Inclusion. They're always doing it for our own good, aren't.

They? So imagine, here's just imagine during the lockdown, if they could have enforced all the different rules and regulations literally from New York or Washington or Basel, Switzerland, so they could determine whether you could leave your house, what kind of food you could buy, we Just did, Jason. An incredible Solari report on pharma food, including synthetic lab grown meat. It's the most frightening thing I've ever read. And I realized, oh, financial transaction control is the marketing plan because no one would ever eat this stuff. You would never voluntarily buy or eat this stuff. And I realized, oh, but basically what they can say is the only food you can buy with your money is pharma food. Anyway, the next one is Richard Werner, who is my vote for the top academic scholar in the world on central banking and banking. He wrote the definitive book on the Japanese central bank called the Princess of the Yen. He's been consulting with the Chinese on what they're doing in the currency area. He and I were in Malmo, Sweden together in, in May of 2022. We were on a panel and Richard told this story. So this is Richard Werner in.

Sweden in 2022 and I also shared the stage with him at a conference where we were both speakers about a year and a half.

Ago. So, yeah, absolutely first rate.

Right? Here he.

Is. 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 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, of the old paper money. But of course it still has the control aspect. So 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, 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 this 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 body, my view, violates human dignity and can be then used 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 the hurdle will be higher for the central planners to introduce the.

Cbdc. And we'll be back with a.

Lot more on this topic with this.

Guest on our next episode.

Thank you so much for listening. Please be sure to subscribe so that you don't miss any episodes. Be sure to check out the show's specific website and our general website, hartmanmedia.com for appropriate disclaimers and terms of service. Remember that guest opinions are their own and if you require to specific legal or tax advice or advice in any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you're using and write a review for the show. We would very much appreciate that and be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.