Catherine Austin Fitts: The Debt Model is DONE

This interview from August 2016 just appeared on my radar. In it, Catherine Austin Fitts discusses the future of the global economy and potential expansion into outer space. -Ed.


FRA Co-founder Gordon T. Long discusses with Catherine Austin-Fitts about the future of the global economy, along with providing insight on recent events and potential expansion into space.

Catherine is the president of Solari, Inc., publisher of the Solari Report, and managing member of Solari Investment Advisory Services, LLC. Catherine served as managing director and member of the board of directors of the Wall Street investment bank Dillon, Read & Co. Inc., as Assistant Secretary of Housing and Federal Housing Commissioner at the United States Department of Housing and Urban Development in the first Bush Administration, and was the president of Hamilton Securities Group, Inc. Catherine has designed and closed over $25 billion of transactions and investments to-date and has led portfolio and investment strategy for $300 billion of financial assets and liabilities.

Catherine graduated from the University of Pennsylvania (BA), the Wharton School (MBA) and studied Mandarin Chinese at the Chinese University of Hong Kong. She blogs for the Solari Report at solari.com.

GLOBAL DEBT FOR EQUITY GAIN

It’s equity for debt swap. Since WW2 we’ve been on the debt-growth model, growing the economy by issuing more government debt.

“We have literally evolved an infrastructure and a leadership of people who don’t understand or have never participated in markets.”

They don’t understand market economies; they don’t understand understand command and control economies. We’ve literally been living off debt growth, and that debt growth is slowing. Part of the challenge of being in a debt-based economy is that people get out of alignment. There’s no better example than what’s happening with student loans. We’re literally watching an entire industry make more money off their borrowers’ failure than their borrowers’ success.

When you’re integrating very complex equity at fantastic speeds, equity builds a much more aligned model between the parties. We’re definitely coming into a debt-for-equity swap worldwide.

A PERIOD OF INSTITUTIONAL REFORM: WHO LEADS?

We have two challenges: the leadership we developed over the last 50-70 years don’t know how to work in a world where capital is dear and you have to optimize, particularly fundamental economics. The other problem is that there are two ways to do an equity for debt swap: one is on a managed process where you realign bottom up, the other is where you write everything down.

“Are we going to crash out the equity markets or are we going to foreclose and bankrupt everybody? There’s two ways to go.”

 

Continued . . . Financial Repression Authority.

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