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Catherine Austin Fitts of The Solari Report was recently interviewed by Greg Hunter about her 2014

Annual Wrap Up. Her brief is wide-ranging and her coverage very interesting so I would like to make
some comments about what I perceive as her and Solari`s world view.

The New World Order
I have often found that ruling classes are discussed as if they are more organized and coherent than they
really are. This is often a form of shorthand designed to save time in conversation but the Gentle Reader
may be left with the wrong impression. For example, Ms. Fitts discusses the U.S. as having certain
objectives when in fact the policies discussed are a kind of sludge generated by a chorus of competing
voices who continuously undermine each other in order to enhance their own power. The President and
Congress, Globalists and the Tea party and so forth.
Likewise, she refers to Mr. Global, who is in fact the summation of a large number of individuals and
organizations who come together and fall apart in constellations that are always shifting. At this point in
time, Mr. Global wants to transfer wealth and employment to the developing world while reducing
resource consumption elsewhere. Resultant arbitrage opportunities serve to concentrate economic
benefits and control in fewer and fewer hands, which is the real objective once we get past a lot of
rationalizing about efficiency and the environment. Increases in efficiency generated by freeing up world
trade have benefited some workers in places like China, but have mostly been sopped up by the top 1%
of the world economic pyramid.
This situation is very unstable as the masses in the First World have no vested interest in the
globalization process. They get some cheaper imported goods at the price of losing many middle-class
jobs. As Ms. Fitts puts it, labor is being deflated to balance monetary inflation. There are many
exceptions to these generalizations but overall, the workers get less and the financial manipulators get
more.

Collapse of Honesty and the Rule of Law
The Rulers of the 21st Century have taken a lot of short cuts along the way and have shown no great
respect for the Rule of Law, or any need for accurate information. Trust is fundamental to the
functioning of markets but financiers have found a way to monetize it by exploiting the long-term habits
and assumptions of investors [CLIFF NOTE: I believe this is Tim’s euphemistic way to say investors are
being used and abused because they are willing to trust the authorities when they shouldn’t]. That is a
one-way trip. After the 1929 crash, it took over thirty years before a new generation of investors
appeared who would sink money into equities. The current situation is no different.
There is a complex relationship between governments and the world of finance. Elected officials want
the public to believe things are better than they actually are so they understate increases in the cost of
living and overstate job creation. Note that I don`t use the term inflation as different assets and

instruments inflate and deflate at different times and rates. Increases in employment that are being put
forth in the U.S. as evidence of recovery are mostly based on estimates (see Birth/Death Model). The
Media is not much help in this regard as any sensible commentary is buried in a mountain of promotion.
The financial cable outlets have been suffering a considerable loss of viewership as individuals slowly
wake up to the shortage of reliable content.
At the same time, financial firms often act to manipulate markets at the behest of government. In
return, they are allowed to carry out said manipulations plus fraudulent acts of their own with a
minimum risk of punishment. Very few persons have gone to jail as a result of the actions that resulted
in the crisis of 2007-2008 and the succession of settlements and fines have actually been a form of
taxation that will continue for a while yet. There is a great show put on, but much of the settlement cash
vanishes in accounting manoeuvres while the rest goes to general revenue.
Ms. Fitts estimated that there has been a $40 trillion wealth transfer and I regard that number as good
as any. Much of that is represented by a massive increase in that value of assets including equities, real
estate and government debt instruments. The main limitation on this wealth is that it is far too large to
be liquid. It can, however be used to take increasing control of all economies in the world. Companies
are transferred by stock deals and exchanges of debt instruments just as effectively as with cash.
Meanwhile, the securitization of bad debt is growing again since it is so very profitable. It is not that
nothing has been learned; it is just that nothing has changed.

The United States and the New World Order
American policy has been to insert itself in the flow of events in Eurasia in order to remain dominant,
while containing the rise of China. For example, the U.S. has no large direct interest in the oil fields of
the Middle East as most of its oil comes from elsewhere. These supplies are vital to Europe and the East
Asian powers and therein we find the lure. Before Saddam Hussein was overthrown, power in the region
was roughly in balance with Iraq being a Sunni-dominated player keeping Shiite Iran from expanding
south and west.
A somewhat disjointed set of policies by the U.S. and NATO has replaced dictators and oligarchs with
nobody capable of assuming power and have left a trail of failed or failing states: Iraq, Libya, several in
sub-Saharan Africa, Yemen, Syria, Afghanistan and arguably Pakistan and the Ukraine. Iran, Russia,
China, the Saudis and the Gulf Emirs have either not been helpful or have been active in speeding up the
mess. Iran is now in a position to move directly against the Saudis and Kuwait, as a large contingent of
Revolutionary Guards now ensures the survival of the Shiite regime in Baghdad.

The New World Order Excluding the United States
Russia, China and Iran are leading examples of countries that would like to free themselves from the
domination of the U.S. Dollar. China has to hold massive quantities of U.S. debt and the other two are

currently subject to sanctions wielded by the Americans via their domination of the financial apparatus
of the planet.
Mr. Global apparently wants to speed up a transition to more neutral forms of reserve currency. The
Chinese are doing their part by making bilateral deals to do trade directly using their own currency. Iran
and Russia have been mastering the art of bypassing the sanctions. For example, India has been able to
trade for oil using gold and rubles in place of dollars and get a discount in the process. A decline in the
importance of the U.S. is bound to have a negative effect on U.S. power, but it will take years to
develop.
It would appear that the Saudis are fed up with waiting for a direct military response from the U.S. and
decided to crash the price of oil. This directly punishes Russia and Iran who are their rivals in the wars
going on in Syria and Iraq. It is quite likely that many American officials are on board with this since the
drop in oil revenue is a far more effective punishment than the other sanctions they have tried. It also
benefits much of the U.S. economy at the expense of the oil industry who don’t have as many friends as
they used to.

Gold and the Dollar
Ms. Fitts likes gold but does not feel that it will be a great investment till the price breaks out above
$1550. I think it is important to remember that the American market in gold is only about 7% of the
world total. In most other currencies, gold has broken out and has been a great investment. The key
here is that we live in our own currencies and in Canadian dollars or Euros or Rupees or Yuan, gold is
good and getting better.

Chaos as Policy
The U.S. dollar is crashing upward and this is just as much a symptom of growing chaos as the recent
downward crash in oil. Countries are failing as a result of half-baked intervention. Trust in authority is
declining in areas where it used to be rock-solid. This is a process that chips away at Power.
Ultimately, the power of America to influence the world and to remain powerful is rooted in its military
superiority. Rome survived two centuries of hyperinflation and economic decline (280 – 492AD) and in
the end, lost only the western third of the economy and population. It maintained military superiority
over individual opponents and managed to go on to several resurgences after the currency was
reformed. Great powers do not vanish overnight.
In Flyover Country, most people still believe in America and it is still possible to recruit loyal citizens for
the Legions. This is America’s great strength, bolstered by superior organization and technology
accumulated over time. Russia and China have had a lot of problems trying to build effective Aircraft

Carriers and flight groups and a lot of issues with nuclear submarines. Eventually someone may succeed
in these areas and others, but it will take a few more decades and a few wars for practice.
In the meantime, there is a great glowing Joker in the deck. Nuclear weapons are a genie that is
definitely out of the bottle. The current great powers understand that nukes neutralize each other and
can’t be used in the proxy wars that they wage against each other, but not everyone is motivated by the
international regime of mutual understanding. North Korea is a regime based on what amounts to
organized crime at the state level and expects their possession of the bomb to gain them a great deal of
extortion money from America, Japan, and yes – China and Russia. This cannot end well.
The Pakistani weapons program was financed largely by the Saudis and it is strongly hinted that they
have some of the devices. China sold IRBM’s to the Kingdom and recently updated them, which makes
no sense whatever unless the Saudis intend to mount nukes on them. It also possible that Pakistani
devices have been sold to whoever is willing to pay the price. This is a great, gaping hole in the current
tattered garment of World Security.
Forgive Iran if they feel surrounded by hostile nuclear powers – Pakistan, Israel, Saudi Arabia, possibly
Russia and definitely U.S. bases in the area. That is why they will never give up their development
program, but will continue to stall and prevaricate.

Non-Executive Summary
I won’t comment at length on investment advice for individuals except to say that this is a time of
increasing disorder and declining trust. Some things will develop slowly but others could come on quite
quickly. We are in fact engaged in a world war, done a bit at a time in remote places, but the process has
begun to bring down quite sizable states. As trust declines in government and in business, each person
needs to become well-informed if only to protect themselves and their families.