By Catherine Austin Fitts
My theme on Money & Markets this week on the Solari Report was “The Boom Bust Economy.”
Globally, some people, areas and industries are enjoying an economic boom. Some are in recession and depression.
I drove from San Francisco to Tennessee in early July. Then from Tennessee to Rhode Island and Connecticut and back in the last two weeks. Areas filled with big ag, oil and gas, digital manufacturing, IT and biotech are booming. That economy is strong.
Most other places are in recession, particularly if they have no significant water, natural resources or agriculture.
Another way to look at this phenomenon in North America is that $40 trillion was moved out of the legacy economy – leaving union contracts and retirement and health care plans to fight over fumes in the legacy systems including municipalities and government programs such as Medicare – and is being reinvested in a very high tech new economy. The change in Crowdfunding rules will turbocharge the innovation after the SEC rules change later this year.
So the folks who were depending on the legacy systems are being thrown over board through debasement, abrogation, foreclosure, taxation and bankruptcy. They think the world is coming to the end.
As the boom is being lowered, they are having to listen to well paid academicians and think tank policy wonks explain why it is as a result of their financial irresponsibility.
The places that are enjoying rich re-investment think the economy is going gangbusters. They think things are just fine. They are described as dynamic, without thought for the invisible financial mechanisms operating behind the scenes.
Walmart’s earnings report is given as evidence that the economy is collapsing. However, Walmart serves the people being thrown overboard. In the US, that is the people who live on social security, disability, welfare, unemployment. As governments continue to squeeze these folks they are collapsing. This includes Walmart’s employees. Since 1990, the life expectancy of an American woman my age who does not have a high school degrees has dropped 5 years. Men have dropped 3 years. From what I see on the ground in middle America, life expectancy is heading down.
The people being thrown overboard are sinking. But the ship is sailing with a fresh coat of paint, $40 trillion of new capital, refreshed with the freedom to sail forth free of liabilities.
The “Good Ship Economy” is not sinking. Rather, a lot of people who are being thrown over board are drowning.
The $64,000 question before us now is whether the leadership is going to swing the pendulum back to return a semblance of competency and lawfulness to the US government or let it grind on as is. At a minimum, if you are going to depend on force to retain the value of the US dollar, you need a competent military.
Secretary Hagel is indeed in the hot spot.
