Most people who leave Wall Street or Washington cash out or go quiet. Catherine Austin Fitts did neither.
She was an investment banker. She was assistant secretary of housing and Federal Housing commissioner. She spent years in court with the Justice Department after she started asking where the money went. She says she won. Then she published. On the Daniela Cambone Show she was not treated as a curiosity. She was treated as someone who used to sit in the room where the numbers get written.
Cambone opened with the Hamilton lyric: the room where it happens. Fitts had sat on both sides of the table. Banker. Cabinet-level housing official. Then the official flows and the real flows, she says, stopped matching.
“I saw tremendous corruption when I was in the administration,” she told Cambone. “That’s why I had to leave. Because I was being ordered to break the law and I wouldn’t.”
What follows is her account, in her order. Official Washington has a different story about “undocumentable adjustments.” Both belong on the page.
The Light That Would Not Stay Off
After HUD she built Hamilton Securities. The pitch was bottom-up. Software that let small firms pool capital. An “IPO in a box.” Radio dots on a prospectus. Democratize equity, she said, so the middle class could live with globalization instead of being run over by it.
The firm won work as a lead financial adviser to the Federal Housing Administration. Then the mortgage book started to look like a bubble with fraud inside it. Fitts says her team tried to wind the rot down from inside. She says the Justice Department moved to fire them, grab the databases that mapped the money, and park the files under court control for years.
She quotes Gladiator. Before they can kill you, they have to kill your name. She had a name. She says the litigation was designed to take it. She warned about the mortgage bubble early. People could not hear her, she says, because the name was already dirty. When the bubble burst she looked right and felt worse. “You’re trying to warn everybody about something that could bankrupt them and yet they can’t hear you. It’s a terrifying experience.”
Offers to go back inside kept coming. She did not take them. There is a line, she said, between civilization and its absence. If a financial coup starts, it destroys the country that made your family’s life possible. You cannot go along.
Hamilton’s plan B, in her telling, was not a street fight. It was so much bottom-up wealth that the people at the top would not have to smash the old system to keep control. What she says she did not understand then was dependence on criminal cash flows. The existing model could not permit a clean alternative. The lawsuit was how she learned the covert side of the house.
Two visions, she says. Hers: new tools, wide ownership, a reset that still leaves families a country. Theirs: new tools, top-down control. She calls that second world psychopathic. She wrote the fight down in an online book, Dillon Read & Co. Inc. and the Aristocracy of Stock Profits, at dillonreadandco.com. She says two hard-copy attempts were sabotaged and a third brought three phone calls that, stacked, threatened a family member. She left the book on the web.
Who does the targeting? Not only elected offices, she said. A permanent layer of intelligence and enforcement, public and private. Corporations with their own intelligence teams. Political faces, in her map, are not the deepest part.
Twenty-One Trillion, in Plain Language
Cambone asked the kitchen question. Twenty-one trillion that cannot be accounted for. How does that vanish without a riot?
Fitts’s answer starts with law, not with a suitcase.
In the early 1990s Congress required the federal government to produce audited financial statements. From 1996 on, she says, the government announced it would not obey those laws. No clean audit. A company that did that would be thrown off an exchange. Its banks would freeze. The U.S. Treasury kept borrowing. The New York Fed and its member banks kept running the accounts.
If you can issue paper that never lands on a public balance sheet, she said, anything is possible.
In 1995 an attempt to put federal credit on a sound basis — especially baby-boomer retirement promises — failed in a bitter shutdown. Fitts says the head of one of the country’s largest pension funds later told her: they have given up on the country. They are moving the money out. After that, she notes, the Fed and the New York Fed took shares in the Bank for International Settlements. From October 1, 1997, large sums began to show up as “undocumentable adjustments.”
Cover stories say those lines are only bookkeeping. Fitts’s church example is the rebuttal she uses on radio. If your church has a $500,000 budget and $6 million goes undocumented in a year, you do not accept “it’s just an entry.” You demand an audit. She says the Army has posted undocumentable adjustments many times its budget.
Her running tally: $4.4 trillion missing from fiscal 1998 through 2001. On September 10, 2001, Donald Rumsfeld said $2.3 trillion could not be tracked at the Pentagon. The next day, she notes, offices tied to those records were among the wreckage. After that, the missing-money story went cold. Then came the financial crisis and, in her telling, some $29 trillion of bailouts — more than three times the country’s single-family mortgage book. Whatever it was, she said, it was not only mortgage fraud.
In 2015, Obama’s last year, another Pentagon figure landed: $6.5 trillion in one annual gulp. Fitts was already near $12 trillion on air. Mark Skidmore, a professor at Michigan State University, heard her, assumed she was wrong, opened the statements, and called back. Students then walked HUD and Defense year by year. Fitts had $12 trillion. Skidmore found about $9 trillion more. They published $21 trillion through 2015.
The official reply has always been that undocumentable adjustments are failed reconciliations, not cash loaded onto a truck. Fitts’s reply is scale. A church does not shrug at 12 times its budget. A republic should not either.
Then came the quiet rule.
FASAB 56 and Secret Books
During the Kavanaugh hearings — “very distracting, very attention getting,” Fitts said — Congress and the executive branch adopted Federal Accounting Standards Advisory Board Statement 56. In her reading it lets a secret process pull a secret slice of the government’s books out of the public statements. Not only the 24 main agencies. More than 150 governmental entities. And, through classification law, big banks and contractors that feed those entities.
If that reading holds, a large share of the issuers in the U.S. bond market and the large-cap stock market can keep a second set of books the public never sees. Fitts says she used to plough through HUD and Defense financials. After Statement 56 she stopped. “Who knows what it means? You don’t know. It’s make believe.”
Where did the money go? She names a growing black budget after the National Security Act era. Taxpayer-financed technology, she believes, walked into Silicon Valley. In 1995, she argues, the people running the system gave up on the current structure and began a slow coup: keep the old machine running, move assets into a new one, then dissolve the old one. Bankers already run monetary policy. In the new design they want fiscal policy too, and they want a large slice of the economy to stay dark.
That is her charge. It is not an indictment a court has stamped. It is why she talks about resets as an engineering project, not a surprise.
Energy as the Next Squeeze, Tokens as the Next Bubble
Cambone asked for today’s Kavanaugh — the show in front while the rule moves in back.
Fitts pointed at two files on the Solari Report. One is an energy timeline. She calls the present energy fight “COVID 2.0”: a shift of market share from small players to large ones, from open trade to closed trade, with fuel as the lever. Health was the first pass. Energy is the second.
The other file is programmable money. She says the largest bubble machine she has ever seen is being legalized in stablecoins and digital tokens, with a launch window she puts near the start of next year. She does not know if it will work. She has seen a lot of bubbles. If it works, she expects explosive bubbles “all over the planet.”
The plumbing, in her sketch: retail is leaving Treasuries. Norway and other official names talk about selling sovereign paper. Treasury’s stablecoin plan, as she reads it, is to sell dollar tokens to households worldwide and pull $3 trillion to $4 trillion into Treasuries by the end of the decade — not huge against the whole market, but huge as a new retail pipe. Crypto rails. Google Pay, Apple Pay, mobile wallets. Leverage “exceptionally generous.” She compares it to pallets of cash in Iraq, except the pallets are apps.
Hold that, she said, and add tokenized stocks and bonds. Coinbase and peers have talked about large-cap U.S. names with 20-times margin on-chain. Martin Armstrong has talked about bringing four billion new people into U.S. markets. Marc Andreessen tweeted that the U.S. is 68% of the world equity market and, unless something goes horribly wrong, could be 90%. That, Fitts says, is the channel strategy. Get the world in the pipe. Then the pipe has a switch.
Why She Fears Stablecoins More Than a CBDC
Cambone heard central-bank digital currency. Fitts corrected her. Stablecoins and tokens.
Programmable money that controls you is the problem, she said. The wrapper can be a CBDC, a stablecoin, or a card network. The leash is the issue.
A Fed CBDC needs Congress. In this climate it may not get it. The Fed is a creature of statute. Congress can demand disclosure. Private stablecoins, mandated to apply Treasury’s rules, give the state a control layer without FOIA, without the Fed’s public-policy duties, and with room to skim. She compared it to Twitter-era censorship: government force, private letterhead. “I hate CBDC. But the stablecoins are far more dangerous than CBDC.”
If she had Scott Bessent in a room with no mics, she would not speechify. She would ask. If you plan to market trillions in stablecoins to the world, why brag about seizing a billion dollars of Iranian wallets? Why sell a product with that demonstration attached? And why, in her charge, hand Elon Musk IRS and payment-system data? She says she thinks she knows. She would still ask.
What She Tells a Family With $8,000
Cambone asked for one useful move this month. Mortgage. Four people. Thin savings.
Price is not the first question, Fitts said. Title is. Is it yours? Can someone switch it off?
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Then she told the litigation story that is her whole portfolio theory. Before the case she had gifted or lent about $250,000 to family and friends. The case tried to cut her credit and her income. An uncle who bought some of her farmland got a midnight subpoena. Most of the family wanted to drop her so the heat would pass. One relative, Michael, would not. Over eleven years, she says, $250,000 came back in gifts and repayments. Without it she would have been finished. When she finally funded a broken 401(k) and paid the tax haircut, her CPA wanted the retirement account refilled. She bonused the money into the “people bank.” That, she said, is the only bank that cannot be switched off.
Italians, she told Cambone, already live that way. Empires rise and fall. Family float stays. Americans, she said, have to learn they are in a conflict and circle up.
She is an optimist on the control grid for three reasons. States can still write analog guardrails. Enough cash and local trade can keep a full-digital trap from closing. And the dream of running the universe from a server farm is, in her word, absurd. Models that arrogant fail. She will not bank only on failure. She wants the analog left alive on purpose.
Move the Deposits
Faith in institutions? Rare exceptions. Faith in people who organize? Yes.
Her data-center example is the sermon. A thousand protesters. Pull their IRA and 401(k) lists. Many of them, she says, are financing the thing they came to damn. If those same people stopped funding the banks she ties to the crisis and the missing-money years, stopped funding firms they believe poison their kids, and financed food, health, and firms that actually make things, that would be a revolution votes cannot deliver.
The reset, in her calendar, did not start last Tuesday. It started in August 2019 at Jackson Hole, with a BlackRock Investment Institute paper the central bankers reviewed — the “Going Direct” plan, as she names it. COVID, in her telling, was the first big piece: trillions upstairs, small firms and farms shut downstairs, assets bought on the cheap. Energy is the second piece. Every 80 to 120 years, she says, central banks run a reset and reach for capital, labor, and travel. This one is different if the grid goes fully digital. That would be the end of ordinary financial liquidity for most people. She says she will do everything she can to stop that.
How to Read Her
Fitts is not a random account. She held the housing books. She litigated. Skidmore’s students counted what the agencies themselves printed as undocumentable. FASAB 56 is a real statement. Rumsfeld’s $2.3 trillion line is on tape. The Going Direct paper is a real Jackson Hole document.
She is also a prosecutor of her own case. “Missing” in her mouth means the public cannot follow the money. In a government accountant’s mouth it often means the ledgers do not tie. Those are not the same sentence. A reader who wants a republic that can be audited does not have to accept every coup narrative to want the audit. A reader who wants analog options does not have to accept every token-margin forecast to want cash that does not need permission.
For people who watch gold and Canadian mines, her useful fragment is narrower than her cosmology. If money can be programmed, the asset that matters is the one without a leash. Physical metal is one such asset. So is a farm. So is a family that will still take your call. A mining share is still a digital claim on a company. Treat it as such.
Conclusion
Fitts left the room rather than break the law, then spent thirty years saying the room never published a clean book. She thinks the next leash is a private token with a public switch. She thinks the counter is cash, analog trade, and deposits moved toward work you can live with.
You do not have to take her $21 trillion as cash in a vault. You do have to decide whether a government that will not produce a clean audit, and a payment rail that can freeze a wallet, deserve the benefit of the doubt. That choice is not a trade. It is a household.
Disclaimer
This article is based on a recorded interview between Daniela Cambone and Catherine Austin Fitts. Claims about undocumentable adjustments, FASAB 56, stablecoin policy, and private threats are Fitts’s account unless attributed to public documents. Government accountants have long described undocumentable adjustments as reconciliation failures, not proven cash theft. This article is not investment advice and not a recommendation to buy or sell gold, silver, or any security. Speak with a licensed adviser. The author and publisher accept no liability for actions taken on this article.