The Black Budget | Catherine Austin Fitts

Transcript

60 seconds in counting. We are go for Apollo 7 at this time. TUS 57. All right. Our first speaker of the day is a very good day to start our second day here.

A very brave woman who hasn't feared to going into these questions and tackle these subjects. We need more like her. She is a uh she is the publisher of the Solari report and managing member of the uh of Solari Investment Advisory Services. She served as a managing director and member of the board of directors at the at the Wall Street bank Dylan Reed and Company. She also served as assistant secretary of housing, Federal Housing Commissioner at HUD, that's a housing and urban development in the first Bush administration and was the president and founder of Hamilton Securities Group.

Her work has been key in connecting the financial fraud and market manipulations with the financial with the financing of black budget programs. And a number of questions of course arise from this. There might be trillions of dollars worth of hardware flying around in the skies. If they control technologies like this, uh they most likely have advanced weaponry. And that in turn might have instigated a further push towards centralized control of the entire global financial system.

Is this now that we've seen in the last few years from the financial crash and onwards? Well, she has helped to brought to light so many interesting questions and connections like this and we're in for a real treat. Her website is solari.com and her talk will be on the black budget. What does it mean to the US federal budget, the economy and you please give a round of applause for Katherine Austin Fitz. Thank you very much. You know, if I was back in Tennessee right now, I'd be in church.

So, I feel a little bit guilty not being in church. So, I've decided we're going to have church here today. So, I'm going to say good morning, and you're going to say good morning back. Good morning. Have you said hello? And have you met the person sitting next to you? I just want you to take a minute to do that if you haven't.

I'm going to 10 9 8 Good. Okay. One of the things you need to know is that the some of the most important truth seekers and important trutht tellers that I've ever known of or known on the planet or known in my life are here today both speaking and in the audience. So, you never know who you could be sitting next to. Okay? I'm going to be talking about money and I want to make sure it's very important to me that your questions get answered and your stories get told.

So, if you don't have a chance tonight in the Q&A panel, um I wanted you to know Bonnie Faulner from KPFA radio is here. Bonnie, raise your hand. Bonnie and I are going to be doing the salari report and um you can send your questions to ask Katherine. Um you can send them to customer service. I'll be here all day.

We also have nines of the nines.net blogging on the carrier report. She's right here. Nines, raise your hand. She's doing she's doing a series called Fear and Loathing in Silicon Valley on the Saleri blog this week. So if you can't if you don't have time to talk to me or we don't connect and you have questions, give them to Bonnie, give them to nines or send them to customer service.com and and we'll make sure they're answered.

But we're going to have a Q&A panel uh panel and a Q&A tonight. So hopefully we'll cover everything you need. Money. I'm not going to talk about space. I know nothing about space other than what Richard Dolan and Joseph Frell teach me.

Um, I'm going to talk about money. And here's what I'm going to say about money. Um, Dr. Frell yesterday talked about a hidden system of finance growing up out of money essentially illegally gathered during the World War II process. So, we talked about this system of hidden finance.

Excellent, excellent description. And if you weren't here yesterday, please make sure you get a chance to watch the archive. So this hidden system of finance, we talked about the creation of the black budget. I'm going to talk about it in more detail today. And then of course we have the regular financial system.

So think of the financial system as something that runs on three tracks. The overt economy financial system which you and I see every day, the black budget, and then this hidden finance. And what I'm going to describe to you today, it's very simple, is that that hidden system in the black budget grew and grew and grew. And what happened in the bailout period is it simply overwhelmed the whole system. And we're watching an integration of those systems in what I refer to as the period from 19 the early 90s to 2012 as the financial coup d'eta.

And my theory is that we've literally seen a fundamental change of control on how the planetary governance systems as a result of the shifts in money and technology that happened during that period. So I'm going to be talking about it. Everybody here knows how a budget sheet works. If you look at the the budget uh the balance statement for any company or for you personally financially, on one side of the balance sheet, you have the assets and on the other you have the liabilities and the equity. Okay? Okay.

So, I've just made a circular I like doing things in circles. So, um if you if you follow the money, the reporters always say follow the money. If you follow the financial transactions, all assets and operations on planet Earth leave a financial footprint. You have transactions, you have funding, you have people who think they own certain things on and on and on. And what we're watching on planet Earth, what we've been watching since 1947 is you see huge sections of the financial system and the sort of map of the financial money and there's nothing on the other side of the balance sheet.

There's like this big question mark and one of the do you ever feel like the official reality and reality are getting further and further and further apart until your head is like a bungee rope? You know, I walk around saying it just gets weirder and and part of it is that is that you have more and more money and more and more assets going into that thing and driving the whole ecosystem financially, you know, but until you look at that question mark, it's very difficult to do. Okay, now I just talked about the planetary balance sheet. Let's go down to one community because that's how this started for me. I wasn't interested, you know, when I first started doing coast to coast. I was like, George, I don't want to talk about spaceships.

I want to talk about, you know, roads and bridges and utilities and it it really was the Coast to Coast audience, which is an incred listen to Coast to Coast. You are an amazing group of people. You are so smart. And it was you who really convinced me, you know, look, you've got to go find the Dr. Joseph Ferrells and the Richard Dolans of this world because you've got to put this you've got to put this piece into your map.

I was working I I in the Bush administration one of the things I discovered was that there was a complete disassociation between the financial statements and how the money worked by place. So let me describe it. When I first I walked into the the FHA the first day and the first thing I did was I read the law related to how the operation worked and what my legal responsibilities as the FHA commissioner was and the law was very clear. I had fiduciary responsibility personally for the funds and in the single family fund which at the time was almost $300 million I was required to make sure that our revenues were greater than our expenses we had to run so the premiums covered our operating expenses and any defaults we had on the mortgage insurance. So I called in I I called in sort of my llayisons on person and I said I want to see the chief financial officer.

They said we don't have one. I said, 'Well, who you know who does the financial statements? And they said, 'Oh, we don't have financial statements. So I said, 'We have a budget.' They said, 'Oh yes, there is a budget office. I said, okay, well, let me see the head of the budget office. So the head of the budget office comes in and and I said, okay.

Um I one of the things I uh I said, how much are we making or losing every year? He said, that's not in the budget. So I said, well, give me the budget. budget and the budget justifications come up to here and um and so I'm a speedreader and I read them four times that weekend and I couldn't find anything that would inform how much revenues we're getting and what expenses we were spending. And part of the problem was one of the funds has a put to the Congress. So whatever we lose that year, we just send a bill to Congress saying you have to give us that much money without disclosing where it went.

Okay? Lots of situations like this in the government. So, so finally, uh, I said, "Look, I need to talk to the accountants because I need to get into the payment systems and understand, you know, I've got to figure out if I'm complying." And he said, "Well, the accountants report to another assistant secretary and you're not allowed to talk to them." So I I you know I and for which I apologized I had raised a great deal of money for George HW Bush and what I got was I got presidential cufflings and the accountants moved over to report to me because I just called up everybody over at the White House and said you know I raised all this money I want the So the accountants moved over and it turned out that we were losing $11 million a day in the single family fund. This was 1989. Can anybody guess in what two regions? It turns out we're making money in eight regions and losing money in any in two regions. Can anybody guess what regions those were? Texas and Colorado.

Exactly. Okay. Black budget. Read black budget. And so what I tried to do was implement something where we could do placebased financial statements so we could see by community because you vote for political representation by community, right? You have a congressional district, right? Do you get a financial statement that says here's the sources and uses of federal appropriations, contracts, and other monies? Okay, here's my message to you.

The black budget finances one community at a time globally. Okay, come to my neighborhood. What you'll discover is Tony Soprano is dealing the drugs and if you push him out, James Bond will come down in your head with a, you know, a helicopter. Okay, that's the model. and it's highly centralized and one community can't get out of it because if one can get out in a highly centralized model, everybody can.

Okay? And so, um, I left the Bush administration and I said, you know, private entrepreneurs are going to need to do this. I created a software tool called Community Wizard, which would allow people to look, use geographical information software and see how all the money worked in their place. the Department of Justice seized it and kept it under lock and key under court control for six and a half years. When I finally got it back out of court control, the most valuable pieces were missing. And that's why um I always say the housing bubble could never have happened.

That level of mortgage fraud could not happen if you were looking at how the money worked by place. When I was the commissioner, I used to regularly get an inventory of where the foreclosures were in in a in a place where I was going, you know. So, I'd fly to Dallas and I'd walk out and I'd look at that plot of land and my inventory said we had 10 homes there, but we didn't. It was an empty lot. Okay.

But if everybody had been getting the finan the legally available financial disclosure couldn't have happened. So, um, one thing to keep in mind, if we're talking about real solutions, place-based financial disclosures are in fact an incredible opportunity because all of the wealth that's being drained and destroyed can be reverse engineered. You can make money healing the situation. You can build financial models where we can make money healing the environment. We don't need to grow consumption.

One of the mistakes I made, of course, was I started publishing maps of where the mortgage foreclosures are. This is a map of mortgage foreclosures uh in the area in South Central LA where the Dark Alliance allegations pertained. Turns out they were using mortgage fraud to launder some of the money. Um you can read all about it. I've written an online book called um Dylan reading the aristocracy of prophets.

It's at dunwalki.com. Okay. So the before we start this, we have to transcend the cover stories. Okay. Um if you watch the press and we're going to watch a little bit of press today.

Um you hear four cover stories which are completely uh irrelevant and we can't get into understanding what's going on in this planet until we blow by them. Um the first one is corruption. Okay. In the summer of 2000, I went to visit the chief of staff to the appropriation subcommittee that controls the 21 agencies which include Treasury and the Department of Housing and Urban Development. Now, I was just trying to get my company paid.

We we I was on a bill collection and um and the chief of staff looked at me with somebody I didn't know and they said, "Uh, so so remember this is the senator who controls the appropriations to HUD, okay? Controls the HUD budget. It's the most powerful position more important than the White House in terms of controlling the money. Congress controls the pur strings. So the chief of staff to this particular senator said, "What do you think is going on at HUD?" And I was just trying to get paid. So I was being discreet.

I said, "I don't know. What do you think is going on at HUD?" And she looked me dead in the eye flat and said, "HUD is being run as a criminal enterprise." Now, here's what's important for you to know. HUD at the time is on a matrix structure. HUD is controlled and operated by and with the New York Fed, the New York Fed member banks, the Department of Treasury, the Department of Justice, and inadvertently some of the intelligence agencies in the military. And it is run by the largest defense contractors in the world or was then.

So Loheed Martin had the lead contract, $150 million a year to run all their operations. So you cannot run HUD as a criminal enterprise unless all of those entities are helping you run HUD as a criminal enterprise. That's not corruption. That's a system. That's a plan.

You know, I'm not going to get in it today. I assure you the housing bubble in this country, both the one we had in the 80s and the one we had 90s was a plan. It was engineered top down from the highest levels of government. The idea that this is corruption or is this is financing offshore villas and Ferraris for people on Wall Street. You know, I never had an offshore vi villa, but I used to rent a Ferrari.

And I assure you, you know, we're talking about money on the scale of a leveraged buyout of the planet, which is essentially what I think the financial coup d'eta. We're not talking about corruption. This is a system. And if you go back into the 50s and 60s and you talk to or read the people who got the eyewitness reports of people who had engineered this system bottom up, because this has been going on for many, many decades, what they all tell you is it was the best of a lot of bad options. You know, we the intelligence agencies got in the organized crime business and grew the organized crime business because we had to have the money.

We had to have it on a secret basis. We had to control. Now, yesterday you heard Dr. Frell talk about and really stress um the fact that at the end of World War II, we put the intelligence uh agencies in the financing business. I'm going to talk about it more then, but think about this because this is a very important governance issue.

You take people who have the power to be completely non-transparent even though they're operating under the cover of government and government law. So, they have governmental authority. They can operate non-transparency. They have a license to kill. So they can kill with impunity.

They are now empowered to run a hidden finance system using organized crime, narcotics trafficking, mortgage fraud, and the loot thereof in partnership with the people, you know, the people that we were fighting during the war. So you've got the Japanese Yakuza, you've got, you know, the Nazis, you've got all these different groups, okay? and and you put them in the banking business where they not only control the money but if you look at how the money is accumulating remember they don't have to pay taxes right if you look at how that money is accumulating they end up having more capital than everybody else so you're talking from a governance standpoint of creating a very frightening kind of animal okay I want to talk about incompetence and complexity I have worked running a large line management operation government what I will tell you is that the senior senior civil service in the United States government that I dealt with were the single most competent people I've ever worked with. They were absolutely outstanding. If they'd gone to Wall Street, they would have made a fortune. Um the problem is not incompetence.

When government when somebody decides they want government to move in lightning speed, they can and do. Okay. Um let me give you an example. When I ran the FHA, we uh had at that time we were issuing about $5 billion a year of mortgage insurance for apartment buildings. Okay? Now our premiums were below market.

What happens when you charge less than market for a financial product? You get more demand. Remember supply and de price is what clears the market. Supply and demand. So we have below market premiums. And so we're getting $25 billion of demand for $5 billion of mortgage insurance.

Okay. So how do you reconcile the f you know who gets the five billion? Well, you know what you're supposed to do is write up a, you know, sort of instructions to the field offices that says, "As a policy matter, we have decided that people with pink polka dot apartments that have less than 100 apartments west of the Mississippi should get all of this insurance." And then they just make sure that those are the only people who get it, right? You can do that. Well, here's the problem. From a legal standpoint, you have to write the instructions that say these noble, deserving people with pink polka dot apartments get it. But if you're going to run successful campaigns and if you're going to feed the black budget, you need to make sure that these insiders get it.

So what do you do? You set up an unbelievably complicated process, all the applications come in, you gridlock, and then the right lawyers get the right 5 billion and it comes right through the process. And when the other 20 billion come in and say, "Wait a minute. You know, we have pink polka dot apartments. What happened?" Say, "Oh, those dumb bureaucrats. They're so incompetent." Okay.

And then when that doesn't work, you say, "Well, you know, it's really it's really very complicated. We have a very complicated process, you know, and it's interesting. One of the things I love about doing what I do is if if you look at who my audience is, who I work with, who I talk with, they're people who are willing to deal with the complexity we need to unpack this." And the speakers you're going to hear from today have done have spent a lifetime unpacking the complexity to try and get back to some simple basics of what's going on. The last thing I want to stress is please there is much going on in the world that um that inspires anger or emotion. But I want to stress that our situation is far too serious for the luxury of unbridled emotion.

Okay? You know this is a dangerous situation. We're dealing with a lot of serious risks. Okay? And one of the things I can promise you, having worked on Washington and Wall Street, most of the people I dealt with and worked with in Washington and Wall Street were as fine a people as I've ever known. I cannot explain what's happening by the fact that they're bad guys. Now, have I watched people who I work with who I thought were good guys behave in highly irresponsible, unethical, and evil ways.

Yes. So, I'm not saying I forgive them. There are some of them I I'm constantly calling names. You know, I always give Goldman Sachs a hard time. I used to work there.

Um, but please don't try and explain what's going on just with saying they're evil and we're good. Because one of the things we have to deal with is the fact that this system is implemented one community in one household at a time all around the world and we are all guilty indirectly or directly. Okay? We all have to take responsibility not because that's the right thing to do but that's how we get our power. It's by dealing with me and changing me and working outward from that that I gather power. And that's what we need in this situation because we're up against a lot of power.

Okay. So now let me talk I'm going to talk about some of what Joseph talked about but I'm going to bring it down to today and I'm going to get into a little bit more of the nuts and bolts. As we described we have a parallel financial system but I want to get into the overtit system and help you see from 1947 on how it started to get integrated. And there are many different pieces of this. Um a very important one is the reserve system.

the the Federal Reserve system and how it works, particularly the New York Federal Reserve, which controls as agent for the Department of Treasury, the Exchange Stabilization Fund, I just want you to remember this word, which is the mother of all slush funds, okay? Because remember, when you take all the gold and other assets that Joseph was talking about it, and you combine it with the US federal credit, the US federal credit is the single most powerful innovative financial mechanism that anybody has ever engineered, it's extraordinary. It took me 20 years to figure out how it really works. But when you combine the federal credit with that hidden system and all the overt resources, it's very, very powerful. Whoops. Okay, federal housing uh finance.

There are many different parts of the government that have been used to slush funds, has been used to grab money for the black budget, but one of the ones we all know about is the mortgage fraud, and it's the one I know the best. So, I'm going to use that as sort of the case study today. The FHA funds were created in 1934 and and the mortgage fraud has been an incredible important sort of tool to literally do leverage buyouts of communities. You bring in the drugs, you bring in the mortgage fraud, and you literally engineer a leverage buyout of that community. You buy the community with its own cash flow and then because you devastate the place, you can pick it up cheap.

You buy it cheap with its own money. Um I want to talk about legal structure because legal structure is a very important part of how these things sort of uh how the hidden financial system sort of merged with the overt system and sort of blew up. I'm going to not talk a lot about covert operations and mention the most important thing now is the digital infrastructure. I am so glad Edward Snowden did what he did because now it now I start making sense to people. There is a matrix if you look at how the digital systems are being engineered.

There is a matrix and we are behind a one-way mirror and what they can see about us and what we can see about them you know they can see everything down to you know a penny in real time in extraordinary ways we can see nothing about them okay let's talk about the New York Federal Reserve um the New York Federal Reserve is the depository for the US government okay the um the Federal Reserve has a board of governors which is the policy group you basically see all the time. There are 12 member banks. Each member bank is owned by its members. I have written to every member bank uh is about 2,000. I wrote to everyone and I said um who owns you? What are the members who have stock and how much stock did they have? And uh and what contractors and corporations manage your digital databases and have access to that data? and do your member banks have access to that data and every one of the public affairs offices at all 12 Federal Reserve back wrote back and said that's confidential information.

Okay. But the the New York Fed is the mother of all member banks because it controls the bank accounts for the US government. It is the depository. Now it works through its member banks but those banks run the bank accounts and they finance the government. So the idea that the government is going to be able to seriously enforce against them, you know, is dreaming.

Have you if your entire if you're running a company and all your financing is dependent on your bank and they've got all your accounts, are you going to put them in jail? That's a tough one. They manage as agent the exchange stabilization uh fund. Very important. the exchange stabilization fund on on that management. They report directly to the secretary of the treasury, not to the bureaucracy.

All the files, all the records are kept at the New York Fed, but controlled by Treasury, but reporting to the secretary. So if you try and foyer, if you put in a freedom of information request either one and you ask for anything on the exchange stabilization fund, you know what you get? You get this. Okay? Very difficult. Yes, they publish financials. Do I believe them? Um, I'll never forget I had one reporter who was writing about narcotics trafficking in this country.

She came back from lunch with a very senior DE, retired DE a and she was very depressed. I said, "What happened?" And she said, he looked at me and he said at the beginning of lunch, "Look, all the wires batch and run through the New York Fed. They know where every dime is. That's how it works." Okay. Exchange stabilization fund.

Um, Dr. Dr. Frell mentioned a wonderful book by Chris Christopher Simpson called Blowback. Um it describes the Nazi loot being moved back into the exchange stabilization fund and Dulles who at that time CIA hadn't been created yet. Dulles sitting at Sullivan and Cromwell, the mother of all law firms on black budget stuff.

um sitting at Sullivan and Cromwell using the money in the exchange stabilization fund, the Nazi loot to rig the Italian elections in 1948 at the request of the Vatican. Great story, but it and I often say the history of the United States since then is a history of efforts by that group to replenish the slush funds. You know, every year it's like, okay, how do we get more? Okay, as I said, FHA was created by the National Housing Act in 1934. What it did was it basically put the federal government in control of the mortgage markets. We are a very socialized system and it's a system which is very important.

Before then, um if you were a bank in a community, you didn't want drugs and mortgage fraud coming in because then the neighborhood would deteriorate. You would lose money on your mortgage portfolio. Okay? But we cut the association between the local financial institutions and the health of the place because now you had a government guarantee on everything. So you could make money even if the place is going down. In fact, you could make more money if the place is going down.

Oliver uh North, it took me many years after I left the FHA. I ended up recording six 90-minute cassettes describing all the fraud that I cleaned up. I used to call myself the cleaning lady of financial fraud. and and um I went back to unpack all the different kinds of fraud and how they worked and one of the things I discovered was a quote from Oliver North who said HUD was the candy store of covert revenues which I assure you is absolutely true. Um the most famous expression, one of my partners from Dylan Reed had become secretary of the treasury.

And when I told him I was going to HUD as as assistant secretary of housing, he was outraged. He said, "You can't go to HUD. HUD is a sewer." So So they know. Okay. Okay.

So let's talk about legal structures. We discussed yesterday two important acts. National Security Act of 1947 and the CIA Act of 1949. Those two laws gave the government the ability to appropriate money to all the different agencies and then claw it back secretly for a black budget. Okay, very very important.

Um, one of the little known facts is during the period that Dr. Frell talked about yesterday, Eisenhower not only authorized the creation of Area 51, but in that legal authorization, he put the CIA in charge of security, which clearly turned into financing. Um, it's very interesting if you read uh the history of the drug dealing in Mino, Arkansas, um the lead drug dealer, Barry Seal, had in his log books that he would stop by, you know, deliver the guns down um down to Latin America. he'd bring the drugs back and he would stop by Area 51. And the researcher founded said, "Why would Barry Seal stop at Area 51?" I said, "He was dropping off the cash." Um, okay.

So, so again, we see the CIA getting into the business of providing security and financing for these black budget operations. Okay. Now, here's a very little known but unbelievably important fact. In when Reagan and Bush got elected, the deal that George HW Bush had made was that he would control the National Security Council and enforcement and intelligence. He had been the head of the CIA.

Remember when he became vice president? So we made the head of the secret, you know, when everybody always says, "Oh, well Putin was in charge of the KGB." I said, "Wait a minute. We made the head of the secret police the president long ago. I mean, this is a pattern." So, so one of his deals was he would control that line which is unbelievably invisible and very powerful to most taxpayers and citizens. So, so what he did was they passed they implemented an executive order that would allow them to use all the money in the government including the black budget money to pay private contractors to do highly classified work. Okay.

Now, what you're talking about is creating a mechanism that can deliver an can borrow an infinite amount of money globally, okay, and deliver all of that money to private corporations on a non-transparent basis to deal with the most powerful valuable technology in the world. Now, what do you think's going to happen? When I when I became assistant secretary, if you look, I see a very different government than you do because what I have to tell you, ladies and gentlemen, there is no government. To have a government, a government has to have information sovereignty and it has to have financial sovereignty. The United States government has neither. When you look at 21 agencies plus the military and intelligence agencies, what I see is five defense contractors who control all the databases in the collection of data and aggregate it into one one.

I have an article called the data beast. One databast. Okay. Now when I was at HUD, the largest contractor at HUD was Loheed Martin at that time in 1989 there paid $150 million a year to run the IT and payment systems. It later changed to ads, but they were there then.

And sure enough, if I needed data on my basic data on my on the subsidies and some of the things going on financially in my operation and I tried to get it from Locky, they would refuse to give it to me. I went back in several years later. Our company was hired on competitive contract to be the lead financial adviser. Same thing happened. Tried to get the core data I needed from Loheed Martin.

They wouldn't give it to me. Okay. So, as assistant secretary, I didn't have the power to get the most basic data from Loheed Martin about an operation which I'm legally responsible for. Okay. And that was 1989.

You can imagine what it's like now. Okay. Another another part of the legal structure which is important to understand. memorandum of understanding. A memorandum of understanding is something two or more agencies write to each other and it's kind of an informal understanding that has sort of the power of regulatory implementation.

the Department of Justice and the CIA subsequent to the contractors now being put in place, you know, at at at taxpayers's expense, they wrote a memorandum of understanding that said if the CIA noticed somebody dealing drugs and it wasn't a case officer, they didn't have to report it, which meant all the contractors working for them could deal drugs all day long and they didn't have to report it to the Department of Justice as a matter of law. Okay? And that was what came out during the Dark Alliance allegations and and I believe was very much a part of the impeachment of Bill Clinton because uh Congress said they were going to impeach Bill Clinton and Bill Clinton an hour or within the next 24 hours put the the memorandum of understanding up on the website with the inspector general's report on what had been going on which was in my opinion his message of saying you know you take me down I'll take down everybody. So sort of the nuclear transparency. Uh, another very important one I'm not going to talk to today, but some of the researchers here might be interested in memorandum of understanding between DoD and DOJ in 1994 on the application of non-lethal weapons and the prototyping of non-lethal weapons for domestic application. Okay, those are those little weapons that can implant thoughts in your mind and little things like that.

A very particularly gruesome area. Okay, I was part of a group of people in the first Bush administration who said, you know, there's been this incredible housing bubble, all this financial fraud. We need to make sure that this can't happen again. One of the things we're going to implement is actuarial stud studies requirements within the financials for um for agencies that do credit and insurance and require audited financial statements for every agency and and get chief financial officers for every agency. And so they did.

And guess what happened in 199495? They started a process where they reported why they couldn't produce financial statements, which is, believe it or not, going on to this day. They still can't. Okay, we're going to get into that. Um, but what it did do is it gave us a lot more information about how much money was missing. And finally, uh, I'm going to talk later about, uh, the sort of coupra of turning the financial system into something that's a very integrated basis.

Um, in the second Bush administration, the National Security Council was given a waiver power to wave the requirements for corporations doing government business to report their earnings according to SEC laws. Okay? So, all of the defense contractors, for example, could continue to operate in the stock market, in the bond market, in all the securities markets, and didn't have to have their financial statements be accurate. Okay. Okay. Covert operations.

One of the most important pieces of making this whole system go, you know, you can't buy everybody. Not everybody's motivated by money. Control files. Okay. You know, for many years, control files were things that were developed by covert operations in neighborhoods.

You remember uh Jaggar Hoover's Sturdy Pictures? Now, if the NSA can listen to everybody and everything and so see all your your financial transactions, etc., it's pretty easy to build a control file. When I was in uh when I was assistant secretary, there was one cabinet secretary used to say to me, you know, because I would refuse to do illegal orders. And after about the third refusal, he said to me, you know, I'm looking for the dirty pictures on you. I'm looking for your file. I said, you're not you're not going to find it.

um they have the power if they can't find anything on you to make it up, you know, and I spent 11 years and $6 million proving that they made it up. But not everybody's willing to spend 11 years and $6 million. So, um you know, if you don't have a control file, they'll just invent it. COINTELP Pro, we all know COINTELP Pro was a program that the FBI ran from 56 to 71 um where they planted agents and disinformation to try and stop groups who were organizing for a whole variety of purposes. I'm sure everybody in the room one way or another has dealt with the subsequent programs of which there are many.

Finally, um one of the things I'm not going to get in today, but there's a history. One of the things I want to tell you is if you have a job which touches on enormous amounts of financial fraud. I want you to think about moving to another job. Uh I'm not going to tell you that that it's wrong of you to do financial fraud. What I'm going to tell you is places that have a lot of data on financial fraud tend to blow up.

Okay? So, for example, when I was the FHA commissioner, when I was the FHA commissioner, you know, the black budget fraud in region six was the worst. When I um first got the placebased cash flow estimations that I had the accountants do once I had them move over to me, um I took a look at uh I got the ones for region six, which was included Texas and Arkansas. So, you had the Bushes and the Clintons in one region together. And I got the financials and I called the regional manager who was one of the best people we had in the whole system and I said, "Sam, guess how much money you lost last year?" He said, "Oh, I think we broke even." I said, "No, you lost 1.2 billion in region six last year. I'm flying down." So, uh, I many years later, we came back and we were hired as financial adviser.

One of the things we were doing was helping to auction off the defaulted mortgages. And uh we had to go into region six and get the do defaulted mortgages which were in Oklahoma City. They were in the Oklahoma those files were in the Oklahoma City. And before the sale, I thought, you know, this is this makes me uncomfortable because, you know, this is going to include all the defaulted loans from Arkansas and the Arkansas Housing Development uh uh agency, which at the time was rumored to have laundered the some of the money in in Arkansas. I said, "I'm I'm uncomfortable about this." Sure enough, we never got the files.

They blew up in the Muro building. Okay. If you study Barbara Hineer is here, one of the best researchers on 911. If you study 911, what you will discover is if you look at the financial documents that were in building 7, we're in the World Trade Center related to government securities fraud. We're in um uh the Pentagon.

You know, the Pentagon said right after it, well, I guess now we can't do all the, you know, we can't do the auto financial statements because our, you know, our accounting office blew up. um you know so so just remember be careful uh you don't want to stay too long near near near fraudulent or data about fraud okay the digital infrastructure um the digital infrastructure makes so much of this go because it makes it possible for you to centralize an unbelievable amount of stuff and do it through the systems without people realizing so there were 7,000 people working for me when I was assistant secretary of housing and I assure you the only guys who were in on the deal were a very few number of accountants and IT guys. I've gone back and kind of unpacked it. Um but this is what makes it go and part of it is because the government is run by private banks and private corporations and they are absolutely non-transparent and a lot of it is behind this national security law including the national security waiver. Um I cannot tell you how important the destruction and suppression of placebased financial statements like community wizard was.

So if you want to undo the trance between reality and the official reality, one thing you can do is network within your place and start to figure out how the money works and where the opportunity is to reverse it because the opportunities to build new income and and jobs both small business and entrepreneurs is incredible. And get the real estate the value of the real estate up. Um very important PowerPoint centralized control of payments and systems. I'm always having fights with financial people who say, "Oh, the the US dollar is going to crash tomorrow and the Chinese currency is going to take." That's ridiculous. The Chinese don't have a global satellite system.

You know, the backbone for the financial system are cables that run under the ocean, clearing systems, the internet, which are more and more moving onto the internet platform and the satellites. Okay? So, he who controls the sea lane and the satellite lanes controls the global currency. Okay? Now you need more and more violence to do that and we've used plenty up till now. Um but that's why you see in in in action you know in reaction to the Snowden revelations you see more and more people saying uh you know Brazil Putin saying we're going to we're going to set up our own clearing and payment systems. We want to be able to clear and do transactions around this system.

And it's not just the dollar. It's around those payment systems. Um when the sanctions started, everybody was talking about Putin can't buy a Coke with a visa in Moscow without the CIA knowing it within, you know, 10 seconds. And in fact, that's true. And so you see you see Putin now passing legislation so he can set up local payment systems and Vis and Mastercard, etc.

can't do that. um globalized satellite systems over the next 10 years. One of the reasons you're seeing so much emphasis on encouraging people to get interested in space is the competition is as financial transactions in the global currency moves onto the internet platform. Um the squabble and the issues over managing the suborbital platform are going to be enormous. Okay? And so space is going to get unbelievably important in the overt economy.

Uh not to mention what's going on in the covert. And of course we know um with the Patriot Act, smartphones, cell towers, the internet of things, everything is getting much more invasive. The one-way mirror. Okay, this is my favorite. We do we have a cartoonist who makes cartoons to help us laugh about these things.

This is my favorite cartoon that he ever made. We have a UFO that says Lockheed Martian. You know, we're kind of picking on Lockheed today. I apologize the guys at Lockheed because, you know, there there many other companies. And on this side, we say, "We convene this hearing to investigate the loss of $4 trillion the Department of Defense has somehow misplaced.

Mr. Secretary, pass out the DoD's ledgers." And he says, "Mr. Chairman, wouldn't you know it, but it appears a UFO has abducted our accountant in all the files." That's no, that's next. You watch that's coming. Okay.

So, um, I was sitting with my attorney in 1998 or 1999 or let me step back. In 1997, I had a subsidiary of my company and we had an advisory board of the top pension fund managers in the country and we were they were helping us try and figure out how we could re-engineer government money and dramatically improve the productivity in the US economy. And one of our goals was to make sure that we can improve the performance of the retirement funds so that the baby boomers could afford to retire because the pension funds had made had made a great deal of promises. And the question was how can they make how can they achieve the performance they need to provide for those retirements and we felt that if you re-engineered government money by place 3100 counties you could get dramatic improvements in both performance and wealth. So they were helping us and um we kind of felt I thought we had figured it out and I came and made this presentation about here's what we do and here's how we do.

We had taken it to OM. OM loved it. And the head of the largest pension fund in the country, Kalpers. Anybody here a beneficiary of Kalpers? Okay. California.

Largest pension fund in the country. California public employees. The head of Kalpers frozen. He said, "You don't understand. It's too late.

They've given up on the country. They're moving all the money out starting in the fall. They're moving it to Asia." Now, I thought what he meant was they had implemented the World Trade Organization. They were bal rebalancing the global economy. You know, we're going to outsource a lot and and I thought he meant the pension funds were going to reallocate to the emerging market, which is the right thing to do because that's where the growth was going to be much higher growth rate.

So, I thought he meant they were going to reallocate the overt money. What I now believe he meant was in 1995 when they couldn't get a budget deal, they said that's it. the politics of this place are hopeless. We're going to stop trying to come up with a legal solution. We're just pulling the money.

We're getting out and we're going to let them stew in their own juices when all the money's gone, which is essentially what happened. Now, I got clued into this. The next year, I'm reading I'm sitting with my attorney who's reading the HUD financial statements. I'm litigating with HUD and the Department of Justice, and she says, "Oh my god, I just looked at the HUD financial statements. They still haven't produced audited financial statements, but what they disclose is they had $59 billion of undocumentable adjustments.

That's more than 100% of their appropriations that year. Remember, you're running a huge at that point, they had about 400 or 500 billion in a mortgage insurance fund. Huge. So we started to look and notice that that we were getting reports from around the government that literally trillions of dollars was going missing. So I I teamed up with a reporter in Washington, fabulous investigative reporter named Kelly Amir.

And Kelly began to write stories about this in Insight magazine, which is a magazine that gets delivered to every congressman and senator's office once a week. So this is not something they miss. So she wrote, "Why is 59 billion missing from HUD?" Cuomo leaves HUD in shambles. Okay. All of this was going on under Cuomo, including the engineering, the housing bubble.

He's now the governor of New York. He's high in the polls. So crime pays. Okay. The cabinet inside HUD's financial fiasco.

A financial fiasco in the making. Rumsfeld. So we get into DoD. Money missing from DoD. Okay.

So, we finally decide to take all this information and wrap it up into a huge cover story. She's got full support from the editor. I do calculations that show, you know, people in Tennessee are losing, you know, $5,000 per person. We do all these per person charts and graphs and everything. And I said to Kelly on September 9th, 2001, Sunday, the story was going to hit Congress's desks on Friday.

So, that was 12, 13, 14, about the 15th, it would land on their desk. I said, you know, nothing is going to stop this story from going mainstream now. Big mistake. And so we all know what happened on 911, including blowing up the largest uh the largest dealer of government securities, Caner Fitzgerald, at the top of one of the World Trade Centers. When the article came out, it was delayed.

It came out two, three weeks later. Nobody noticed. They were too busy getting more money from HUD. One of the things Kelly tried to do, pushed very hard to get the controller of the currency um to publish the contracting budgets. Who's managing this? Because I assure you, you can always get the money back if you can hold the contractors responsible.

Um it went on and on and on for years, but let me give you a sense of what it looks like. Pentagon. The day before 911, Secretary of Defense Donald Rumsfeld declared war. Not on foreign terrorists. The adversary is closer to home.

It's the Pentagon bureaucracy. He said money wasted by the military poses a serious threat. In fact, it could be said that it's a matter of life and death. Rumsfeld promised change. But the next day, the world changed.

And in the rush to fund the war on terrorism, the war on waste seems to have been forgotten. My 03 but it's doing this again. So, I'm going to run all the videos in one from the hard drive. Pentagon. The day before 911, Secretary of Defense Donald Rumsfeld declared war, not on foreign terrorists.

The adversary is closer to home. It's the Pentagon bureaucracy. He said money wasted by the military poses a serious threat. In fact, it could be said that it's a matter of life and death. Rumsfeld promised change.

But the next day, the world changed. And in the rush to fund the war on terrorism, the war on waste seems to have been forgotten. My 03 budget calls for more than 48 billion in new defense spending. More money for the Pentagon when its own auditors admit the military cannot account for 25% of what it already spends. According to some estimates, we cannot track $2.3 trillion in transactions.

2.3 trillion with a T. That's $8,000 for every man, woman, and child in America. First question. My second question, Mr. Secretary, according to the controller general of the United States, there are serious financial pro management problems at the Pentagon to which Mr.

Cooper alluded. Fiscal year 1999, 2.3 trillion missing. Fiscal year 2000, 1.1 trillion missing. and DoD is the number one reason why the government can't balance its checkbook. The Pentagon has claimed year after year that the reason it can't account for the money is because its computers don't communicate with each other.

My second question, Mr. Secretary, is who has the contracts today to make those systems communicate with each other? How long have they had those contracts and how much have the taxpayers paid for them? Finally, Mr. Secretary, after the last hearing, I thought that my office was promised a written response to my question regarding the four war games on September 11th. I have not yet received that response, but would like for you to respond to the questions that I've put to you today, and then I do expect the written response to my previous question hopefully by the end of the week. Question, please.

the um the second question uh I've forgotten what the second question was. I think Miss Jonas knows it. Okay. Uh thank you uh Miss McKenna. I appreciate the question.

I appreciate your interest in uh our department's financial condition and uh we are working very hard on that program. I've just come back uh recently this I understand that you're working hard on it, but my question was who has the contract? How long has that have they had that contract and how much money have we spent on it? In general, we spend about $20 billion in the department on information technology systems. Uh the uh the accounting uh systems are part of that. I can get you the exact number for the record of what we spend on our current what we call legacy systems uh and those that we're moving toward. And who has the contracts? Uh that that would be a multitude of of individuals that Could you name some please? Uh well, I think off the top of the uh my head Well, I would rather not.

I'd rather provide that for the record. That's not privileged information, is it? I'm sure it's not. Well, please. And we still have time, so please. I would be glad to provide for the record.

I don't want to talk my scope is hard to imagine. I'm going to skip ahead and show you the other videos just so we don't have technical problems. But you can see um you can you begin to see the magnitude in the year the Pentagon lost one uh 2.3 trillion and then the following year 1.1 trillion. Uh during those years the American people probably paid in taxes approximately 1.6 trillion. Okay.

So you're talking about the Pentagon not only losing many multiples of its entire budget but many multiples of the entire government's budget. Okay, in two years. Remember that's in the period when they're moving all the money out of the country. Okay, so let's keep going. We're going towards joining us now to help us figure out what this all means.

Congressman, thank you very much for joining us for happy hour. I saw you quote it uh kind of you you're using the analogy to the birth of Christ that we wouldn't have spent as much money uh since his birth that this uh big old bailout. Uh very interesting to come up with that. Well, it's even worse than that. It's if we spent a million dollars a day every day since the birth of Christ, we wouldn't get to $1 trillion certain and we're likely to lose far more than that.

You know, the having 23.7 trillion dollars at risk basically is about one and a half times all the money that every man, woman, and child in America produces. The entire gross domestic products, only about 17 trillion. So, this is an amazing amount of money at risk. And it's okay to have it at risk in order to get America moving again. What's not okay is what we're going to hear from the I the special IG tomorrow, which is he's being locked out of any kind of oversight, reporting, transparency, all the things we were promised.

He's missing Ed is this. We had Okay. So, he was just talking about the bailouts that Treasury did during the financial crisis. So, um Cynthia McKenna testimony I think was around 2003 2004. We move up a couple years to the bailout period and we have Treasury do an incredible amount of bailouts, but we also have the Federal Reserve in on the game.

So, we have Representative Grayson. Tragedy, an economic disaster that took place barely a year ago. In the last 18 months of the Bush administration, America lost $12 trillion on its net worth. That's $40,000. $40,000 for every man, woman, and child in this country.

And I cannot think of a single person who's held this responsible for that. Nobody in government, nobody on Wall Street, nobody nowhere. That's the fundamental problem right now. And if people on Wall Street are going to continue to get great bonuses in good times and in bad times, we can kiss this economy goodbye. It's not going to work.

In capitalism, winners have to win and losers have to lose. And nobody's been held responsible for that enormous erosion. 20% of our accumulated wealth over the course of two centuries gone in 18 months. Nobody's been punished for that. That's the problem.

Altogether, $26 trillion of bailouts just in those two categories, not including TARP, not including FDIC financing of US institutions. $26 trillion. That's almost $100,000 for every man, woman, and child in America. All done by the Federal Reserve without any act of Congress authorizing it. All right.

There's a lot of numbers thrown around here and sometimes when you just hear it abstractly 13 billion sounds like it's larger than 7 trillion. Which of all of these numbers which outrages you the most and which should outrage the public the most? I think that the we can all agree the trillions of dollars the trillions of dollars that were extended by the Federal Reserve to the banks in a form of corporate welfare. What they did is they took our money, the US dollar, the fact that they control the currency, the fact that they have control of the money supply, and for the first time in history, and I'm talking about in the 100year history of the Federal Reserve, they played favorites. They said, "We'll give a 100red trillion to this institution, 100 sorry, 100 billion to this institution, another 100red billion to this institution, and so on down the line." When you and I couldn't even come close to accessing those that kind of money on those terms. They lent out this money at 0.01% interest.

0.01% interest. Go try to get a loan like that from your bank. Bloomberg's report that there are trillions of dollars in offbalance sheets transactions that the Federal Reserve has entered into since last September. Are you familiar with those offbalance sheet transactions? You know, I I think it may be um important at this point too just to bring up um a certain aspect related to our jurisdiction. And just to to clarify perhaps some of my earlier uh comments, we are the inspector general for the board of governors and we have direct oversight over board programs and operations and are also able to look at board delegated function to the reserve banks as well as um its o the board's oversight and supervision of the reserve banks.

We do not have jurisdiction to directly go out and and audit reserve bank activities. Okay. So, what she just said is if the exchange stabilization fund and the New York Fed are using the federal credit and all sorts of slush funds to manipulate the markets and send enormous amounts of money abroad to foreign banks. That's outside of our scope. Anyway, okay.

So, back to the missing money. I'm still chasing the missing money. A group of us, including a wonderful entrepreneur in the audience today, put together a website to kind of bring uh transparency to the missing money, including the government documents and audits. And you know, we had a little counter that counts up, you know, how fast uh you know, how how fast you can lose 1.1 trillion in a year. And we showed you in terms of other governmental programs, you know, what that money could buy.

Um, and we got a fair amount of signatures, but I'll never forget one lovely relative that I had said to me,"Well, you know, dear, that's your issue, missing money. You know, I'm interested in peace. I'm not interested in missing money. That's your issue." And I said, "Don't you understand? If somebody can can can steal $4 trillion from the federal government in four years, they control everything." So that, you know, if you care about peace, that is your issue. So, um, let's go.

Okay, so this finally ended up with me up at a conference in the Yukon in 2005 where I was trying to explain the fact that over four trillion dollars was documented as being missing from HUD, DoD, and NASA. NASA I think had 500 trillion one year. I mean 500 500 billion one year. Um and and the you know the financial luminaries gathered couldn't believe me. They just couldn't believe that there was that much fraud and they didn't know about it.

Okay, it's very that's very offputting to financial people. Um well, one of them several months later said, "Oh my god, you're not going to believe this. The Financial Times is supporting you. It turns out some somebody sat down and figured out, okay, how much do foreigners, you know, how much have foreigners lent to the United States and how much do they have on their balance sheet? And then how much do the Americans say they owe foreigners on their balance sheet?" And it turns out there was a huge missing hole. So, let me explain how that could happen.

Um, when I was running Hamilton Securities Group, uh, one of the people who worked for me had worked for a very important, uh, senator on the finance staff. And she came to me and she said, "This guy is lobbing the senator. He he wants a meeting with you." So, finally, I relented. And this guy comes in. He's a mortgage banker.

He has little wire glasses on. And he says, "You know, uh, I'm so glad, you know, thank you for meeting with me. He had a huge piece of paper. He says, "I bought you a copy of my database." Um, he said, "My family since the 20s or the 30s has been running a mortgage banking business and our core competency is we keep a record of all FHA mortgages and Ginnie May securities or related securities related to FHA mortgages." He said, "I brought you a copy of my database." I was like, "Oh my god." And he says, he said, "There's been a terrible mistake. These new financial statements came out.

Remember how to just produce financial statements? these new financial statements came out and there's a terrible error. It says there's 400 billion outstanding. He said the actual amount outstanding from FHA and GMA is many many multiples of that. Well, I thought the guy was nuts. I was just like trying to get him out of the office because what he was saying was the Department of Justice, the Department of Treasury, HUD, the New York Fed, and the governors of the Federal Reserve were engaged in massive government securities fraud.

Massive. But that's how you get that black hole. Now, you know, now I do believe that that in fact he was right. And I probably if I take the database, my building would have been blown up. Okay.

So, so that's the missing money. $4 trillion is my estimate. I'm sure there's more, but that's the only government documents I found. We just didn't have time to go through them all. Okay.

The next thing that happens is we get a pump and dump of the stock market. Everybody remember the tech bubble? Okay. So, I'm out at Esther Dyson's conference in 1997 and suddenly all these venture capitalists show up and they are trying to give money to entrepreneurs. They're taking entrepreneurs with products and services that are never going to work. It's quite obvious.

And the entrepreneurs saying, "I need 25,000. I need 50,000. I need 100,000." They say, "We only do a deal if you take 10 million." I'm like, you know, "Is this trading sardines?" Well, sure enough, they were. They were trading sardines. They ran them up, sold them into the pension funds for $150 million to retail investors and then boom, pump and dump.

You make money going up and you make money going down. My estimate was, you know, during this whole process, many, many trillions more. Okay? And don't think, PS, that technology being re-engineered out of the black budget didn't have something to do with what was going on in terms of inspiring that that pump and dump. Okay. Then we move to the bailouts.

So, it's really amazing. I just had uh Steve Roach, wonderful for for many decades, the economist at the Mor at Morgan Stanley, absolutely impeccable guy, great research. He just wrote a book called Unbalanced, which one of the best books on the ChinaAmerican relationship I've read currently. And and you know, people will tell you, why did no one warn us? Steve Ro top of Morgan Stanley is warning everybody. Okay? Many many people warned us about what was happening.

um we we will never probably know what the total cost of the bailouts are. And part of it is between what the Fed did and the Treasury did, some of that money was essentially gifts and some of that money were loans at low interest rates. And there's all sorts of games. You can see you see the government saying we got paid back. If I lent you money at 0.01% for 10 years, do you think you could make a little bit of money on it while that was going on? I mean it's especially when the you know they're giving you inside information about how they're rigging the market.

So um my guess is between the missing money the pump and dump of the stock market and the bailouts including what the Federal Reserve has done um my estimate is during that period the financial coup d'etata I call it $40 trillion got transferred over into this hidden system. Okay. Okay. And of course the the Federal Reserve is very important. I think the Federal Reserve is having a shredding party.

You know, they say they're buying bonds from the banks, but I think they're buying Treasury securities and mortgage securities, a lot of which were probably illegally or or secretly issued. And you know, if they had to trade in the market, they'd be worth 10 cents or less on the dollar. It's my guess. Okay, this is But you see the Fed balance sheet is exploding with treasuries and securities. Okay, so we heard from Grayson.

It keeps going. Iraq missing money. We just uh since this conference is sponsored by wonderful people from Holland uh very courageous woman her uh it's called the Dutch National Court of Auditors. The head of the Dutch National Court of Auditors just pointed out that there billions of dollars at NATO unaccounted for. Can we be surprised? Okay.

Uh latest report uh in uh November 2013. the undocumentable transactions at the Pentagon apparently are now up to 8.5 trillion dollars. Okay, so my $40 trillion didn't include about four and a half trillion of that and didn't include what's going missing in Iraq and what's going missing NATO other things. Okay, and finally the coupra. We have the ability to give private corporations who are using who are using all of this money to control and build the most powerful technology in the world the ability to wave SEC rules.

Okay, so they can continue to trade the market. Here's Loheed Martin stock. You notice coming into 9/11, they started to fall. Suddenly 9/11 happens. You know, happy times are here today.

This green line is the S&P. Now, we've heard tremendous amounts about defense cuts, sequester. Will it hurt the foreign contractors? I will it hurt the defend contractors. I would submit to you that if you move $40 billion, $40 trillion out of these different legal systems and into a new system that you could earn enough money, dividends, and interest to pay the ongoing costs of a global government. So, one of my questions is as the defense contractor stocks continue to go up, you know, is that what happened? Do they now have, you know, it's not just the intelligence agencies.

Does the whole military-industrial complex now have complete financial independent? Are they fully endowed to run a very different kind of governance system? Has government just been privatized on the just do it basis? Okay. Um, to give you a little indication where this was going, I thought they would use a lot of the money to clean up the mortgage fraud. It appears that that is not the case. I may have been wrong. We have a new announcement that the central banks now own 29 trillion in market investments including gold and our major players in the equity markets.

I'm not going to talk about it today, but one of my beliefs about what's going to come next is the possibility of what's called a crash up in the stock market. We flip the planet. Now that we've used the debt to steal all the money, we flip the planet to an equitybased model. Something in fact that could be a good thing. So let's step back and look at the financial coup deta and then bring it back to the secret space program.

I think you know that before the financial coup happened and before the rebalancing of the global economy with the world trade organization we had in the G7 we had in the developed world the governments we had a lot of assets in in communities at the municipal level we had a lot of assets in the retirement systems we had a lot of of assets um in the governments. So here we have the blue is liabilities and I'm just guessing this isn't back of the envelope. We have liabilities and we have assets and we have more assets than we are liabilities. We go through a process where we move all the liabilities back into the old systems. This is like bringing up new systems.

We move all the liabilities into the old systems and we shift a lot of the assets into what we are calling today the breakaway civilization. Remember when I said we had a leverage buyout of the planet. So you move, you say, "Okay, well, I give up on this system. I'm bringing up a new system. You know, it's grown from this hidden financial system.

I'm bringing it up. I'm going to move the assets over." And you know, I'm looking at these guys and we have all these people in the developed world in Europe and the United States have worked their whole life. Japan, the G7 has worked their whole life and they expect all these retirement homes and nursing homes. before we spend that money on retirement homes and nursing homes, let's get it out and move it over here and privatize the system. So, we move the liabilities back in there.

We move the assets over here. Meanwhile, you go to financial conferences, everybody is running around saying the system's going to collapse. Now, you know, I've been odd man out in the financial system because for 10 years, I said, "No, it's not. It's not going to collapse. It's going to slow burn." And when they say to me, "How do you know it's going to slow burn? You know, last year you were right.

We thought it was going to collapse and it didn't slow burn. How are you right? I try and talk to them about why I think it's going to slowburn and they say I'm not going there. I'm not going to talk about UFOs. I'm not going to talk about digital information systems being able to listen to me, you know, when I'm on the internet. I'm not going to go there.

The reality is I go back to the planetary balance sheet. If the entire global financial system is organized to produce a tide that's going whether it's going to the breakaway civilization, whether it's going to the black budget, but it's behind this big question mark, you know, if if our households and our money is being drained, our time is being drained, we have to go there. Okay. So the according o OECD just did a very good study on sort of overt economy space investment. The G7 is spending $53 billion a year on space.

United States is the biggest piece. 43 um billion dollars a year. I expect that budget to go up a lot. Um but much more done on the private side in terms of operations and implementation. Um, but clearly if you listen to the wonderful presentations we got yesterday, if you've looked at Donald Rumfeld saying there's 2.3 trillion million going missing, you know, in one year, the magnitude of what we are spending is far beyond 53 billion a year.

It is enormous. Okay, we're coming into an election season in the United States and what all the political pundits will tell you is the number one issue is inequality. Where does inequality come from? It comes through the black budget. Now, is it because we're dealing with forces out there and this is the responsible thing to do? Is it because everybody's just stealing money so they can build planes and go to Mar? I don't I can't tell you. You have to listen to the many wonderful speakers who are here.

What I will tell you is that if you look at how the money works in every household and in every neighborhood in America, in every municipality, in every state hall, the black budget is the source of inequality. We have a centralized system and it is taking the most powerful technology financed by the taxpayer and shifting it into private hands without, you know, it's sending the liabilities in, but it's taking the assets. So, we have a systematic skim of advanced technology and assets. We are creating private endowments with our resources that we don't own or control. One-way mirror.

But most important, the power of this group is they have the ability to kill with impunity. And when it comes down to a food fight, you know, if you look at all the Congress people, and there many, many great government leaders who've tried to do something about this, you know, and they are concerned for their safety and the safety of their families. So, one of the issues about real solutions is how do we support them in a way that's effective? Okay. Declaration of Independence, one of my favorite pieces of the law in this country. We hold these truths to be self-evident.

All men are created equal. They are endowed by their creator with certain unaliable rights. Our freedom comes to us by divine authority. Okay? Unfortunately, the creator did not send enforcement that we could trust. We have to be the enforcement.

Okay? Now, I will tell you as a financial matter because that's my beat. That's what I care about. The Securities Act of 1934 passed uh uh or one of the rules that promagates that that you have beaten into you when you are on Wall Street is something called rule 10B5. And let me read it to you. Rule 10B5 promagated under the Securities Exchange Act of 1934 makes it unlawful for any person in connection with the purchase or sale of any security, let me skip to B, to make any untrue statement of a material fact or to admit to state a material fact necessary in order to make the statements made in the light of the circumstances under which they are made not misleading.

Now, let me tell you what that gibberish means. What that means is if I ask you to put money in something, whether it's a college education or a house or anything else, I am obligated under the law to tell you anything that could impact your assessment of opportunities and risks. If I ask you to buy a house in a in a it's not a security. So, let's If I ask you to buy a bond that finances a municipality and I don't tell you that I know that black budget narcotics trafficking is about to wreck the value of that house or or and the value of that bond, you know, that is a violation 10B5. I can go to jail as an investment bank or an investment advisor for doing that.

What I have to tell you is with the financial coup d'eta and the integration of that hidden system in the over financial system, we have reached a point where we have to go there. We have to look at these issues and I commend you for being here today because you are the people who have had the courage to do this both in the audience and watching over the live stream. You are willing to go there and we have to go there if we're going to start to bring reality and official reality back into something that doesn't give me a headache. Okay. Um, it is a material omission not to look at this and and you need to start quietly in whatever way works for you to help the people in your life begin to to deal with that.

Okay. What can I do? There are millions of things we can do. What you need to do is to reverse the drain in your life. Okay. You are being drained by the black budget.

Okay? You are being drained by this gap between reality and official reality. And the first step is simply to reverse the drain in your life. It's just like they tell you on the planes, put your own oxygen mask on first because you need more oxygen and then you can help the guy sitting next to you. Okay? And one of the things people always say, I have no time. So I just have to show you this because this is my bigoo.

Um, when I was on Wall Street in 1988 84, interesting year to have this happen, I overheard a conversation I wasn't supposed to hear about entrainment subliminal programming being rolled out on TV. We have a wonderful salary report on entrainment technology with um, Adam Trombli and I strongly suggest to anybody that they sort of understand this stuff. But um, the latest numbers just came out cover Wall Street Journal last week or the week before. Um, the average American now watches 10 minutes more of TV every day. Two hours 46 minutes.

Uh, this is San Monteo County. In the census at 2010, there were two there were 720,000 people in San Mo. That means if that if that number is correct, that means the average person in San Mo watches a,000 hours a year of television. uh San Mateo with a population of 720,000 uh threequarters of a trillion hours a year watching TV that is the equivalent in the government of 363 full-time staff equivalent okay so do me a favor take an hour a two hours a couple of hours out of your TV watching time and say how can I use this time given what I learned at this conference to shift and stop the drain in my life. Think of it like a parasite.

Sometimes I call the system the tapeworm. You know, stop feeding the tapeworm and stop feeding the tapeworm in a way that protects your time and money so you start to get more energy. Um there's a very famous situation I once accosted a congressman from Tennessee at a a town hall meeting. I love to go to town hall meetings and talk to Congress people including the good ones because there's some wonderful Congress people who tried very hard to do something about this. And uh it was right after 9/11 and I said to him, you know, there's 3.3 trillion missing from the Department of Defense.

And he was on the appropriations and the budget committee. And you know what he said in front of all my neighbors? He said, "Yes, I know." A light one. I mean, you should have seen my neighbors. They're like, cuz where I come from, you know, a dollar is a lot of money. Our average income in my county is $24,000 a year.

So 3.3 trillion is a lot of money. Um, so he said, 'Yes, I know. And I said, 'What are you doing about it? And he looked at me stunned. Remember, he's on the appropriations and budget committee. He said,"Nothing.

There's nothing I can do." Okay. So, I wrote a long letter to his office describing all the different things he could do. And I'll make sure we put it up on the salari report blog. So just in case you happen to go to a town hall meeting, if you have a congressperson who's not good on this issue, you know, or who is not working to provide financial statements to you for your congressional district, you can use that information to push them. We can have a lot of fun during this campaign because inequality is going to be an issue and you understand where it comes from.

Um, if it's somebody who's really supportive, get down there. If you have Marcy Captor as your congressperson, if you have Alan Grayson, you know, too bad we lost Cynthia McKini. Um, if you have somebody who's really great on this issue, you need to say, "How can I help you? How can I make it possible for you to raise money as an honest congressperson? How can I help you get elected?" Um, I assure you, if you take a look at the mortgage fraud in your community, you will see a lot of interesting patterns. This is Washington DC, New Orleans. It just happened that all the areas that got wrecked by the by the hurricane and the flooding in New Orleans just happened to clear out a lot of that mortgage fraud.

Um, finally, I want to recommend to you one of the books that most of informs real solutions. It's called, it's by Robert Axelrod, brilliant economist at the University of Michigan. It's called The Evolution of Cooperation. And one of the things he says is peace makes more money. uh pieces of winning economic strategy in a world where there's transparency, but transparency of people's behavior.

If somebody can go to Hong Kong, do something dirty, and come back and still be, you know, socially respectable. I have an article called what women can do to help the popsicle index go up. And what I basically say is, okay, ladies, if tomorrow everybody doing anything evil, stealing our money, hurting people, committing genocide, got shut off, no sex, the ladies wouldn't give them sex. Liss Stratus, we all remember what the Greeks did. What would happen, right? Okay.

So, so where we can bring transparency to individual actors, shunning and shaming is the most powerful social tool in the whole world. You know, we can begin to shift this particularly if we invite them to switch teams. This is a campaign. We want them to switch to our team. Um this was a cartoon.

I teamed up with a firm in uh money management firm in London, research firm in London where we would do they would do cartoons, we do cartoons and this Larry report. This was Mr. Global. Um this came this is a wonderful uh a wonderful story. The uh KPFA radio I did a whole series.

I was looking for the missing money that was disappearing from HUD and from the Department of Defense. So I'm thinking how could they launder $4 trillion? You know that's a lot. You can't launder that through a pizza restaurant. Okay. So, how could they, you know, what's the nuts and bolts of how they could launder this $4 trillion? So, I find Enron and here's this company who can't explain what they do other than it's very creative and innovative and they've got huge revenues.

And if you looked at their board, everybody sitting on their board were also the contractors running the agencies where the money was going missing. So, I thought, well, this is very interesting. Anyway, so I'm researching this. Dennis Bernstein from KPFA radio calls me up and said, "Would you do a show on Enron?" And one of the things I was able to describe on Enron because at that point I had gotten the outward bound version of a PhD in civil procedures and civil litigation on financial fraud with the Department of Justice, you know, being in litigation with them for 11 years. So I knew, you know, every excuse.

I knew every story. I knew what was supposed to be, how they did things, what they could do if they were willing to break the law, which apparently they were. And what I was able to explain was if you look at all the things that are automatically in the manual to do in a case of financial fraud, the Department of Justice hadn't done any. So for example, we saw the Cayman Islands, there were 700 subsidiaries in the Cayman Islands on Enron. We saw the head of the Treasury in the Cayman Islands come out and give a press release and say they would be delighted to to cooperate with the Department of Justice on the financial records on the 700 subsidi subsidiaries, but they had never gotten a phone call or request or a subpoena.

So they couldn't cooperate because no one was calling them. So anyway, but I was able to prove that the contractors who ran the systems for the enforcement at the SEC and the Department of Justice had asserted control of the Department of Justice and SEC systems and were owned and operated by the people sitting on the board at Enron. So even though the Department of Justice and the SEC had not asserted control of Enron's records, the board members of Enron had asserted control of the enforcement records at the Department of Justice and the SEC. So this was the Mr. Global cartoon.

And interestingly enough, the fellow highlighted here um shortly thereafter was when Bob Rubin left the administration and went back to uh running the Harvard endowment. He put out a press release saying that guy had just resigned from the board. I suspect you learned about it in the press. Okay, breakaway. I always finish the salary report with uh with this one statement because before we can be free, our minds must be free.

Okay, it starts with me. My greatest moment on the salary report was uh Bill Tiller, if you haven't heard him, he used to run material sciences at Stanford. Um and he was telling me about the power we have with our intention to change material reality. And I said, "Oh, Bill, what do you I'm very interested in community prayer." I said, "What do you think of community prayer?" And he said, "Well, you have to be very careful." He said, "If the people doing the praying are coherent, it can help. If they're not, it makes it worse." So I said, "Oh, you know, I have to be more coherent." So whatever you do, do it.

Oh, I lost it. In a way, you do it. Uh, so each one of us do it in a way that makes you coherent. But I'll end with the line that I end every solaria report. Don't worry about whether or not there is a conspiracy.

If you're not in a conspiracy, you need to start one. Ladies and gentlemen, thank you very much. Okay.