November 24, 2013 By Joseph P. Farrell

Every now and then one has a conversation that simply has to be memorialized somehow, and this certainly is the case for the conversation former Assistant Secretary of Housing and Urban Development Catherine Austin Fitts and I had the past two days. We ranged a far field, talking about the May 6, 2010 "flash crash" to the Vatican Bank. And it is the latter with which we are now concerned, for what she told me is truly significant, and it is worth passing along. The significance is evident in the fact we do not really know what scenarios it may signify, but more of that in a moment.

The news with which we are concerned is the hiring of the accounting firm of Ernst and Young by Pope Francis I to conduct an audit of the Vatican city state administration, which would include, but not be limited to, the Institute for Religious Works, i.e., the Vatican Bank:

Vatican Hires International Accounting Firm to Get Books in Order

At one level, this is highly significant in and of itself, for it suggests that there is a sweeping change under way in the manner in which the city state conducts its day to day business, a change toward more openness and transparency and away from the institutional secrecy that has allowed the Vatican bank to be used as a conduit for all sorts of mischief, including the now well-known episode of its role in helping the CIA launder money into Italy to defeat a potential Communist party victory in that country's 1948 elections. Such a transparency is essential not only to the "pivot to 2nd and 3rd world" that I have suggested may be underway within the Vatican, but also if it is to play any role in the larger emergence of a "global market" or, for that matter, in the possible conversion of SDRs (special drawing rights) into a global currency. What we discussed, and are suggesting, is that one possibility in this soup of high octane speculation is that the Anglo-American financial elite, in their search for a model to replace the central-banking-debt-war paradigm, are planning to retain at least one part of their old and indeed ancient playbook, namely the alliance between the temple of finance and the temple of religion.

But now let's go a level deeper, and look at Ernst & Young itself. This, as it turns out, is a global accounting firm with a high reputation for its skill in auditing major institutions, and a long history. More interestingly, it is headquartered in London. Such a firm would be in a position to "audit the auditors" of the Vatican bank, and indeed, be able to trace years if not decades of chicanery through the process. Its hiring suggests that at one level, Pope Francis was not the instigator but merely signed off on a process internal to the Vatican, and, with its London base, a process perhaps external to the Vatican and indeed the Roman church itself.  Indeed, the London connection might signal an attempt to maintain the Vatican's European connection, to prevent the pivot out of Europe, and perhaps even to pry the Vatican away from the US orbit and relationship as a part of an ongoing quiet tug-of-war between London and New York to be the financial capital of the western world.

There is, however, another factor, and it is the most important of them all, and one can hardly overstate its significance, nor overestimate the many different types of scenarios that it suggests. If one goes to page 193 of this link...:

BIS report pdf learns that the same accounting firm is the auditing firm for the Bank of International Settlements, or BIS, in Basel, Switzerland, and this suggests that the Vatican Bank is being brought not only into the same standards of auditing as the BIS itself, but also that the two are being brought closer together, which makes the scenario suggested above - the creation of a role for the Vatican in a global financial order - is indeed the game plan.  Lest we forget, the BIS was the interwar brainchild of Montague Norman of the Bank of England, Benjamin Strong of the NY Federal Reserve, and Hjalmar Schacht of Germany's Reichsbank, and it was chartered with an explicit proviso between the member nations that, in the event of war among its members, none would attempt to seize its assets. In effect, the BIS - a bank - was given a kind of national or even supra-national sovereignty, which closely parallels the papacy's own claims, and its own status as a sovereign entity.

At a still deeper level - and I will leave it here to allow people to think of all the possible "high octane ramifications" - my medieval history students will remember that I long ago said that the oldest political chancery in continuous operation in the world, the one with the most experience, is the papacy. This also means that it is  the oldest and most far=flung human intelligence gathering network(or HUMINT for those in the intelligence trade), and even more importantly, as Secretary Fitts observed in our conversations, it also sits on top of the world's largest intergenerational pile of equity (think of the real estate alone), and endowment.  Once viewed in that way, its enforcement mechanisms - the inquisitions, the crusades and so on - throughout history make a great deal of (brutal) sense.

...and there is, of course, much more that could be said, but it is best to allow the reader to say in in his or her own mind.

See you on the flip side.