Bernard Lietaer (ehemaliger ZentralBanker Belgiens) Vision der Zukunft:

Wir werden gezwungen sein unser Geldsystem bis 2020 zu reformieren.


“The Economist” prophezeit eine (vermutlich rein digitale) Weltwährung – leider leider leider könnte uns das so verkauft werden wie den Euro – dass alles besser wird… eine tolle Idee… aber ist diese auch ehrlich gemeint und designed? Oder wiegen die Interessen einiger weniger Egoisten und deren Macht-Sucht wiedermal befriedigt werden muss mehr?

Man muss beim Lietaer Ansatz unterscheiden – er möchte eine Biodiversität an verschiedenen sich ergänzenden Währungen – ein Ökosystem – welches sich auch expandieren und exportieren und skalieren lässt – aber vermutlich keine einzelne alles dominierenden Welt-Währung…


The Rise of the Phoenix world currency from the ashes of national fiat currencies ie. destruction of fiat currencies via hyperinflation. “Phoenix” is of course an occult metaphor. Out of the destruction, the ashes of the old world order, the Luciferian New World Order will rise like a Phoenix!

download article: ArticleEconomist1988GetReadyforthePhoenix_001.pdf
Title of article: Get Ready for the Phoenix
Source: Economist; 01/9/88, Vol. 306, pp 9-10
THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.

At the beginning of 1988 this appears an outlandish prediction. Proposals for eventual monetary union proliferated five and ten years ago, but they hardly envisaged the setbacks of 1987. The governments of the big economies tried to move an inch or two towards a more managed system of exchange rates – a logical preliminary, it might seem, to radical monetary reform. For lack of co-operation in their underlying economic policies they bungled it horribly, and provoked the rise in interest rates that brought on the stock market crash of October. These events have chastened exchange-rate reformers. The market crash taught them that the pretence of policy co-operation can be worse than nothing, and that until real co-operation is feasible (i.e., until governments surrender some economic sovereignty) further attempts to peg currencies will flounder.

The new world economy
The biggest change in the world economy since the early 1970’s is that flows of money have replaced trade in goods as the force that drives exchange rates. as a result of the relentless integration of the world’s financial markets, differences in national economic policies can disturb interest rates (or expectations of future interest rates) only slightly, yet still call forth huge transfers of financial assets from one country to another. These transfers swamp the flow of trade revenues in their effect on the demand and supply for different currencies, and hence in their effect on exchange rates. As telecommunications technology continues to advance, these transactions will be cheaper and faster still. With unco-ordinated economic policies, currencies can get only more volatile.
In all these ways national economic boundaries are slowly dissolving. As the trend continues, the appeal of a currency union across at least the main industrial countries will seem irresistible to everybody except foreign-exchange traders and governments. In the phoenix zone, economic adjustment to shifts in relative prices would happen smoothly and automatically, rather as it does today between different regions within large economies (a brief on pages 74-75 explains how.) The absence of all currency risk would spur trade, investment and employment (not).

The phoenix zone would impose tight constraints on national governments. There would be no such thing, for instance, as a national monetary policy. The world phoenix supply would be fixed by a new central bank, descended perhaps from the IMF. The world inflation rate – and hence, within narrow margins, each national inflation rate- would be in its charge. Each country could use taxes and public spending to offset temporary falls in demand, but it would have to borrow rather than print money to finance its budget deficit. With no recourse to the inflation tax, governments and their creditors would be forced to judge their borrowing and lending plans more carefully than they do today. This means a big loss of economic sovereignty, but the trends that make the phoenix so appealing are taking that sovereignty away in any case. Even in a world of more-or-less floating exchange rates, individual governments have seen their policy independence checked by an unfriendly outside world.

As the next century approaches, the natural forces that are pushing the world towards economic integration will offer governments a broad choice. They can go with the flow, or they can build barricades. Preparing the way for the phoenix will mean fewer pretended agreements on policy and more real ones. It will mean allowing and then actively promoting the private-sector use of an international money alongside existing national monies. That would let people vote with their wallets for the eventual move to full currency union. The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today. In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power.
The alternative – to preserve policymaking autonomy- would involve a new proliferation of truly draconian controls on trade and capital flows. This course offers governments a splendid time. They could manage exchange-rate movements, deploy monetary and fiscal policy without inhibition, and tackle the resulting bursts of inflation with prices and incomes polices. It is a growth-crippling prospect. Pencil in the phoenix for around 2018, and welcome it when it comes. (not)

Admin Name: Morrison Bonpasse

Admin Organization:
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Admin City: Newcastle
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Home – Welcome to the Single Global Currency Association’s website

Morrison Bonpasse’s campaign for President is a limited campaign as the goal is to promote public awareness of issues important the the future of the United States and the world.


The initial campaign focus will be on New Hampshire, and its primary election on January 12, 2016, and then on to other New England States with primaries and caucuses.


The three primary issues for Bonpasse are:


1.  Justice: STOPPING and correcting Wrongful Convictions in the United States

Through improvements in the law enforcement and judicial systems, the U.S. must effectively correct and stop wrongful convictions by bringing them from the current level of approximately 2% to a level of .1% of convictions/inmates or fewer before the end of this decade.  These improvements would reduce the number of innocent inmates from approximately 30,000 in the U.S. to 1,500, which would still be a number too large.


2.  Environment: Global Warming – Population Stabilization (Zero Population Growth)

The U.S. should support programs to bring the U.S. and global birth rates down to the levels of  the death rates in order to bring population growth to ZPG (Zero Population Growth) as soon as possible, and then to continue to support lower birth rates to return the global population to an Earth-sustainable one billion.


3.  Economy: Global Economy – Single Global Currency

To enhance the stability of the global financial system and to reduce its cost, the United States should embrace the development of a Single Global Currency to replace the U.S. dollar.


For information about Bonpasse’s views on other issues, see “Issues and Views” on this website.


To Join the Association(FREE): Go To MEMBERSHIP/CONTRIBUTE

New material on site:

25 October 2015.   SGCA member Mohammed Ibrahim received his Phd. in August 2015.  A summary of his thesis is linked here:

The availability of reforming the performance of the global monetary system after the financial crisis (A Comparative Study)

The thesis supports the implementation of a Single Global Currency.

27 February 2015.  In the IMF Journal, “Finance and Development,” Kevin Hjortshoj O’Rourke wrote “Whither the Euro.”  See   “SGC Links – Articles – Academic”

27 January 2015.  Jimmy Zhou writes paper advocating WCC (World Calorie Currency.  See “SGC Links – Articles – Academic”

1 January 2015. Lithuania joins European Monetary Union, bringing membership to 19.

1 July 2014.  Journal of Economic Literature annotation in June 2014 issue for 2014 Edition of book, The Single Global Currency – Common Cents for the World.  See   “SGC Links – Articles – Academic”

30 March 2014. Publication of 2014 Edition of book:  The Single Global Currency – Common Cents for the World.  Available on as a PAPERBACK and in KINDLE format. The 2014 edition is a rewrite of the original 2006 edition, unlike the 2007, 2008 and 2009 editions which republished the original edition, together with Appendices for the updated information. It records the recent progress toward a Single Global Curency, including the growth of the Eurozone to 18 members, with the 2014 accession of Latvia.


5 January 2014  Article “Global governance should recognise global citizenship” supports Single Global Currency.  Article by R. Seetharaman in the Gulf Times. See SGC Links – Articles – non-academic”


1 January 2014.  Latvia joins the Eurozone, bringing the number of euro countries to 18, and reducing the number of currencies needed to transact business in the world to 140 for 193 U.N. members.  See SGC Links – Articles – non-academic”


8 December 2013. Barry Eichengrein gives support to development of Australia/New Zealand monetary union.  See SGC Links – Articles – non-academic”


2 December 2013.  Five countries sign protocol for creating East Africa Monetary Unon. See SGC Links – Articles – non-academic”


18 July 2013  African Union urges all-Africa Monetary Union.  See SGC Links – Articles – non-academic”

5 June 2013.  Latvia given EU and EMU OK to adopt euro on January 1, 2014, pending further approvals.  See SGC Links – Articles – non-academic”

14 February 2013.  Ramon Tamames , distinguished citizen and economist of Espana, has agreed to join the Advisory Board of the Single Global Currency Assn., after meeting with SGCA President, Morrison Bonpasse in Malaga. 

5 February 2013. Duane Higgins of the U.S. proposes new name for future Single Global Currency: “SPEDRI,” as derived from of SDR (SPEcial Drawing RIghts).  See Feedback on SGC Name.



This is the home page of the Single Global Currency Association, which is dedicated to the goal of implementing a Single Global Currency, within a Global Monetary Union and managed by a Global Central Bank by 2024.   We shall achieve this goal through education and persuasion.

We believe that once the peoples (including their corporations and labor and other organizations) of the world understand the benefits of a Single Global Currency, they will demand it from their governments.  The Single Global Currency is what the peoples of the world need, and it is what they want.

The referenda in Denmark and Sweden for a common currency have failed because the people were not persuaded of the benefits of that particular common currency.  A major reason why those benefits are restrained is that today’s common currencies (euro, EC dollar, West African franc, U.S. dollar) still must function in a multi-currency world, and therefore must suffer the ills of the current exchange rate system.    Once the peoples of the world see the significantly increased benefits of a Single Global Currency, even compared to the growing regional “common currencies”, they will demand that their governments start planning for its implementation.

A Single Global Currency would likely have a new name which denotes its global use, such as “mundo”, “global”, or “eartha”, just as the “euro” is currently for Europe. (See Feedback on SGC Names.)  It likely would not be the expanded form of any current currency, such as the dollar or euro or yen, unless those currencies opened up their central banks’ governing boards to worldwide participation and agreed to change the name of the currency to one with more global meaning.

With the use of a Single Global Currency, there would be no more need for expensive currency exchanges nor expensive hedges against currency fluctuations.   Gone would be currency speculation and the risk of currency failures and balance of payment problems.  Such a currency would therefore be more efficient as a means of conveying true value, without consideration of the political winds of the day.  (See Why an SGC, and see our one-page FACT sheet.)

The Single Global Currency would be managed by a single global central bank, with representative governing boards for the people , governments and financial institutions of the world.

Implementing a Single Global Currency for international transactions AND as legal tender in participating countries, does not mean that other currencies cannot co-exist with such a Single Global Currency.   When the euro was being planned, it was anticipated that the pre-existing national currencies would continue to co-exist. However, such a plan was deemed inefficient and it was decided to abandon the old national currencies.  That was a decision made by the members of the eurozone members of the Eurozone and was not a mechanical requirement of monetary union.  Within a global monetary union, and with a Single Global Currency managed by a global central bank, there may well continue to exist several pre-existing national currencies and other national instruments which might be called currencies, such as complementary currencies (e.g. frequent flier miles, Canadian Tire Dollars or Ithaca Hour Dollars)

The Global Central Bank would be financed by whatever benefits will come from the printing of money and seigniorage.   Any surplus monetary benefits coming to the bank would be allocated to politically agreed-upon goals, such as the reduction of foreign debt or the eradication of disease or the support of family planning.

As it’s thought by many economists that a Single Global Currency will be good for the people of the world and as many economists and non-economists expect a Single Global Currency “someday”, why not obtain the benefits thereof sooner rather than later?  It will surely benefit all the people of all the countries of the world if there is a Single Global Currency, just as it currently benefits California and Maine to be in the same monetary union with the U.S. dollar, and for Germany and Portugal to be in the European Monetary Union with the euro.   “Let’s start planning, NOW!”

Let’s ask the thousands of economists who specialize in international monetary issues to study how the Single Global Currency will work and what is needed to implement it.   Enough has been studied and written about how the current exchange rate systems do not give suffcient stability to the international finance system.  “Let’s start planning, NOW!”

Of course, there are issues to be worked and agreements to be made.   There will be questions about which countries can participate, and under what conditions.   There will be questions about what steps must be accomplished first or second or third.   There should be no question, however, of whether the goal should be reached.   In any case, “Let’s start planning, NOW!”

For more information about the Single Global Currency Association, please send email to: Single Global Currency Association

or you may write to:

Single Global Currency Association
P.O. Box 390, Newcastle, ME 04553, USA.

Visitor count since 10 June 2003



On this blog we’ve made frequent mention of late for the drive toward a new world economic order, including the push for a singular world currency.

However, it’s worth noting that it’s not just Christian prophecy-watchers and so-called “conspiracy nuts” who have long been watching for the emergence of a world currency. Twenty-one years ago, The Economist magazine spoke of the coming world currency, which they named “the phoenix”.

To the skeptics, all this talk of a coming new world order, one world government, and the Antichrist all sounds like silly talk. I’m sure when Noah warned the world of the flood to come, that sounded like silly talk too.

… until the rain started to fall.


Title of article: Get Ready for the Phoenix
Source: Economist; 01/9/88, Vol. 306, pp 9-10

From the article:

“THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.

At the beginning of 1988 this appears an outlandish prediction. Proposals for eventual monetary union proliferated five and ten years ago, but they hardly envisaged the setbacks of 1987.”

(Note: the writer is apparently referring here to the events related to October 19, 1987 — often referred to as “Black Monday”– when stock markets crashed in the U.S. and around the world, shedding a huge value in a very short time.)

another quote…

” As the next century approaches, the natural forces that are pushing the world towards economic integration will offer governments a broad choice. They can go with the flow, or they can build barricades. Preparing the way for the phoenix will mean fewer pretended agreements on policy and more real ones. It will mean allowing and then actively promoting the private-sector use of an international money alongside existing national monies. That would let people vote with their wallets for the eventual move to full currency union. The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today. In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power.”

Full article here.

Links Related;

Related Content:

Coming Soon:
A Global Central Bank, Global Currency & World Government


Following the 2009 G20 summit, plans were announced for implementing the creation of a new global currency to replace the US dollar’s role as the world reserve currency. Point 19 of the communiqué released by the G20 at the end of the Summit stated, “We have agreed to support a general SDR allocation which will inject $250 billion into the world economy and increase global liquidity.” SDRs, or Special Drawing Rights, are “a synthetic paper currency issued by the International Monetary Fund.”

     As the Telegraph reported, “the G20 leaders have activated the IMF’s power to create money and begin global ‘quantitative easing’. In doing so, they are putting a de facto world currency into play. It is outside the control of any sovereign body. Conspiracy theorists will love it.”1
The article continued in stating that, “there is now a world currency in waiting. In time, SDRs are likely to evolve into a parking place for the foreign holdings of central banks, led by the People’s Bank of China.” Further, “the creation of a Financial Stability Board looks like the first step towards a global financial regulator,” or, in other words, a global central bank.
It is important to take a closer look at these “solutions” being proposed and implemented in the midst of the current global financial crisis. These are not new suggestions, as they have been in the plans of the global elite for a long time. However, in the midst of the current crisis, the elite have fast-tracked their agenda of forging a New World Order in finance. It is important to address the background to these proposed and imposed “solutions” and what effects they will have on the International Monetary System (IMS) and the global political economy as a whole.

A New Bretton-Woods

     In October of 2008, Gordon Brown, Prime Minister of the UK, said that we “must have a new Bretton Woods – building a new international financial architecture for the years ahead.” He continued in saying that, “we must now reform the international financial system,” and that he would want “to see the IMF reformed to become a ‘global central bank’ closely monitoring the international economy and financial system.”2
On October 17, 2008, Gordon Brown wrote an op-ed in the Washington Post in which he said that this ‘new Bretton-Woods’ should work towards “global governance,” and implementing “shared global standards for accounting and regulation,” and “the renewal of our international institutions to make them effective early-warning systems for the world economy.”3
In early October 2008, it was reported that, “as the world’s central bankers gather this week in Washington DC for an IMF-World Bank conference to discuss the crisis, the big question they face is whether it is time to establish a global economic ‘policeman’ to ensure the crash of 2008 can never be repeated.” Further, “any organisation with the power to police the global economy would have to include representatives of every major country – a United Nations of economic regulation.” A former governor of the Bank of England suggested that, “the answer might already be staring us in the face, in the form of the Bank for International Settlements (BIS),” however, “the problem is that it has no teeth. The IMF tends to couch its warnings about economic problems in very diplomatic language, but the BIS is more independent and much better placed to deal with this if it is given the power to do so.”4

Emergence of Regional Currencies

     On January 1, 1999, the European Union established the Euro as its regional currency. The Euro has grown in prominence over the past several years. However, it is not to be the only regional currency in the world. There are moves and calls for other regional currencies throughout the world.
In 2007, Foreign Affairs, the journal of the Council on Foreign Relations, ran an article titled, ‘The End of National Currency’, in which it began by discussing the volatility of international currency markets, and that very few “real” solutions have been proposed to address successive currency crises.
The author poses the question, “Will restoring lost sovereignty to governments put an end to financial instability?” He answers by stating that, “this is a dangerous misdiagnosis,” and that, “the right course is not to return to a mythical past of monetary sovereignty, with governments controlling local interest and exchange rates in blissful ignorance of the rest of the world. Governments must let go of the fatal notion that nationhood requires them to make and control the money used in their territory. National currencies and global markets simply do not mix; together they make a deadly brew of currency crises and geopolitical tension and create ready pretexts for damaging protectionism. In order to globalise safely, countries should abandon monetary nationalism and abolish unwanted currencies, the source of much of today’s instability.”
The author explains that, “monetary nationalism is simply incompatible with globalisation. It has always been, even if this has only become apparent since the 1970s, when all the world’s governments rendered their currencies intrinsically worthless.” The author states that, “since economic development outside the process of globalisation is no longer possible, countries should abandon monetary nationalism. Governments should replace national currencies with the dollar or the euro or, in the case of Asia, collaborate to produce a new multinational currency over a comparably large and economically diversified area.” Essentially, according to the author, the solution lies in regional currencies.5
In October of 2008, “European Central Bank council member Ewald Nowotny said a ‘tri-polar’ global currency system is developing between Asia, Europe and the US and that he’s skeptical the US dollar’s centrality can be revived.”6
In South America, there are moves to create a regional currency and central bank under the Union of South American Nations, which was established in May of 2008.7,8 The Gulf Cooperation Council (GCC), a regional trade bloc of Arabic Gulf nations, has also been making moves towards creating a regional central bank and common currency for its member nations, following the example of Europe, and even being advised by the European Central Bank.9-12
From the time of the East Asian financial crisis in the late 1990s, there have been calls for the creation of a regional currency for East Asia among the ten member nations of the ASEAN bloc, as well as China, Japan and South Korea. In 2008, ASEAN central bank officials and financial ministers met to discuss monetary integration in the region.13-19
Within Africa, there are already certain regional monetary unions, and within the framework of the African Union, there are moves being implemented to create an African currency under the control of an African Central Bank (ACB), which is to be located in Nigeria.20-24
In North America, there are moves, coinciding with the deepening economic and political integration of the continent under NAFTA and the Security and Prosperity Partnership of North America (SPP), to create a regional currency for North America, aptly given the current designation as the Amero, and even the then-Governor of the Central Bank of Canada, David Dodge, in 2007, said that a regional currency was “possible.”25-33

A Global Currency

     In 1988, The Economist ran an article titled, ‘Get Ready for the Phoenix’, in which they wrote, “thirty years from now, Americans, Japanese, Europeans, and people in many other rich countries and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the late twentieth century.”
The article stated that, “The market crash [of 1987] taught [governments] that the pretence of policy cooperation can be worse than nothing, and that until real co-operation is feasible (ie, until governments surrender some economic sovereignty) further attempts to peg currencies will flounder.”
Amazingly the author of the article adds that, “Several more big exchange-rate upsets, a few more stockmarket crashes and probably a slump or two will be needed before politicians are willing to face squarely up to that choice. This points to a muddled sequence of emergency followed by patch-up followed by emergency, stretching out far beyond 2018 – except for two things. As time passes, the damage caused by currency instability is gradually going to mount; and the very trends that will make it mount are making the utopia of monetary union feasible.”
The article advocated the formation of a global central bank, perhaps through the IMF, and “this means a big loss of economic sovereignty, but the trends that make the phoenix so appealing are taking that sovereignty away in any case.”
The article concludes in stating that, “The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today. In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power.” The last sentence says, “Pencil in the phoenix for around 2018, and welcome it when it comes.”34
Former US Federal Reserve Governor Paul Volcker has said that, “if we are to have a truly global economy, a single world currency makes sense.” A European Central Bank executive stated that, “we might one day have a single world currency,” in “a step towards the ideal situation of a fully integrated world.”35
The IMF held a conference in 2000 discussing how the world was segmenting into regional currency blocs and that a single world currency was possible, and that it is, in fact, preferable.36 Nobel Prize winning economist Robert Mundell has long advocated the creation of a global currency, and that it “would restore a needed coherence to the international monetary system, give the International Monetary Fund a function that would help it to promote stability, and be a catalyst for international harmony.”37
In March 2009, Russia suggested that the G20 meeting in April should “consider the possibility of creating a supra-national reserve currency or a ‘super-reserve currency’,” and to consider the IMF’s Special Drawing Rights (SDRs) in this capacity.38 A week later, China’s central bank governor proposed the creation of a global currency controlled by the IMF, replacing the US dollar as the world reserve currency, also using the IMF’s SDRs as the reserve currency basket against which all other currencies would be fixed.39
Days after this proposal, the US Treasury Secretary Timothy Geithner, former President of the New York Federal Reserve Bank, told the Council on Foreign Relations that, in response to a question about the Chinese proposal, “we’re actually quite open to that suggestion. But you should think of it as rather evolutionary, building on the current architectures, than – rather than – rather than moving us to global monetary union.”40
In late March a UN panel of economists recommended the creation of a new global currency reserve that would replace the US dollar, and that it would be an “independently administered reserve currency.”41

Creating a World Central Bank

     In 1998, Jeffrey Garten wrote an article for the New York Times advocating a “global Fed.” Garten was former Dean of the Yale School of Management, former Undersecretary of Commerce for International Trade in the Clinton administration, previously served on the White House Council on International Economic Policy under the Nixon administration and on the policy planning staffs of Secretaries of State Henry Kissinger and Cyrus Vance of the Ford and Carter administrations, former Managing Director at Lehman Brothers, and is a member of the Council on Foreign Relations.
In his article written in 1998, he stated that, “over time the United States set up crucial central institutions – the Securities and Exchange Commission (1933), the Federal Deposit Insurance Corporation (1934) and, most important, the Federal Reserve (1913). In so doing, America became a managed national economy. These organisations were created to make capitalism work, to prevent destructive business cycles and to moderate the harsh, invisible hand of Adam Smith.” He stated that, “this is what now must occur on a global scale. The world needs an institution that has a hand on the economic rudder when the seas become stormy. It needs a global central bank.”
Interestingly, Garten states that, “one thing that would not be acceptable would be for the bank to be at the mercy of short-term-oriented legislatures.” In essence, it is not to be accountable to the people of the world. So, he asks the question, “To whom would a global central bank be accountable? It would have too much power to be governed only by technocrats, although it must be led by the best of them. One possibility would be to link the new bank to an enlarged Group of Seven – perhaps a ‘G-15’ [or in today’s context, the G20] that would include the G-7 plus rotating members like Mexico, Brazil, South Africa, Poland, India, China and South Korea.” He further states that, “There would have to be very close collaboration” between the global bank and the Fed.42
In September of 2008, Jeffrey Garten wrote an article for the Financial Times in which he stated that, “Even if the US’s massive financial rescue operation succeeds, it should be followed by something even more far-reaching – the establishment of a Global Monetary Authority to oversee markets that have become borderless.”
In late October of 2008, Garten wrote an article for Newsweek in which he stated that, “leaders should begin laying the groundwork for establishing a global central bank.” He explained that, “there was a time when the US Federal Reserve played this role [as governing financial authority of the world], as the prime financial institution of the world’s most powerful economy, overseeing the one global currency. But with the growth of capital markets, the rise of currencies like the euro and the emergence of powerful players such as China, the shift of wealth to Asia and the Persian Gulf and, of course, the deep-seated problems in the American economy itself, the Fed no longer has the capability to lead single-handedly.”43
In January of 2009, it was reported that, “one clear solution to avoid a repeat of the problems would be the establishment of a ‘global central bank’ – with the IMF and World Bank being unable to prevent the financial meltdown.” Dr. William Overholt, senior research fellow at Harvard’s Kennedy School, formerly with the Rand Institute, gave a speech in Dubai in which he said that, “To avoid another crisis, we need an ability to manage global liquidity. Theoretically that could be achieved through some kind of global central bank, or through the creation of a global currency, or through global acceptance of a set of rules with sanctions and a dispute settlement mechanism.”44

A “New World Order” in Banking

     In June of 2008, before he was Treasury Secretary in the Obama administration, Timothy Geithner, as head of the New York Federal Reserve, wrote an article for the Financial Times following his attendance at the 2008 Bilderberg conference, in which he said that, “banks and investment banks whose health is crucial to the global financial system should operate under a unified regulatory framework,” and that, “the US Federal Reserve should play a ‘central role’ in the new regulatory framework, working closely with supervisors in the US and around the world.”45
In November of 2008, The National, a prominent United Arab Emirates newspaper, reported on Baron David de Rothschild accompanying UK Prime Minister Gordon Brown on a visit to the Middle East, although not as a “part of the official party” accompanying Brown. Following an interview with the Baron, it was reported that, “Rothschild shares most people’s view that there is a new world order. In his opinion, banks will deleverage and there will be a new form of global governance.”46
In February of 2009, the Times Online reported that a “new world order in banking [is] necessary,” and that, “it is increasingly evident that the world needs a new banking system and that it should not bear much resemblance to the one that has failed so spectacularly.”47
But of course, the elites that are shaping this new banking system are the champions of the previous banking system. The solutions that will follow are simply the extensions of the current system, only sped up through the necessity posed by the current crisis.

An Emerging Global Government

     An April 3, 2009 article in the Toronto Star, reported that the G20 “confab constitutes the first great get-together of the new world order. This geopolitical order may follow a number of directions, by no means all of them pleasant. But its defining characteristic is already unchangeable.” Further, “An uncomfortable characteristic of the new world order may well turn out to be that global income gaps will widen because the rising powers, such as China, India and Brazil, regard those below them on the ladder as potential rivals.” The author further states that, “The new world order thus won’t necessarily be any better than the old one,” and that, “what is certain, though, is that global affairs are going to be considerably different from now on.”48
David Rothkopf, a scholar at the Carnegie Endowment for International Peace, former Deputy Undersecretary of Commerce for International Trade in the Clinton administration, and former managing director of Kissinger and Associates, and a member of the Council on Foreign Relations, recently wrote a book titled, Superclass: The Global Power Elite and the World They are Making, of which he is certainly a member. When discussing the role and agenda of the global “superclass,” he states that, “in a world of global movements and threats that don’t present their passports at national borders, it is no longer possible for a nation-state acting alone to fulfil its portion of the social contract.”49
He writes that “the international organisations and alliances we have today,” are evolving and achieving great things, despite certain flaws, and that he is “optimistic that progress will continue to be made,” but it will be difficult, because it “undercuts many national and local power structures and cultural concepts that have foundations deep in the bedrock of human civilisation, namely the notion of sovereignty.”50 He further notes that, “mechanisms of global governance are more achievable in today’s environment,” and that these mechanisms “are often creative with temporary solutions to urgent problems that cannot wait for the world to embrace a bigger and more controversial idea like real global government.”51
In December of 2008, the Financial Times ran an article written by Gideon Rachman, a past Bilderberg attendee, who wrote that, “for the first time in my life, I think the formation of some sort of world government is plausible,” and that, “a ‘world government’ would involve much more than co-operation between nations. It would be an entity with state-like characteristics, backed by a body of laws. The European Union has already set up a continental government for 27 countries, which could be a model. The EU has a supreme court, a currency, thousands of pages of law, a large civil service and the ability to deploy military force.” Asking if the European model could “go global,” he states that it can, and that this is made possible through an awakening “change in the political atmosphere,” as “the financial crisis and climate change are pushing national governments towards global solutions, even in countries such as China and the US that are traditionally fierce guardians of national sovereignty.”
He quoted an adviser to French President Nicolas Sarkozy as saying, “global governance is just a euphemism for global government,” and that the “core of the international financial crisis is that we have global financial markets and no global rule of law.” However, Rachman states that any push towards a global government “will be a painful, slow process.” He then states that a key problem in this push can be explained with an example from the EU, which “has suffered a series of humiliating defeats in referendums, when plans for ‘ever closer union’ have been referred to the voters. In general, the Union has progressed fastest when far-reaching deals have been agreed by technocrats and politicians – and then pushed through without direct reference to the voters. International governance tends to be effective, only when it is anti-democratic. [Emphasis added]”52
In November of 2008, the United States National Intelligence Council (NIC), the US intelligence community’s “centre for midterm and long-term strategic thinking,” released a report that it produced in collaboration with numerous think tanks, consulting firms, academic institutions and hundreds of other experts, among them are the Atlantic Council of the United States, the Wilson Center, RAND Corporation, the Brookings Institution, American Enterprise Institute, Texas A&M University, the Council on Foreign Relations and Chatham House in London.53
The report, titled Global Trends 2025: A Transformed World, outlines the current global political and economic trends that the world may be going through by the year 2025. In terms of the financial crisis, it states that solving this “will require long-term efforts to establish a new international system.”54 It suggests that as the “China-model” for development becomes increasingly attractive, there may be a “decline in democratisation” for emerging economies, authoritarian regimes, and “weak democracies frustrated by years of economic underperformance.” Further, the dollar will cease to be the global reserve currency, as there would likely be a “move away from the dollar.”55
It states that the dollar will become “something of a first among equals in a basket of currencies by 2025. This could occur suddenly in the wake of a crisis, or gradually with global rebalancing.”56 The report elaborates on the construction of a new international system, stating that, “by 2025, nation-states will no longer be the only – and often not the most important – actors on the world stage and the ‘international system’ will have morphed to accommodate the new reality. But the transformation will be incomplete and uneven.” It also notes that, “most of the pressing transnational problems – including climate change, regulation of globalised financial markets, migration, failing states, crime networks, etc. – are unlikely to be effectively resolved by the actions of individual nation-states. The need for effective global governance will increase faster than existing mechanisms can respond.”57
The report discusses the topic of regionalism, stating that, “Asian regionalism would have global implications, possibly sparking or reinforcing a trend toward three trade and financial clusters that could become quasi-blocs (North America, Europe, and East Asia).” These blocs “would have implications for the ability to achieve future global World Trade Organisation agreements and regional clusters could compete in the setting of trans-regional product standards for IT, biotech, nanotech, intellectual property rights, and other ‘new economy’ products.”58
Reflecting similar assumptions made by Rachman in his article advocating a world government is the topic of democratisation, on which the report says, “advances are likely to slow and globalisation will subject many recently democratised countries to increasing social and economic pressures that could undermine liberal institutions.” This is largely because “the better economic performance of many authoritarian governments could sow doubts among some about democracy as the best form of government. The surveys we consulted indicated that many East Asians put greater emphasis on good management, including increasing standards of livings, than democracy.” Further, “even in many well-established democracies, surveys show growing frustration with the current workings of democratic government and questioning among elites over the ability of democratic governments to take the bold actions necessary to deal rapidly and effectively with the growing number of transnational challenges.”59

The Creation of a New World Order

     Ultimately, what this implies is that the future of the global political economy is one of increasing moves toward a global system of governance, or a world government, with a world central bank and global currency; and that, concurrently, these developments are likely to materialise in the face of and as a result of a decline in democracy around the world, and thus, a rise in authoritarianism. What we are witnessing is the creation of a New World Order, controlled by a totalitarian global government structure.
In fact, the very concept of a global currency and global central bank is authoritarian in its very nature, as it removes any vestiges of oversight and accountability away from the people of the world, and toward a small, increasingly interconnected group of international elites.
As Carroll Quigley explained in his monumental book, Tragedy and Hope, “[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”60
Indeed, the current “solutions” being proposed to the global financial crisis benefit those that caused the crisis over those that are poised to suffer the most as a result of the crisis: the disappearing middle classes, the world’s dispossessed, poor, indebted people. The proposed solutions to this crisis represent the manifestations and actualisation of the ultimate generational goals of the global elite; and thus, represent the least favourable conditions for the vast majority of the world’s people.
It is imperative that the world’s people throw their weight against these “solutions” and usher in a new era of world order, one of the People’s World Order; with the solution lying in local governance and local economies, so that the people have greater roles in determining the future and structure of their own political-economy, and thus, their own society. With this alternative of localised political economies, in conjunction with an unprecedented global population and international democratisation of communication through the internet, we have the means and possibility before us to forge the most diverse manifestation of cultures and societies that humanity has ever known.
The answer lies in the individual’s internalisation of human power and destination, and a rejection of the externalisation of power and human destiny to a global authority of which all but a select few people have access to. To internalise human power and destiny is to realise the gift of a human mind, which has the ability to engage in thought beyond the material, such as food and shelter, and venture into the realm of the conceptual. Each individual possesses – within themselves – the ability to think critically about themselves and their own life; now is the time to utilise this ability with the aim of internalising the concepts and questions of human power and destiny: Why are we here? Where are we going? Where should we be going? How do we get there?
The supposed answers to these questions are offered to us by a tiny global elite who fear the repercussions of what would take place if the people of the world were to begin to answer these questions themselves. I do not know the answers to these questions, but I do know that the answers lie in the human mind and spirit, that which has overcome and will continue to overcome the greatest of challenges to humanity, and will, without doubt, triumph over the New World Order.


1. Ambrose Evans-Pritchard, ‘The G20 moves the world a step closer to a global currency’, The Telegraph, April 3, 2009,
2. Robert Winnett, ‘Financial Crisis: Gordon Brown calls for “new Bretton Woods”,’ The Telegraph, October 13, 2008,
3. Gordon Brown, ‘Out of the Ashes’, The Washington Post, October 17, 2008,
4. Gordon Rayner, ‘Global financial crisis: does the world need a new banking “policeman”?’, The Telegraph, October 8, 2008,
5. Benn Steil, ‘The End of National Currency’, Foreign Affairs, Vol. 86, Issue 3, May/June 2007, pp.83-96
6. Jonathan Tirone, ‘ECB’s Nowotny Sees Global “Tri-Polar” Currency System Evolving’, Bloomberg, October 19, 2008,
7. BBC, ‘South America nations found union’, BBC News, May 23, 2008,
8. CNews, ‘South American nations to seek common currency’, China View, May 26, 2008,
9. AME Info, ‘GCC: Full steam ahead to monetary union’, September 19, 2005,
10. John Irish, ‘GCC Agrees on Monetary Union but Signals Delay in Common Currency’, Reuters, June 10, 2008,
11. TIMELINE-Gulf single currency deadline delayed beyond 2010’, Forbes, March 23, 2009,
12. Agencies, ‘GCC need not rush to form single currency’, Business 24/7, March 26, 2009,
13. Barry Eichengreen, ‘International Monetary Arrangements: Is There a Monetary Union in Asia’s Future?’, The Brookings Institution, Spring 1997,
14. ‘After European now Asian Monetary Union?’, Asia Times Online, September 8, 2001,
15. ‘ASEAN Makes Moves for Asian Monetary Fund’, Association of Southeast Asian Nations, May 6, 2005,
16. Reuven Glick, ‘Does Europe’s Path to Monetary Union Provide Lessons for East Asia?’, Federal Reserve Bank of San Francisco, August 12, 2005,
17. AFP, ‘Asian Monetary Fund may be needed to deal with future shocks’, Channel News Asia, July 2, 2007,
18. AFX News Limited, ‘East Asia monetary union “feasible” but political will lacking – ADB’, Forbes, September 19, 2007,
19. Lin Li, ‘ASEAN discusses financial, monetary integration’, China View, April 2, 2008,
20. Paul De Grauwe, Economics of Monetary Union, Oxford University Press, 2007, pp.109-110
21. Heather Milkiewicz & Paul R. Masson, ‘Africa’s Economic Morass—Will a Common Currency Help?’, The Brookings Institution, July 2003,
22. John Gahamanyi, ‘Rwanda: African Central Bank Governors Discuss AU Financial Institutions’, The New Times, August 23, 2008,
23. Eric Ombok, ‘African Union, Nigeria Plan Accord on Central Bank’, Bloomberg, March 2, 2009,
24. Ministry of Foreign Affairs, ‘Africa in the Quest for a Common Currency’, Republic of Kenya, March 2009,
25. Herbert Grubel, ‘The Case for the Amero’, The Fraser Institute, September 1, 1999, p.4,
26. Ibid, p.17
27. Thomas Courchene & Richard Harris, ‘From Fixing to Monetary Union: Options for North American Currency Integration’, C.D. Howe Institute, June 1999, p.22,
28. Ibid, p.23
29. Barrie McKenna, ‘Dodge Says Single Currency “Possible”‘, The Globe and Mail, May 21, 2007
30. ‘Consider a Continental Currency, Jarislowsky Says’, The Globe and Mail, November 23, 2007,
31. CNN, Larry King Live, Transcripts, October 8, 2007,
32. Herbert Grubel, ‘Fix the Loonie’, The Financial Post, January 18, 2008,
33. Todd Harrison, ‘How realistic is a North American currency?’, Market Watch, January 28, 2009,{D10536AF-F929-4AF9-AD10-250B4057A907}
34. ‘Get ready for the phoenix’, The Economist, Vol. 306, January 9, 1988, pp.9-10
35. ECB, ‘The euro and the dollar – new imperatives for policy co-ordination’, Speeches and Interviews, September 18, 2000,
36. IMF, ‘One World, One Currency: Destination or Delusion?’, Economic Forums and International Seminars, November 8, 2000,
37. Robert A. Mundell, ‘World Currency’, The Works of Robert A. Mundell,
38. Itar-Tass, ‘Russia proposes creation of global super-reserve currency’, ITAR-TASS News Agency, March 16, 2009,
39. Jamil Anderlini, ‘China calls for new reserve currency’, The Financial Times, March 23, 2009,
40. CFR, A Conversation with Timothy F. Geithner, Council on Foreign Relations Transcripts, March 25, 2009,
41. ‘UN backs new global currency reserve’, The Sunday Telegraph, March 29, 2009,,27753,25255091-462,00.html
42. Jeffrey E. Garten, ‘Needed: A Fed for the World’, The New York Times, September 23, 1998,
43. Jeffrey Garten, ‘We Need a Bank Of the World’, Newsweek, October 25, 2008,
44. Sean Davidson, ‘Global central bank could prevent future crisis’, Business 24/7, January 10, 2009,
45. James Politi & Gillian Tett, ‘NY Fed chief in push for global bank framework’, The Financial Times, June 8, 2008,
46. Rupert Wright, ‘The first barons of banking’, The National, November 6, 2008,
47. Michael Lafferty, ‘New world order in banking necessary after abject failure of present model’, The Times Online, February 24, 2009,
48. Richard Gwyn, ‘Change not necessarily for the better’, The Toronto Star, April 3, 2009,
49. David Rothkopf, Superclass: The Global Power Elite and the World They are Making, Toronto: Penguin Books, 2008, p.315
50. Ibid, pp.315-316
51. Ibid, p.316
52. Gideon Rachman, ‘And now for a world government’, The Financial Times, December 8, 2008,
53. NIC, Global Trends 2025: A Transformed World, The National Intelligence Council’s 2025 Project, November, 2008,
54. Ibid, p.11
55. Ibid, pp.11-12
56. Ibid, p.94
57. Ibid, p.81
58. Ibid, p.83
59. Ibid, p.87
60. Carroll Quigley, Tragedy and Hope: A History of the World in Our Time, New York: Macmillan Company, 1966, p.324

ANDREW MARSHALL is a Research Associate with the Centre for Research on Globalization based out of Montreal, Canada ( He has written extensively on issues imperialism in the Middle East and Africa, the environment, Homeland Security, war, terrorism and the global economy. He is currently studying Global Political Economy and the History of the Middle East and Africa at Simon Fraser University (Canada).

The above article appears in
New Dawn No. 115
(July-August 2009)

Narco-Dollars for Beginners
“How the Money Works” in the Illicit Drug Trade
by Catherine Austin Fitts
Special to the Narco News Bulletin


Narco News Publisher’s Note: Catherine Austin Fitts is a former managing director and member of the board of directors of Dillon Read & Co, Inc, a former Assistant Secretary of Housing-Federal Housing Commissioner in the first Bush Administration, and the former President of The Hamilton Securities Group, Inc. She is the President of Solari, Inc, an investment advisory firm. Solari provides risk management services to investors through Sanders Research Associates in London.

“The Latin American drug cartels have stretched their tentacles much deeper into our lives than most people believe. It’s possible they are calling the shots at all levels of government.”

–William Colby, former CIA Director, 1995


Part I: Narco Dollars for Dummies TOP

A Simple Framework:
The Solari Index and the Dow Jones Index

The Solari Index is my way of estimating how well a place is doing. It is based upon the percentage of people in a place who believe that a child can leave their home and go to the nearest place to buy a popsicle and come home alone safely.

When I was a child growing up in the 1950’s at 48th and Larchwood in West Philadelphia, the Solari Index was 100 percent. It was unthinkable that a child was not safe running up to the stores on Spruce Street for a popsicle and some pin ball. The Dow Jones was about 500, the Solari Index was 100 percent and our debt per person was very low. Of course I did not think about it that way at the time. All I knew was that life on the street with my buddies was sweet.

Today, the Dow Jones is over 9,000, debt per person is over $100,000 and my favorite hairdresser in Philadelphia, Al at the Hair Hut in West Philadelphia, and I just had a debate yesterday afternoon while Al was cutting my hair about whether the Solari Index in my old neighborhood was 0 percent (my position) or 10 percent (Al’s position). Men always think it is higher than women.

Despite the boy-girl spread between us, it is fair to say that Al and I agree that the Solari Index is in the tank — both in the streets of Philadelphia and throughout America.

Life on the street ain’t sweet any more. I watched the slide of the Solari Index as a child. A lot of it had to do with narcotics trafficking and the people that narco dollars put in power on our streets — and in city hall, in the banks, in Congress and the corporations and investors down town and that ring the city.

My mission is to see the Solari Index return to 100 percent and to do so in a manner that moves the Dow up and our debt per person down and makes me and my partners a whole pile of money.

A few years back when my efforts to improve the Solari Index were threatening to reduce narcotics profits in a few places, I discovered that I could not look to the enforcement or the judicial establishment funded with my tax dollars to protect me. Narco dollars had the upper hand throughout government and the legal establishment.

That’s when I decided that I would have to learn how the money works on the drug trade.

Here is what I have learned that has been useful to me — and may help you have a better map of how narco dollars impact you, your business, your family and the Solari Index in your neighborhood.

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The Economics of Production:
Sam and Dave Do Boat Loads of White Agricultural Substances

Okay, let’s start at ground zero. It is 1947, and World War II is over. America is ready to go back to work to build the corporate economy. We are in New Orleans on the docks.

Two boats pull into the docks. The first boat is full of a white agricultural product grown in Latin America called sugar. The owner of the cargo, lets call him Sam, sells his boat load of white agricultural substance to the sugar wholesaler on the docks for how much money?

Ok, so let’s say that Sam sells his entire boatload of sugar to the sugar wholesaler on the docks for X dollars.

Now, after Sam pays his workers and all his costs of growing and transporting the sugar, and after he and his wife spend the weekend in New Orleans and he pays himself a bonus and buys some new harvest equipment and pays his taxes, how much cash does he have left to deposit into his bank account? Or, another way of saying this is: What is Sam’s net cash margin on his sugar business?

Well, it depends on how lucky and hard working and smart Sam is, but let’s say that Sam has worked his proverbial you know what off and he makes around 5-10 percent. Sam the sugar man has a 5-10 percent cash profit margin. Let’s call Sam’s margin S for slim or SLIM PERCENTAGE.

Back on the docks, the second boat — an exact replica of the boat carrying Sam’s sugar — is a boat carrying Dave’s white agricultural product called drugs. In those days this was more likely to be heroin, these days more likely to be cocaine. Whatever the precise species, the planting, harvesting and production of this white agricultural substance, Dave’s drugs, are remarkably like Sam’s sugar.

Ok, so if Sam the sugar man sold his sugar to the sugar wholesaler for X dollars, how much will Dave the drug man sell his drugs to the drug wholesaler for? Well, where Sam is getting pennies, Dave is getting bills. If Sam had sales of X dollars, let say that Dave had sales of 50-100 times X. Dave may carry the same amount of white stuff in a boat but from a financial point of view, Dave the drug man has a lot more “sales per boat” than Sam the sugar man.

Now, after Dave pays his workers and all his costs of growing and transporting the drugs, and after he and his wife spend the weekend in New Orleans and he pays himself a bonus and buys some new harvest and radar equipment and spends what he needs on bribes and bonuses to a few enforcement and intelligence operatives and retainers to his several law firms, how much cash does he have left to deposit into his bank account? Or, another way of saying this is what is Dave’s net cash margin on his drug business?

It’s also going to be a multiple of Sam’s margin, right? Maybe it will be 20 percent or 30 percent or more? Let’s call it B for Big, or BIG PERCENTAGE. Dave the drug man has a much bigger “cash profit per boat” than Sam the sugar man. Part of that is, of course, once Dave has set up his money laundering schemes, even after a 4-10 percent take for the money laundering fees, it’s fair to say his tax rate of 0 percent is lower than Sam’s tax rate. While it is expensive to set up all the many schemes Dave might use to launder his money, once you do it you can save a lot avoiding some or all of the IRS’s take.

Look at your estimate of Sam and Dave’s sales and profits. Now answer for yourself the following questions.

  • Who is going to get laid more, Sam or Dave?
  • Who is going to be more popular with the local bankers, Sam or Dave?
  • Who is going to have a bigger stock market portfolio with a large investment house, Sam or Dave?
  • Who is going to donate more money to political campaigns, Sam or Dave?
  • Whose wife is going to be bigger in the local charities, Sam or Dave’s?
  • Whose companies will have more prestigous law firms on retainer, Sam or Dave’s?
  • Who is going to buy the other’s company first, Sam or Dave? Is Dave the drug man going to buy Sam the sugar man’s company, or is Sam the sugar man going to buy Dave the drug man’s company?
  • When they want to buy the other’s company, will the bankers, lawyers and investment houses and politicians back Sam the sugar man or Dave the drug man?
  • Whose son or grandson has a better chance of getting into Harvard or getting a job offer at Goldman Sachs, Sam or Dave’s?

Don’t listen to me. And don’t listen to Peter Jennings, Dan Rather or Tom Brokaw. Who do you think pays their salaries? Who owns the companies they work for? Sam or Dave?

Don’t listen to anyone else. Think about the numbers and listen to your heart. What do you believe?

There is very little about how the money works on the drug trade that you cannot know for yourself by coming to grips with the economics over a fifty year period of Sam and Dave and their boat loads of white agricultural substance. It is the magic of compound interest.

As one of my former partners used to say, “Cash flow is more important than your mother.”

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Many Boatloads Later

It’s more than fifty years now since the boats transporting Sam and Dave’s white agricultural products docked in New Orleans. I don’t know what the Narco National Product (Solari’s term for that portion of the GNP coming from narco dollars) was in 1947, but lets say it was a billion dollars or less. Today, the Narco National Product that number is estimated to be about $400 billion globally and about $150 billion plus in the United States.

It helps to look at the business globally as the United States is the world leader in global money laundering. According to the Department of Justice, the US launders between $500 billion — $1 trillion annually. I have little idea what percentage of that is narco dollars, but it is probably safe to assume that at least $100-200 billion relates to US drug import-exports and retail trade.

Ok, so let’s think about how much Sam and Dave have in accumulated profits in their bank and brokerage accounts.

Let’s assume that the US narco national product in 1947 was $1 billion and it has grown to about $150 billion today. Assume a straight line of growth from $1 billion – $150 billion, so the business grows about $3 billion a year and then tops out at $150 billion as the Solari Index has bottomed out at or near 0 percent. America is about as stoned on illegal drugs as it can get, and growth in controlled “Schedule II” substances has moved to Ritalin and other cocaine-like drugs for kids that government programs and health insurance will now finance.

Let’s take the BIG PERCENT margin that we estimated for Dave the drug man’s net cash margin. Let’s say that every year from 1947 through 2001, that the cash flow sales available for reinvestment from drug profits grew by $3 billion a year, throwing off that number times BIG PERCENT. Okay, assume that the reinvested profit grew at the compound growth rate of the Standard & Poor’s 500 as it got reinvested along the way.

That amount is an estimate for the equity owned and controlled by those who have profited in the drug trade. Total narco dollars. How much money is that? I made an Excel spread-sheet once to estimate total narco capital in the economy.

My numbers showed that Dave the drug man had bought up not only Sam’s companies, but — if you throw in other organized crime cash flows — a controlling position in about most everything on the New York Stock Exchange.

When you think about it, this analysis make sense. The folks with the BIG PERCENT — big cash margin — would end up rich and in power and the guys working their you-know-what off for SLIM PERCENT — a low cash margin — would end up working for them.


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NYSE Chairman Richard Grasso Embracing a FARC Commmander (Colombian Rebel Group)

A Real World Example:
NYSE’s Richard Grasso and the Ultimate New Business “Cold Call”

Lest you think my comment about the New York Stock Exchange is too strong, let’s look at one event that occurred before our “war on drugs” went into high gear through Plan Colombia, banging heads over narco dollar market share in Latin America.

In late June 1999, numerous news services, including Associated Press, reported that Richard Grasso, Chairman of the New York Stock Exchange flew to Colombia to meet with a spokesperson for Raul Reyes of the Revolutionary Armed Forces of Columbia (FARC), the supposed “narco terrorists” with whom we are now at war.

The purpose of the trip was “to bring a message of cooperation from U.S. financial services” and to discuss foreign investment and the future role of U.S. businesses in Colombia.

Some reading in between the lines said to me that Grasso’s mission related to the continued circulation of cocaine capital through the US financial system. FARC, the Colombian rebels, were circulating their profits back into local development without the assistance of the American banking and investment system. Worse yet for the outlook for the US stock market’s strength from $500 billion — $1 trillion in annual money laundering — FARC was calling for the decriminalization of cocaine.

To understand the threat of decriminalization of the drug trade, just go back to your Sam and Dave estimate and recalculate the numbers given what decriminalization does to drive BIG PERCENT back to SLIM PERCENT and what that means to Wall Street and Washington’s cash flows. No narco dollars, no reinvestment into the stock markets, no campaign contributions.

It was only a few days after Grasso’s trip that BBC News reported a General Accounting Office (GAO) report to Congress as saying: “Colombia’s cocaine and heroin production is set to rise by as much as 50 percent as the U.S. backed drug war flounders, due largely to the growing strength of Marxist rebels”

I deduced from this incident that the liquidity of the NY Stock Exchange was sufficiently dependent on high margin cocaine profits (BIG PERCENT) that the Chairman of the New York Stock Exchange was willing for Associated Press to acknowledge he is making “cold calls” in rebel controlled peace zones in Colombian villages. “Cold calls” is what we used to call new business visits we would pay to people we had not yet done business with when I was on Wall Street.

I presume Grasso’s trip was not successful in turning the cash flow tide. Hence, Plan Colombia is proceeding apace to try to move narco deposits out of FARC’s control and back to the control of our traditional allies and, even if that does not work, to move Citibank’s market share and that of the other large US banks and financial institutions steadily up in Latin America.

Buy Banamex anyone?


Part II: Narco Dollars On Your Map TOP

It helps to look at the drug markets by looking at a map of the United States.

What are the four states with the largest market share in illegal narcotics trafficking? Draw a map if you want and shade them in on your map.

Yup. You got it.

New York, California, Texas and Florida.

It makes sense. Those are the biggest states. They have big coastal areas and borders and big ports. It would make sense that the population would grow in the big states where the trade and business flow grows. If you check back to Part I of “Narco Dollars for Dummies”, we described two businesses. One was Sam’s sugar business that had a SLIM PERCENTAGE profit. The other was Dave’s drug business that had a BIG PERCENTAGE profit. It would make sense that these four states would be real big in both Sam’s sugar business and Dave’s drug businesses.

OK. Now. What are the four states with the biggest business in money laundering of narco profits and other profits of organized crime?

Not surprising? Same four states. They are all known as banking power places.

New York, California, Texas and Florida.

What’s next? What are the four states with the biggest business in taking the laundered narco profits and using them to deposit money in a bank, or to buy another company, or to start a new company, or just buy stock in the stock market? That’s what I call the reinvestment business.

Same four, right? New York, California, Texas and Florida.

Who were the governors of these four states in 1996?

Well, let’s see. Jeb Bush was the governor of Florida. Governor Jeb was the son of George H. W. Bush, the former head of an oil company in Texas and Mexico and the former head of the CIA and the former head of the various drug enforcement efforts as Vice President and President. Then George W. Bush, also the son of George H. W. Bush, was the governor of Texas. So the governors of two of the largest narco dollar market share states just happen to be the sons of the former chief of the secret police.

Do you think it is possible to become the governor of a state with the support of the SLIM PERCENTAGE profit businesses and the opposition of the BIG PERCENTAGE profit businesses, particularly after the BIG PRECENTAGE profits have bought up all the SLIM PERCENTAGE profit businesses?

What about president?

Of course, George W. is President today fueled by the single most successful campaign fundraising in the history of Western civilization. Now do you know why Hillary Clinton wanted to be a Senator from New York? Now do you know why Andrew Cuomo wants to be New York governor and is reported to be doing polls to see if people associate him with the Mafia and organized crime?

When you think about it, the President would need to win the majority of the people who donate from the SLIM PERCENTAGE profit businesses but control the reinvestment of the BIG PERCENTAGE profit industry cash flow to win. The competition for the support of the people who control the reinvestment from the BIG PERCENTAGE profit business cash flow in the biggest states would be fierce.

According to the Center for Responsive Politics analysis of the 2000 elections, donors in California, New York, the District of Colombia Metro Area (which is full of lawyers and lobbyists who represent all the other states), Texas and Florida contributed $666.8 million, or approximately 47 percent of a total of $1.427 billion in donations.

I can just paraphrase Tina Turner singing in the background. Care to hum along with us? . . . .”What’s drugs got to do . . . got to do . . . with it?”

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Getting Out of Narco Dollars HQ

In 1996, my company and I were targeted by a private informant and a group of investigators working for the Department of Justice and the Department of Housing and Urban Development (HUD). If you have ever seen the movie Enemy of the State with Will Smith and Gene Hackman, then you understand how the drill works.

Will Smith plays a successful Washington lawyer who is targeted in a phony frame and smear by a US intelligence agency. The spooky types have high-speed access to every last piece of data on the information highway — from Will’s bank account to his telephone conversations — and the wherewithal to engineer a smear campaign through the papers and the Council on Foreign Relations types.

The organizer of an investment conference once introduced me by saying, “Who here has seen the movie Enemy of the State? The woman I am about to introduce to you played Will Smith in real life.”

One day I was a wealthy entrepreneur with a beautiful home, a successful business and money in the bank. I had been a partner and member of the board of directors of a Wall Street firm and then Assistant Secretary of Housing-Federal Housing Commissioner during the Bush Administration. I had been invited to serve as a governor of the Federal Reserve Board and instead started my own company in Washington, The Hamilton Securities Group. Thanks to our leadership in digital technology, financial software and analytics, Hamilton was doing well and poised for significant financial growth.

One of my software tool innovations, Community Wizard, helped communities access data about how all the money works in their place. Accessible through the World Wide Web, Community Wizard was illuminating an unusual pattern of defaults on HUD mortgages and other government and homeowner losses in areas in which the CIA had admitted to facilitating cocaine trafficking by Iran Contra supporters.

According to the CIA, we were paying our government to help the narco dollars make money in a way that — if you read Community Wizard’s comic book-like money maps — was losing taxpayers and homeowners billions of dollars.

The next day I was hunted, living through 18 audits and investigations and a smear campaign directed not just at me but also at members of my family, colleagues and friends who helped me. I believe that the smear campaign originated at the highest levels. For more than two years I lived through serious physical harassment and surveillance. This included burglary, stalking, having houseguests followed and dead animals left on the doormat. The hardest part was the necessity of keeping quiet about the physical danger lest it cost me more support or harm my credibility. Most people simply do not believe that such things are possible in America.

In 1999, I sold everything to pay what to date is approximately $6 million of legal and administrative costs. My estimate of equity destroyed, damages and opportunity costs is $250 million. I moved to a system of living in several places on an unpredictable schedule in the hope that this would push up the cost of surveillance and harassment and so dissuade my tormentors from following.

The places were chosen to move me as far away as possible from the corridors of power in Washington and on Wall Street filled with people benefiting from narco dollars and their reinvestment. That strategy-combined with excellent legal and administrative work by a first rate team of very courageous people — has been successful in besting the targeting. It made it possible for me to understand how our economic addiction to narco dollars worked and how to it was draining our neighborhoods. I teamed up with the members of my family and friends and their neighbors who were getting drained.

Four days after Insight Magazine published its cover story on me this summer, the head investigator targeting us resigned unexpectedly. Three weeks later the last of 18 audits and investigations was suddenly closed down. A follow-up article by Insight’s Paul Rodriguez described the closed investigation as something that “many inside both HUD and the Department of Justice regarded as a political vendetta against Fitts.”

The miracle had happened. We have overcome a serious targeting. Like in the movie where Will Smith comes out fine, my story has a happy ending. It’s a wonderful feeling. As Winston Churchill’s once said, “Nothing is more exhilarating than being shot at without result.”

I believe that one of the reasons for my happy ending was that our actions to deal with the investigation reflected the understanding of narco dollars that I acquired from living and traveling throughout America and talking with people from all walks of life about how narco dollars were impacting our lives and neighborhoods in many different places.

Understanding narco dollars is something I need to know to help entrepreneurs around the country build the profitable deals and businesses that will get the Solari Index and Dow Jones in our neighborhoods rising together.

Where I live, folks do not want to know about what is wrong on the Titanic. They do not want to know that a flood of narco dollars is rolling over us. They know these things. What they want to know is how to build arks.

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Georgie, West Philadelphia and the Stock Market

One of my new homes is in the city in Philadelphia, near where I grew up in West Philadelphia. Another is in a very beautiful and close knit farming community in Hickory Valley, Tennessee where my father’s family has lived since the 1850’s.

Once a month I drive to Philadelphia from my home in Hickory Valley to attend a board meeting. I stay in a lovely little apartment in the first floor of a row house owned by my friend Georgie.

Georgie is one of my favorite people in the world. She lives in the apartment on the second floor. Just about my favorite thing in the world is hanging out with Georgie. We watch Oprah, we talk, we go to movies, and we giggle over ice cream with long names and cookies. Georgie is an awesome cook and my little apartment fills up daily with the smells of something delicious that Georgie is making.

One day, Forest, my dog, and I were up in Georgie’s apartment to enjoy a fresh plate of scrapple that Georgie had fried up that morning. The conversation turned to narco dollars. Georgie said that looking at the big picture was simply too overwhelming. Couldn’t I explain this without using the words millions or billions — just dollars and cents in terms of our neighborhood in West Philadelphia?

I always have this problem explaining international money flows to moms and grandmoms. Most really great women want to know about the real world. The world of real people — her world full of her kids and grandkids and other kids she loves.

So we got out a blank piece of paper and started to estimate.

Every day there are two or three teenagers on the corner dealing drugs across from our home in Philadelphia. We figured that if they had a 50% deal with a supplier, did $300 a day of sales each, and worked 250 days a year that their supplier could run his net profits of approximately $100,000 through a local fast food restaurant that was owned by a publicly traded company.

Assuming that company has a stock market value that is a multiple of 20-30 times its profits, a handful of illiterate teenagers could generate approximately $2-3 million in stock market value for a major corporation, not to mention a nice flow of deposits and business for the Philadelphia banks and insurance companies.

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The Narco Dollar Double Bind:
Dow Jones Index Up, Solari Index Down

As described in Part I, the Solari Index is my way of estimating how well a place is doing. It is based upon the percentage of people in a place who believe that a child can leave their home and go to the nearest place to buy a Popsicle and come home alone safely. The Solari Index is about how safe you feel you and your neighbor’s kids are.

When I was a child growing up in the 1950’s at 48th and Larchwood in West Philadelphia, the Solari Index was 100 percent. It was unthinkable that a child was not safe running up to the stores on Spruce Street for a Popsicle and some pinball. The Dow Jones was about 500, the Solari Index was 100 percent and our debt per person was very low. Of course I did not think about it that way at the time. All I knew was that life on the street with my buddies was sweet.

Today, the Dow Jones is over 9,000, debt per person is over $100,000, and I think the Solari Index in my old neighborhood is 0 percent.

Life on the street ain’t sweet anymore.

To understand how this works, we need to understand “pop.”

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It’s Not Just About Profit, It’s About the Pop

Here is the part that is particularly hard for women. It took several times at our sheet of paper before Georgie understood what I was saying.

The power of narco dollars comes when you combine drug trafficking with the stock market.

The “pop” is a word I learned on Wall Street to describe the multiple of income at which a stock trades. So if a stock like PepsiCo trades at 20 times it’s income, that means for every $100,000 of income it makes, it’s stock goes up $2 million. The company may make $100,000, but its “pop” is $2 million. Folks make money in the stock market from the stock going up. On Wall Street, it’s all about “pop.”

The people who own a corporation make money on the stock going up. So a company has investors, with the most powerful investors typically being large institutions who are typically represented on the board of the company. The board is the group of people who decides what goes. The senior management officials who run the company day to day are also on the board. Most of the money they make comes from stock options that they get to encourage them to get the stock to go up for the investors. That means that what everyone who runs the company wants is for the stock to go up. The way to do that is to increase net income or to increase the multiple at which the stock trades.

So in the case of PepsiCo described above, if the management increases soda pop sales in a way that net income goes up by $100,000, the stock goes up $2 million. Now let’s say, the board and management do a whole series of things to attract new investors and improve the company’s image and, as a result, the stock starts trading at 22 times profits. Then, the stock value goes up even more. Whether increasing net income or increasing the multiple at which the stock market values the company profits, the board and the management are focused on making the stock go up. That is how their money works.

The winner in the global corporate game is the guy who has the most income running through the highest multiple stocks. He is the winning pop player. Like the guy who wins at monopoly because he buys up all the properties on the board, he can buy up all the other companies.

So if I have a company that has a $100,000 of income and a stock trading at 20 times earnings, if I can find a way to run $100,000 of narcotics sales by a few teenagers in West Philadelphia through my financial statements, I can get my stock market value to go up from $2 million – $4 million. I can double my “pop.” That is a quick $2 million profit from putting a few teenagers to work driving the Solari Index down in their neighborhood. Bottom line, I can make a lot of quick money on the stock going up and the Solari Index going down

OK, now what does this all mean for the Solari Index in Philadelphia? If I am a group of mothers in my neighborhood who want the Solari Index to go back up to a 100%, what’s stopping me?

Well, if the Department of Justice is correct about $500 billion-to-1 trillion of annual money laundering in the US, then about $20-40 billion should move annually through the Philadelphia Federal Reserve District.

Assuming a 20% margin for the BIG PERCENTAGE profits and a 20 times multiple on the stock of the companies that Dave and his investors and banking partners were using to launder the money, let’s look at how much of the stock market value would be “addicted” to the drug and money laundering profits flowing through the Philadelphia area.

The total stock market value generated in the Philadelphia area with $20-40 billion in narco retail sales would be about $80-160 billion. If you add all the things you could do with debt or and other ways to increase the multiples, and you could get that even higher, say $100-250 billion.

Assuming that there are 3 million people in the greater Philadelphia area, the total stock market value generated would average anywhere from $27,000-to-$85,000 per person. Imagine what would happen to the economy in Philadelphia if this stock market value suddenly disappeared because all the teenagers in Philadelphia stopped dealing or buying drugs?

Imagine what happens to your stock multiple if you are a Philadelphia corporate chieftain and you don’t run narco dollars or large purchases fueled by narco dollars through your financial statements and you don’t attract narco dollars to reinvest in your stock? What happens to your corporate income and your stock profit if the ones who invest narco dollars — accumulated over the last fifty years compounding at their magical compound interest — don’t like you? How is everyone in Philadelphia who loses money on your stock going down going to feel about you?

The Department of Justice says that we launder $500 billion – $1 trillion. Multiply those times a BIG PERCENTAGE cash flow profit margin. Now figure how much of that “income” gets run through the income statement of publicly traded banks and companies and multiply that number by the multiple of income at which their stocks trade.

Voila. I don’t know what your number is. All I know is that, as Ed Sullivan used to say, it is “really, really BIG.”


Understanding Money Laundering in America
Part III: Drugs as Currency

“Who can compete with the government?”

–John Gotti, Jr.

The Hickory Valley-Philadelphia Fast Food Franchise Pop

Two things helped me understand money laundering in America. First, as I drove from Hickory Valley to Philadelphia once a month and drove around the country with my dog Forest all sorts of people started to teach me about how the money worked truckers and the ladies who run the brand-name motels and the folks who work the late shifts at the gas station food marts. Second, I read Black Money, a mystery novel by Michael Thomas, a former partner of the Wall Street firm, Lehman Brothers.

In Black Money a government investigator investigating S&L fraud starts to look into the revenues and expenses of a fast food chain, which is experiencing far more deposits from sales than it is selling pizzas. As Thomas walks you through a handful of the near infinite number of possible money laundering schemes known to mankind, you start to get a sense for some of the economics of fast food franchises that have nothing to do with feeding people.

After I finished Black Money I started to pay attention to “how the money works” at the fast food and motel franchises at every interstate exit between Tennessee and Philadelphia. What I noticed about them was that no matter when I drove by — day or night, weekday or weekend — some of them were suprisingly empty. Indeed, one or two name brands were defined by their perpetual emptiness. Conversations every time I stopped filled in a lot here and there about how much cash was coming in and going out on the food and retail business.

Some quick estimation on what was being spent per interstate exit to start up and operate all the retail establishments versus what was coming in the door in terms of legitimate business said that some businesses had to be an excuse, an excuse to generate stock market capital gains by combining laundered money or phony profits with retail franchises — or both.

The problems this presents to people trying to run an honest business are numerous. The problems it creates for our work ethic and culture are numerous too. It increasingly puts the low performance people in charge, and everyone starts to behave like and follow them.

For example, I drove ten miles to Bolivar, our county seat, one night to go through the car wash at the local big chain publicly traded gas station. I tried to pay for a three-dollar car wash with quarters. I was told they would not take coins. It was a policy. Counting coins was too much work, the person at the register and then the manager said as they sat and gossiped with their friends, no other customers in sight. So I got back in my car and drove ten miles home and washed the car with a hose and some paper towels, the symbolic economy being too busy to care about steady customers or to do the real work in the concrete world.

If you are feeling energetic, go drive around to a few areas with a heavy concentration of retail fast food and motel franchises. Try estimating out the numbers. See how they work for you in your place. Are your local businesses in the retail business or the money laundromat business or both?

Another quick and dirty estimation technique for your neighborhood is to take the Department of Justice’s figure of $500 billion – $1 trillion and divide by 281 million Americans for a “per American” estimate of money laundering market share. Now multiply that times the number of people in your area. Now divide by the number of local banks. What do the numbers say to you?

The next time you are out on the streets, see if you can guess where the money is. It’s bound to be there someplace.

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Enforcement: At the Heart of the Double Bind

I tend not to get bogged down in discussions about how the various police, enforcement and prosecution industries relate to narco dollars.

Here is my bottom line on how the money works on enforcement and the war on drugs.

Every year since I was a child the Solari Index goes down and the budgets that I pay for as a taxpayer to fund more enforcement, prosecution and incarceration go up. If you look at what taxpayers are paying, you would think we were picking up all the narco dollar industry’s expenses.

The more we pay for enforcement, the more the Solari Index goes down and drug profits go up. The more we pay for national security, the more thousands of boat loads of white agricultural products seem to have no problem moving back and forth across the borders.

After fifty years, the correlation is documented and clear.

What is also clear is that the person who has inside help from the national security, intelligence, enforcement and prosecution bureaucracies will have the biggest BIG PERCENTAGE cash margin (see Parts I & II for background on BIG vs. SLIM PERCENTAGE).

John Gotti, Jr, not a reliable source, when asked by a reporter whether or not the New York Gotti family was dealing in narcotics said, “No, who can compete with the government?”

The CIA, also not a reliable source, backs up Mr. Gotti’s postion. According to the CIA’s own Inspector General, the government has been facilitating drug trafficking. Indeed, according to the CIA and DOJ (Dept. of Justice), the CIA and DOJ created a memorandum of understanding that permitted the CIA to help its allies and assets to traffic in drugs and not have to report it.

Where I come from powerful people pay for performance. I can only presume that the narco dollars are getting the performance they want from the expenditure of our tax dollars for more and more enforcement. After all, enforcement keeps profit margins up and the franchise controlled.

The best example I know is my own case. My estimate is that the federal enforcement establishment may have spent more to target me over the last six years than they spent to get Bin Laden before September 11. They clearly were not hampered in my case by having to respect the spirit or the letter of the law. I deduce from that only that the Solari model is not as good for the narco dollar and money laundering businesses as Bin Laden was — at least until recently.

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Drugs as Currency

One of challenges of doing the numbers on the narcotics business is that narcotics are not always a commodity — sometimes narcotics are a currency used to pay for other things.

The arms industry sometimes markets to third world countries, or groups such as terrorists, who cannot pay with cash, but can pay with drugs. So, for example, it is not unusual to see arms-drugs transshipment operations, in which payment for arms is taken with drugs and then the drugs retailed in the US to facilitate the arms trading and profits.

A case in point is the Iran-Contra operation at Mena, Arkansas. It has been alleged that Oliver North and the White House (National Security Council) were dealing drugs through Mena not to make money, but to facilitate arms shipments. Mena has received attention as a result of its alleged financial contribution to Bill and Hillary Clinton’s rise to national prominence.

You also see the arms-drugs relationship as you estimate how the money works on the private profits from various taxpayer funded wars. Vietnam, Kosovo, Plan Colombia, Afghanistan, what do they all have in common? Drugs, oil and gas, arms. Add gold, currency and bank market share and you have the top of my checklist for understanding how the money works on any war or “low intensity conflict” around the globe.

Many of the members of our global leadership were trained in wartime narcotics trafficking in Asia during WWII. George H. W. Bush and his generation watched our ally Chang Kai Shek finance his army and covert operations with opium. I am told that the Flying Tigers were the model that taught Air America how to fly dope.

If you trace back the history of the family and family networks of America’s leaders and numerous other leaders around the world, what you will find is that narcotics and arms trafficking are a multigenerational theme that has criss-crossed through Asia, North America, Europe, Latin America and Eurasia and back through the City of London and Wall Street to the great pools of financial capital. Many a great American and British fortune got going in the Chinese opium trade.

One of the benefits of learning how narco dollars work is that it will help you sort through the money laundering and insider trading news on the War on Terrorism. Terrorism and narcotics trafficking often get linked through narcotics as currency. Terrorists need guns. Narco dollars need private protection and covert operations.

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In Defense of the American Drug Lords

It’s 1947. You want to make sure that America wins in the great game of globalization. The winner will be the country that accumulates the largest pool of capital to finance its corporations and investment in new technology. That is a problem because Americans vote for leaders who help them spend, not save. No matter how hard Sam the sugar man works and no matter how much he saves, how much capital can be pooled at SLIM PERCENTAGE? It is fair to say it is not enough to beat the investment network that can pool capital at BIG PRECENTAGE growth rates. (See Part I for the story of Sam and Dave).

Indeed, what a history of narcotics trafficking and piracy and various other forms of organized crime over the last five hundred years show is that our leaders have been in a double bind for centuries. The only thing more dangerous than getting caught doing organized crime, is not being in control of the reinvested cash flows from it. This is why monarchs played footsie with pirates in Elizabethan times and no doubt have been doing so ever since.

After taxation, organized crime is a society’s way of forming lots of pools of low cost cash capital. Organized crime is a banking and venture capital business.

So the reality is that if you want to control the cash flow and capital that controls the overworld, you’ve got to control the cash flows getting generated by the underworld. Indeed, you’ve got to have an underworld. If it does not exist, you need to outlaw some things to get one going.

Here is the bottom line on how the money works on narco dollars. Unless Sam switches to dope, Dave will win his wife, his mistress, his banker, buy his company, buy his Congressman and be the star at the local charities. Everyone will admire and pay attention to Dave.

It’s the power of compound interest.

It’s 1947. If you don’t do it, you will be the loser. What would you do?

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The Pogo Problem: We Have Met the Enemy and It is Us

The Sam and Dave dilemma of “to deal or not to deal” is made worse by the power of popular opinion.

Last summer, I made a presentation called “How the Money Works on Organized Crime” to a wonderful group of about 100 people at an annual conference for a spiritually focused foundation in Philadelphia. This is a group of people who are committed to contributing to the spiritual evolution of our culture.

After walking through the various Sam and Dave dilemmas with Sam’s SLIM PERCENTAGE profits sugar business and Dave’s BIG PERCENTAGE profits drug business, as well as the intersection between the stock market and campaign fundraising and narco dollars for about an hour, I asked the group what would happen to the stock market if we decriminalized or legalized drugs?

The stock market would crash, they said.

What would happen to financing the government deficit if we enforced all money-laundering laws? Since most of the bank wire transfers are batched and run through the New York Federal Reserve Bank, this should not really be that hard, right?

Their taxes might go up. Worse, yet, their government checks might stop, they said.

I then asked them to imagine a big red button at the front of the lectern. By the power of our imaginations, if they pushed that button they could decriminalize narcotics trafficking and stop all money laundering in the United States.

Who would push the button?

It turns out that in an audience of approximately 100 people committed to spiritually evolve our society that only one person would push the button. Upon reflection, 99 would not. I asked why.

They said that if they pushed the button, their mutual funds would go down and their government checks might stop.

I commented that what they were proposing is that an entire infrastructure of people continue to market narcotics to their children and grandchildren to ensure that their mutual and pension funds stay high in value.

They said, yes, that’s right.

Which is why I say that America is not addicted to narcotics as much as it is addicted to narco dollars.

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The National Security Council’s Double Bind in 1996

Here is the acid test.

It’s August 1996. Gary Webb has just broken the story in the San Jose Mercury News about the CIA helping to deal drugs into South Central LA. He has put the legal documents up on their website. The proof is hard. The government is dealing drugs.

Catherine Austin Fitts’s company is publishing a tool on the web called Community Wizard that shows maps with Geographic Information Systems software that include patterns of defaults on HUD mortgages in the areas of LA with the heaviest concentration of CIA supported Iran Contra drug trafficking.

The patterns between HUD defaulted mortgages and narco dollars are much too close for comfort.

What would you do if you were Bob Rubin (Secretary of Treasury, now Co-Chairman of Citicorp), Larry Summers (Deputy Secretary of Treasury, now President of Harvard), John Hawke (Undersecretary of the Treasury; now Comptroller of the Currency), Al Gore (Vice President, now teaching) and John Deutch (Director of the CIA, now teaching) sitting on the national security council or the related narco dollars task force?

Would you target Webb and get him fired and the story discredited or would you let the story grow and flourish?

Would you target Fitts and have her business and her software tools and databases destroyed or would you let her business flourish, allowing every community to see and track the narco dollars that were helping to drive their Solari Index to 0% while driving the Dow Jones Index higher?

Which will it be in an election year? Will you do everything you can do to attract the reinvestment of the narco dollars into your campaign and into the stock market or will you let Fitts and Webb continue to illuminate “how the money works” on narco dollars in a way that might crash the stock market and make it harder and more expensive for the government to finance the deficit?

Before you answer, let me tell you one more story.

In 1999, I was at a revival for Christian women. One of the presidential candidates made a guest appearance. A friend of mine, an Afro-American minister, who used to work for the Drug Enforcement Agency (DEA), leapt to her feet to applaud him with tremendous enthusiasm. I was surprised at her response given that she understood his success in attracting narco dollars not to mention his and his colleague’s silence on Gary Webb’s Dark Alliance reports and the subsequent CIA admission of drug dealing by the government.

She looked at me and said, “He is going to be the winner.” So I said, “You mean, I am a loser because I tried to stop the corruption and he is a winner because he profited from it and helped it grow. So you will clap for him and not for me.” She replied, “That’s right. You are a loser. He is a winner”

Not such an easy decision to vote for the “rule of law” is it?

Indeed, Webb got fired and Fitts’ was targeted and, after spending $6 million on legal and related expenses, my fortune sank down to the same 0% as the Solari Index.

But whatever I do, I can’t blame it just on the top guys. Whatever they did, whoever it was, they were doing what it took to please and win the crowd.

Americans love a winner.

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Solari Index Up, Dow Up, Debt Down

The good news on all of this is that there are solutions. New technology blesses us with the potential tools we can use to radically increase productivity in a way that can “jump the curve” on our narco dollar addiction.

Will it happen? I don’t know.

My pastor says, “If we can face it, God can fix it.” The question is can we face our addiction to narco dollars? Can we do it in a way that entrepreneurs like me can build successful businesses and transactions that profit from getting the Solari Index and the Dow Jones Index to go up together?

Sound impossible? Far from it. It’s quite possible. Add up all the current income generated by small businesses in America. It is currently valued at a multiple of 1-5 times because it is private-not publicly traded in a liquid stock market. Investors have no way to invest in a liquid publicly traded stock.

The creation of a solari, a local knowledge manager/databank that publishes neighborhood financial statements and information and tracks the Solari Index in your place, can make it possible for your neighborhood to create a mutual fund that could channel capital to the profitable small businesses in your neighborhood so that participating small business income could start to trade at a multiple of 10 times — even 20 times or 30 times eventually. The potential capital gains are in the trillions of dollars.

That is a lot of low cost capital that local entrepreneurs can use to create jobs and to build their businesses — even start new ones.

Better yet, while your doing that how about reengineering billions of federal, state and local government investment that has a negative return on investment to both taxpayers and communities to a positive return on investment. More big capital gains that can be securitized and traded in a liquid stock market — again the potential profits are in the trillions.

Finally, add up the value of all the homes and real estate in your community. OK, what would happen to the value of that equity if the Solari Index went back up to 100 percent? Real estate financed through a local trust or REIT or mutual fund that could be traded in the stock market would create a way for investors to start to “trade places.” That means they would profit from the Solari Index going up along with local real estate owners, homeowners and small business folks. Add some more trillions to the potential capital gains.

Helping the Solari Index rise back to 100% is the biggest capital gains opportunity in America, particularly when combined with reengineering government investment and pooling small business equity in a manner that provides competitive access to the stock market. Generations of accumulated narco dollars could do very well investing successfully in such a capital gains opportunity.

A trillion here, a trillion there — pretty soon you are talking about a lot of “pop.”

It can only happen if we can look into the face of our addiction and start having a conversation about how we move out of our current financial incentives that keep the Solari Index down to a more positive, sustainable and wealthy future for our children and grandchildren. For example, think about what would happen if every government worker in America had their annual salary fluctuate based on the performance of the Solari Index in their jurisdiction? I bet it would take about three years to get the Solari Index back to 100%.

That is why all the yah-yah in Washington about new stricter money laundering laws to deal with terrorism won’t work. If government officials and bankers can keep making money when the Solari Index is at 0%, it will not rise no matter how many people — innocent or guilty — we put in jail. The day we decide that government officials only make money for performance and all the companies that get money from government — whether contractors or banks that use taxpayers credit — only get money if we are better off and the Solari Index is rising, is when we will start to face and solve the real problems in a money making way.

It’s time to face our addiction to narco dollars and to grapple with how to reverse our incentive systems. It is time to figure out how publicly traded companies and our banks and insurance companies can make more money from our kids succeeding then from them failing. Indeed, it can be done.

So here is my last message on how the money works on narco dollars. Now that we have run the Solari Index down to near 0% while fueling the rise of the Dow Jones about 20X since I was a kid, the new opportunity is going to be the fortunes to be made on businesses and investment vehicles that fuel the Solari Index rising.

Wouldn’t you pay for streets to be sweet for your child once again? Especially if it made you a whole bunch of money on an IPO of your neighborhood mutual or venture fund in the stock market?

I want to make money on kids succeeding. I want to teach Dave a way to make more money by getting out of narco dollars and backing Sam starting a solari and “trading places.”

My money is on Solari rising.


For more on starting a solari for your neighborhood, see, or contact Catherine at


Bibliography TOP

After three years of plowing through hundreds of books, videos and articles, here are the sources that I found most useful to helping me understand “how the money works” in the drug trade.

Assuming that you are a busy person who knows nothing about narco dollars and does not want to become an expert — you just want to have a good map of “how the money works” in your world — I have put an (*) next to my top four book and one video recommendations. These are the ones that will be the most useful to help you understand the drug trade and what it means to you, your family, your business and the Solari Index in your neighborhood.



Mena, Arkansas: Various articles:

Catherine Austin Fitts:


  • Air America, Mel Gibson
  • Bullworth, Warren Beatty
  • From
    • CIA Director John Deutch in Watts Video: Special Town Hall Meeting with John Deutch & Juanita McDonald, October 15, 1996 (*)
    • Mike Ruppert on CIA & Drugs: The Confession & The Impeachment, From The Wilderness. Video, 1999.
    • The Salon At Fraser Court, Mike Ruppert, From the Wilderness Video, 1999.
  • Enemy of the State, Will Smith & Gene Hackman
  • Telefon, Charles Bronson and Lee Remick
  • Wag the Dog, Dustin Hoffman

For More Narco News go to

Copyright © 2001 Catherine Austin Fitts
Copyright © 2001 Narco News
Reprinted for Fair Use Only.

Mayumi Hayashi: A video-interview concerning the Fureai Kippu

(International Journal of Community Currency Research


Japan’s Fureai Kippu (‘Ticket for a Caring Relationship’) refers to mutual support networks of members of all ages, targeted at providing care for older people through exchanges of time credits, sometimes supplemented by cash payments (‘time-­‐banking’).

This has attracted increasing attention as a potential contribution to the ‘Big Society’ with an ageing population.

However, despite its pioneering role and scale, relatively little is known about the details and outcomes of Fureai Kippu, and meanwhile simplistic and optimistic generalizations predominate.

This article, using historical analysis and empirical evidence, seeks to address these gaps by examining the origins of Fureai Kippu, its early expansion, post- 2000 slowdown and responses.

It considers the practical contributions and varied benefits potentially offered by the system, along with its operational difficulties. The conclusion is that Fureai Kippu is so complex that not only is evaluation difficult but also no universal panacea can be expected from it.

Read the whole article:

mirror / backup: Mayumi Hayashi Kings College London – JAPANS FUREAI KIPPU TIMEBANKING IN ELDERLY CARE ORIGINS DEVELOPMENT CHALLENGES AND IMPACT ijccr-2012-hayashi.pdf

Fureai Kippu

Fureai Kippu


The Fureai Kippu (literally ‘ticket for a caring relationship’) refers to a variety of Japanese national schemes and networks of mutual support dedicated to providing elderly care through the exchange of a complementary currency 1. The schemes enable individuals to earn time-credits by providing care to elderly people or people with disabilities. Those credits can then be transferred to relatives or friends in need of care, or be saved for the future when sick or old.

Of the two most prominent models of Fureai Kippu, one stands close to traditional timebanking, whereas the other enables conventional money transactions alongside time credits in exchange for the service provided. In the latter, volunteers can decide whether to receive a combination of national currency (yen) and time credits or either one as compensation for providing services 2.

The Fureai Kippu schemes can be considered as the Japanese versions of co-production through timebanking. The term Fureai Kippu has been in use since 1992 3.


The Fureai Kippu aims at developing and strengthening mutually supportive networks of informal elderly care in a country increasingly facing challenges related to a rapidly ageing population, decline in the capacity of family to care for the elder members and sky-rocketing healthcare costs 4.

Community Overview

Japan is a nation of approximately 128 million people 5. The country has the longest overall life expectancy at birth of any other nation on earth (UN, 2006). It is estimated that people born in the period 2010-2015 will live 83,5 years 6. After the post WW2 baby boom, Japanese population is rapidly aging, following a sharp decline in birth rates. In 2009 roughly 22,7% of the population was over 65 and following the trends, in 2050 almost 40% of Japanese will be 65+ 7.

Organisation and History

The Sawayaka Welfare foundation is a non-profit organization launched in 1991 that acts as the umbrella body of the local Fureai Kippu schemes in Japan. Similarly to Time Banks UK, it promotes best practices and assists local initiatives grow 8. Tsutomu Hotta, who also coined the term Fureai Kippu, launched the organization.

Japan has a long tradition of voluntary help and reciprocal assistance dating back to the post WW2 period. The world’s first time bank, named Volunteer Labor Bank, was founded in Osaka, Japan in 1973 9. This was a voluntary network of people providing assistance to each other through the exchange of a time-based complementary currency, named ‘Love Currency’. 10 This example was not part of the Fureai Kippu system, but paved the way for its widespread application in Japan.

The Fureai Kippu emerged in the 1980s, a period in which to overcome the limitations of family-based care, hundreds of grassroots groups of mutual help emerged across the country. The predominant model of Fureai Kippu evolved within these groups, after introducing a rather different reimbursement arrangement compared to conventional timebanking schemes already existing in Japan at the time. Under Fureai Kippu, volunteer members could decide to combine monetary remuneration with time credits: they could choose between earning conventional money (yen), time credits or both in exchange for the service provided. 11

According to data of 2012, 38% of Fureai Kippu are run by small grassroots groups; 21% by local government or quasi-government bodies; the remaining 41% are run by two non-profit organizations. 12


Research on Fureai Kippu suggested that overall the schemes have had a positive role in improving both physical and psychological health of volunteers and recipients of services; helped improve the condition and social relations of vulnerable people; and finally helped to establish more equal relationships between volunteer members and recipients due to the exchange of money (where applicable). 13

Overall, the Fureai Kippu has settled as an effective supplement to conventional professionalized health care resources in Japan. It is perceived to be less top-down and a more humane than the national healthcare service. 14

Currency Details

a. The system in numbers

A research of 2012 suggested there were 391 Fureai Kippu branches in Japan 15. Currently, no data is available on the number of volunteers involved neither on the number of recipients.

b. Function and Unit of Account

The function of time-credits under the Fureai Kippu schemes is to act as a medium of exchange. As the name suggests, the unit of account is time (hours).

c. Issuance

Issuance mechanism vary across the different instances. Typically, notes and tickets are used as the medium of exchange, with very few electronic systems as yet.

d. Software

The Japan’s biggest Fureai Kippu organization, Nippon Life Active Club, introduced customized software to record transactions of time credits in its 130-odd branches across Japan, thereby enabling it to produce its collective data as well as compare and analyse data between branches. However, issuing and redeeming time credits among members are done manually, based on paper-based record keeping.

e. Taxation and Compliance

In general, neither time credits nor cash payments (yen) in Fureai Kippu schemes are considered taxable [Ref needed], the latter (cash) usually being regarded as “donations”, thus exempted from taxation.

f. Funding – Business Model

The majority of Fureai Kippu schemes are run by non-for-profit organizations and communities of mutual-help, all of which are independent from government. Thus they receive few grants and instead self-fund through the membership fee and private donations, supplemented by user-fees for service recipients who do not have time credits to redeem.

How does it work in practice?

A Fureai Kippu branch in Los Angeles has some 100 Japanese immigrant members. One member, Tanaka-san, takes her neighboring older member food shopping by car once a week for about two hours and earns 8 to 10 time credits every month, based on a one-hour-one-credit formula. Tanaka-san then presents her accumulated credits to her frail older mother living in Tokyo where her mother uses the credits to buy weekly home help from her neighboring volunteer member in a Tokyo branch. Since her mother is living alone and has mobility problems, she looks forward very much to these visits, expressing that ‘She is like my daughter whom I can see only once a year when she comes back from Los Angeles’. Tanaka-san is also very happy to see her mother happy and be able to help her in an indirect, small but significant way. She also stresses the importance of an informal and humane relationship between her mother and the volunteer member through time credits, which are hard to get in commercial services provided by professional care workers.

Further readings and videos:

Nakagawa and Bovaird (2011), Hureai Kippu – lessons from Japan for the ‘Big Society’. Available at

mirror / backup: Hureai Kippu – Lessons from Japan for the Big SocietyCESedit17March2011.pdf

Nippon Life Active Club (NALC) (


  1. Hayashi, M. (2012) ‘Japan’s Fureai Kippu Time-banking in Elderly Care: Origins, Development, Challenges and Impact’ International Journal of Community Currency Research 16 (A) 30-44. Available at
  2. Hayashi, M. (2012) ‘Japan’s Fureai Kippu Time-banking in Elderly Care: Origins, Development, Challenges and Impact’ International Journal of Community Currency Research 16 (A) 35
  3. Hayashi, M. (2012) ‘Japan’s Fureai Kippu Time-banking in Elderly Care: Origins, Development, Challenges and Impact’ International Journal of Community Currency Research 16 (A) 36
  4. Hayashi, M. (2012) ‘Japan’s Fureai Kippu Time-banking in Elderly Care: Origins, Development, Challenges and Impact’ International Journal of Community Currency Research 16 (A) 30-44. Available at
  5. National Institute of Population and Social Security Research, 2012. Available at
  6. United Nations World Population Prospects, 2006 revision. UN. Available at
  7. (Japan Statistics Bureau, 2010
  8. Hayashi, M. (2012) ‘Japan’s Fureai Kippu Time-banking in Elderly Care: Origins, Development, Challenges and Impact’ International Journal of Community Currency Research 16 (A). Available at
  9. Hayashi, M. (2012) ‘Japan’s Fureai Kippu Time-banking in Elderly Care: Origins, Development, Challenges and Impact’ International Journal of Community Currency Research 16 (A) 33. Available at
  10. Hayashi, M. (2012) ‘Japan’s Fureai Kippu Time-banking in Elderly Care: Origins, Development, Challenges and Impact’ International Journal of Community Currency Research 16 (A) 33. Available at
  11. Hayashi, M. (2012) ‘Japan’s Fureai Kippu Time-banking in Elderly Care: Origins, Development, Challenges and Impact’ International Journal of Community Currency Research 16 (A) 35. Available at
  12. Hayashi, M. (2012) ‘Japan’s Fureai Kippu Time-banking in Elderly Care: Origins, Development, Challenges and Impact’ International Journal of Community Currency Research 16 (A) 33. Available at
  13. Hayashi, M. (2012) ‘Japan’s Fureai Kippu Time-banking in Elderly Care: Origins, Development, Challenges and Impact’ International Journal of Community Currency Research 16 (A) 37. Available at
  14. Hayashi, M. (2012) ‘Japan’s Fureai Kippu Time-banking in Elderly Care: Origins, Development, Challenges and Impact’ International Journal of Community Currency Research 16 (A) 37. Available at
  15. (SWF, 2012; Hayashi, M. (2012) ‘Japan’s Fureai Kippu Time-banking in Elderly Care: Origins, Development, Challenges and Impact’ International Journal of Community Currency Research 16 (A) 37. Available at