Re: The Fed's Cancellation of M3
TO THE SOLARI ACTION NETWORK
November 25, 2005
A Note from Catherine Austin Fitts From: http://www.solariactionnetwork.com/phpBB2/viewtopic.php?p=9790#9790
I have been asked by several network members to comment on the cancellation by the Federal Reserve of the publication of
its broadest series of aggregate monetary statistics, known as "M3."
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Discontinuance of M3
On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary
aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase
agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a
memorandum item in this release.
Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts
(Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).
Last update: November 10, 2005
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In a nutshell, here are my thoughts:
1. The twelve federal reserve banks -- that together run the bank clearing and currency system -- are privately owned.
If you call them up and write to them -- as I once did-- and ask who owns them, who manages their data and whether or
not their owners have access to their data, you will be told that this is private information. Fed bank data is arguably
the most valuable databank in the world.
2. The flagship Federal Reserve bank is the NY Fed. The NY Fed is the depository for the US government and manager of a
powerful slush fund -- the Exchange Stabilization Fund.
3. Significant efforts have been made to ensure that citizens do not have easy access to data about how all the
government revenues and expenditures, credit and regulations work within the areas from which they vote for political
representation. In short, you do not get annual financial statements that document the most basic government financial
performance within your Congressional District. This means you have no basis for assessing performance or providing for
citizen based accountability.
4. What 1-3 in combination mean is that corporate profits and stock, mortgage and bond markets (and other capital
markets) can be invisibly rigged using taxpayer funded and backed resources in the form of government contracts,
subsidies, asset sales and transers, tax benefits, credit guarantees and market intervention and manipulation -- all in
a manner that perpetually increases the wealth of a few insiders and drains the many outsiders. This process steadily
lowers overall productivity by switching power and money from the productive to the unproductive.
5. There is over $4 trillion missing from US government agencies that we know about-- this is $14,000 per US resident --
who knows how much is missing in total. This disappearance was financed by presumably trillions in debt securities for
which the US government and government agencies are liable. As total debt outstanding explodes, it becomes more and more
challenging to refinance outstanding debt let alone issue more. Grossly oversimplified, our financial dependency on
other nations channeling greater and greater amounts of their total retirement savings to financing our military
expeditions and consumer purchases of their manufacturing output becomes ever more politically sensitive.
6. The way to keep the game going is for the Federal Reserve system to simply buy increasing amounts of debt issued by
the US government and for the US Treasury and Congress to use the proceeds to protect "insiders" from the resulting
inflation while squeezing everyone else while the NY Fed manages market interventions that help do the same.
7. The cancellation of M3 helps accomplish #6 by cancelling some of the statistics (particularly on "repos") that would
help market analysts see what is going on.
8. The Federal Reserve's explanation that this is a cost cutting move does not compute given the nature of the Federal
Reserves rich resources and the importance of transparency to the functioning of markets.
9. In short, a small group of people continue to use US government debt to finance a war machine to build and
consolidate global empire and to use inside information along with the US government budget and credit machines to
ensure that this war machine is richly profitable for them and their global allies while draining and depopulating
everyone and everything else.
10. The cancellation of m3 is Tapeworm Economics at its best.
For some useful pieces on the M3 cancellation, see:
For more recomended reading on the US banking system and actions you can take to do something about this, see Solari
Audio Seminar:
Where Would Jesus Bank?
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Catherine Austin Fitts is the President of Solari, Inc. http://www.solari.com/. Ms. Fitts is the former Assistant Secretary of Housing-Federal Housing Commissioner during the first Bush Administration, a former managing director and member of the board of directors of Dillon Read & Co. Inc. and President of The Hamilton Securities Group, Inc.