The Great Taking by David Rogers Webb

"What is this book about? It is about the taking of collateral, all of it, the end game of this globally synchronous debt accumulation super cycle. This is being executed by long-planned, intelligent design, the audacity and scope of which is difficult for the mind to encompass. Included are all financial assets, all money on deposit at banks, all stocks and bonds, and hence, all underlying property of all public corporations, including all inventories, plant and equipment, land, mineral deposits, inventions and intellectual property. Privately owned personal and real property financed with any amount of debt will be similarly taken, as will the assets of privately owned businesses, which have been financed with debt. If even partially successful, this will be the greatest conquest and subjugation in world history."

Sometimes a book hits you with a central idea that seems at first so preposterously unlikely that you can't help but laugh out loud (as I did) and think, "this is all conspiracy theory." 

But if there's anything the past three or four years have taught us, it's to perk up and pay attention when you hear a conspiracy theory. Lately they sure have a knack for coming true.[*]

There's another thing that happens when you read a book like this: your brain does whatever it can to make The Taking not be true. It spins up all kinds of defense mechanisms to limit the mental discomfort of these disturbing ideas. In fact, I was so struck by the spinning pushback of my own brain that I did a video on my Youtube channel on this very topic.

 

Which takes us to the central notion of what this book offers: it gets you to think, for the first time, about the plumbing underneath the financial system--and how it might be used against you. 

When we think about our investments--mutual funds, stocks, bond funds, or whatever else we own--we rarely think about the legal and custodial infrastructure behind everything. We just go to our brokerage firm's website or app and click buy or sell. Nobody thinks about what's behind the curtain: who clears trades, who verifies them, who holds database or recordkeeping privileges over everything, who umpires any confusion or conflict over ownership, and so on. We simply don't think about the various custodians running all the plumbing. 

Ironically, it's just like real plumbing: the only time we think about it is when it doesn't work. And then it's too late--you've got turds all over your bathroom floor. 

Bitcoiners teach us "not your keys, not your coins," driving home the point that if your Bitcoin is custodied with someone else you do not own your Bitcoin. However, in the tradfi markets everything is custodied by somebody else and we as investors have little choice but to go along with it. We don't know how that system is run, who's running it, what its fragilities or flaws might be, what might go wrong, or how the system could be used to rug everybody and to seize property. 

Thus this author has generously offered a book that gets you thinking about sovereignty, control and custody in all possible senses of the words. If you really think about it, most ownership of most things comes only via intermediaries! We place a lot of trust in these entities--whether we're aware of it or not. Maybe we shouldn't. 

Finally, if you'd like to learn more about this book and the ideas behind it, here are a few resources: 

1) A free PDF/public domain copy of The Great Taking

2) An extended interview with author David Rogers Webb by Daniela Cambone, about the book itself as well as the author's background. [Note this interview is at times frustrating: the author (as earnest and genuine as he is) tends to ramble, often struggling to stay on topic]

3) A discussion of The Great Taking on my Youtube channel, covering issues of self-sovereignty and whether this book is something to really be alarmed about, followed by a meta-discussion about epistemic discomfort with books like The Great Taking.

 

Footnote: 

[*] By the way, this takes us to another life heuristic for the current era: get yourself a conspiracy theory friend! It's the only way to know what's going to happen. I wish I were kidding. 

[Readers familiar with this blog know what's coming: a warning! Don't read any further. What follows is a long (and I mean hilariously long) series of notes, quotes and thoughts on the text. They are to help me order and remember my thinking, they're not really for you! I mean, feel free to read them if you want (or maybe skim the bolded parts), but seriously, you ought to value your life more. You have better things to do: self-sovereignty to develop, weights to lift, sats to stack, cigars to smoke, laughably cheap meals to cook, finances to conquer, friends to spend time with, books to read, etc.] 

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Notes:

Prologue:

vii: "Presently, as we well know, families are divided. People are experiencing a kind of isolation, perhaps not physically, but in spirit and mind. This has been made to happen through the dark magic of false news and narrative. This alone has been a great crime against humanity. The tactical purposes are many: to confuse and divide; to cause disengagement; to demoralize; to instill fears and to introduce false focal points for these fears; to manipulate the historical narrative; to create a false sense of the present reality; and ultimately, to cause people to acquiesce to what has been planned." 

ix: Comments here on his family's history in Cleveland as the US de-industrialized: his family wasn't prepared for it: "it seems they did not get the memo about what was coming." The family business, a medium-sized machine/fabricating shop at its peak, collapses by the early 70s.

x: This author got his awakening to the Fed/fiat system at a very young age: 12! His father was 12 when the 1933 Bank Holiday and gold seizure happened during the Great Depression.

xi: Thumbnail sketch here of the secret meetings leading to the creation of the USA's Federal Reserve Bank [Note: for those who want to learn more about this subject, Ed Griffin's The Creature From Jekyll Island is mandatory reading]

xivff: Background on the author: he parlays a job in computer systems into a job on an M&A team, barely avoids taking a job with Ivan Boesky's firm; also luckily doesn't  take a job with Rothschild right before it collapsed after the '87 crash; then takes a job with a $1.3 billion PE firm for half what he was making doing M&A. Commutes and hour and a half each way from Chatham, NJ, to the Manhattan, etc. The PE firm had all attorney partners and none of them knew financial analysis. (!) [The deal he's talking about here was to acquire LCI Communications, thus it looks like he was likely working for Warburg Pincus]

xvii: He quits, can't abide by the ridiculous hours and time away from his family. They move back to Cleveland Heights, OH. He started a fund with partners, grows it to $2B in assets over nine years, he runs the trading and trading strategies. Then LTCM happens: "Through direct handling of all trading, I could see that something significant had changed in the internals of the market. It was plain to me that this was not just an atmosphere of crisis but the beginning of a real crisis." He gets kicked out of the firm while on vacation, but then the employees stage a revolt and demand he get full control of the hedge fund. 

xviii: "By the late 1990's, I had understood that money creation by central banks was dwarfing real economic activity, and that the actions of the Federal Reserve were determining the direction of financial markets. This was considered to be conspiracy theory at the time, even by my partners. I developed a way to anticipate changes in the direction of the financial markets based on changes in the rate of growth of the money supply. This was being driven by open market operations of the New York Fed. [Basically you might say here that he learns "don't fight the Fed"] 

xvix: On his "cream of the crap" investing strategy: "I developed a way of using hundreds of carefully selected positions on the short side, dubbed 'the cream of the crap.' Using this system, no one position could hurt us badly, and, if I did it right, it would work much better than an index." [This time period sounds like around 1999-2000-ish.] 

xix: [Interesting insights on thinking about thinking in this paragraph]: "The intuitive mind, when adequately and correctly informed, can be miraculously powerful, knowing immediately what the rational mind cannot yet see. On the other hand, if it is given bad information, and if incorrect assumptions are not surfaced and challenged, it is a dysfunctional disaster. The rational mind can be employed to inform the intuitive with vetted information, and to continuously test what the intuitive mind thinks it knows. With cooperation between these aspects of the mind, one can drill down to examine detail, zoom out to see bigger implications, and vice versa."

xx: [Another good insight here about learning domain specific terminology by talking to people and eventually getting to the substantive questions/issues after you know your way around their "language"]: "I had found through my due diligence work that it was possible to become conversant within a surprisingly short period of time even in technical issues with leaders in a field. It was done by doing it. After the first conversation, I was better equipped for the second. With each conversation, I was able to better hone in on the substantive questions. By the third conversation, the other person actually became interested in speaking with me, because I had just spoken with two people in their field about some interesting issues. And it built from there. I could do this with physicians, chemical engineers, and even neuroscientists. They sometimes asked if I had trained in their field."

xxi: "My mother asked what courses I had taken or books I had read to teach me to do what I was doing. I responded, 'Mom, there are no books explaining this.'" [Holy cow is he ever right about that.]

xxiiff: He has a meeting with Soros, they are talking about the odds of a coming crash due to extreme excess capital spending in the USA. Soros hears out Webb's thinking: "'This is very good!' He did not disagree with me about the bust, but said 'They cannot allow the equity culture to fail.' I said, 'What can they do that they haven't already done.' He said in answer, 'You don't know what they can do.' So, in such a moment, even George Soros spoke of a they." [The irony here is this is YEARS before the GFC: the author doesn't say exactly but he mentions meeting Soros again in early 2003, so this "crash call" was so early as to be disastrous.] "The next couple years nearly killed me."

xxiiiff: [On the equities markets as a sort of closed system, if you don't consider the Fed]: "The markets had always functioned largely as a closed system (excepting the open market operations of the New York Fed, which I had learned to monitor and interpret). I could see flows from one sector of the market to another. In order for some areas of the financial markets to rise significantly, other sectors were being sold to provide the funds. I looked for opportunities to work opposite to these flows and rotations, buying what others had orders to sell, and selling what others wanted to buy, but drawing them through the bid/asked spread." Webb then starts seeing the market levitate without countervailing "flows": all sectors, stocks and bonds, start going higher. He concludes that created money was being injected into the financial markets. "It is not understood even now that this was the actual beginning of 'Quantitative Easing' (QE), more than five years before it was officially announced during the Global Financial Crisis. I saw it as an act of desperation, and again felt my responsibility to protect people."

xxiv: He sees all sorts of crash indicators [but, again, WAY too early: early 2004]; he discovers the government makes methodology changes in counting foreclosures, which masks reality; cites lots of other government disinformation about the economy: "I was shaken. Why would our own government work to give the public a false understanding of what was happening?" 

xxv: On money creation and debt expansion driving spending and GDP.

xxvff: "What is the job of the Fed Chairman? In the case of The Maestro it seems to have been to obfuscate what was really happening. Why would he do that? Answer: The Fed chairman does not work for the public; he works for the people who own and control the Fed. You are not allowed to know who these people are. Why would the people who control the Fed wish to obfuscate what was happening? Now we are getting somewhere. There is something much, much bigger behind this. That's what this book is about."

xxvi: Discussion of the lax lending standards of the pre-GFC era; various securitized assets created, CDOs, etc. [Note also this quote: "CDOs alone had reached the size of global GDP" is misleading, perhaps the notional value of these CDOs could be that big, possibly, but even that is misleading: that's like describing the aggregate market value of put options in terms of the aggregate underlying equity value contracted by those options: in reality the options' market value is a tiny fraction of the latter's notional value.]

xxvii: "With a significant short side in the rising market, we were losing money, but I felt it was my responsibility to continue." [Again, this is really, really early to start shorting the market if it's still around 2004; it's a way to quickly destroy your LPs!]

xxvii: On the importance of prime brokers, and how if you're short you are very VERY exposed to your prime. [It's worth recalling Marc Cohodes here, who famously got fucked over by Goldman Sachs as the firm unilaterally altered their custodial agreements without advance notice, which resulted in putting Cohodes and his fund out of business in the teeth of the GFC.]

xxvii: He tries to explain his concerns to everyone around him about things like rising debt levels, the hollowing out of the industrial base of the USA, the leverage in the system due to CDOs and securitized mortgages, but he can't get anybody to listen or even understand him [!!! holy cow this must be a lonely, lonely feeling...] "I needed to understand how to get through to people." He actually goes door to door to talk to civilians about this stuff.

xxviii: He votes for Obama but is appalled: "But there was no change coming with 'Change you Can Believe in' Obama, whose cabinet oddly came to conform to the candidate list of Citigroup. After that, I stopped voting." [Brother, I know the feeling.]

xviii: In 2008, I noticed the failure of a small broker dealer in Florida [really curious: which broker dealer might he mean here??] and I was shocked to learn that client assets owned outright with no borrowing against them were swept to the receiver and encumbered in the bankruptcy estate. I had to understand how this could possibly have happened, and eventually uncovered that ownership right to securities, which had been personal property for four centuries, had somehow been subverted. This would be born out further in the bankruptcies of Lehman Brothers and MF Global." [My understanding is that this isn't correct: assets at broker dealers are segregated, and this should not happen; further, I don't think it did happen with Lehman.] 

xxix: He moves to Sweden [!] In April of 2011. "I was asked to speak at an investment conference in Stockholm. The title of my presentation was 'Paradigm Collapse.' It was the first time I spoke publicly about the gutting of investor protections, including ownership rights to securities, and of the context for understanding why this was happening."

xxx: "I have not wanted to write this book, or have anything to do with this, but i[t] has become unavoidable. It is like exorcising a demon, which has plagued me and my family. It must be done. And then, I will be done. I am self-publishing this because I don't want to involve a lot of people. I just need to get it out. I expect that there will be efforts to criticize me personally and this work."

xxxff: "It is important to note that what is exposed here is not conjecture. It is found in authentic primary source documents, in which the planners themselves lay out their plans. I wish to acknowledge the important contribution of my extraordinary friend, who found key documentation of the Legal Certainty Group in one of his many sleepless nights. I thank the miraculous people who have helped me and kept me alive... You are about to be confronted with quite shocking, depressing material. You don't want to know about this. I don't even want to know about it."

I: Introduction

1: "What is this book about? It is about the taking of collateral, all of it, the end game of this globally synchronous debt accumulation super cycle. This is being executed by long-planned, intelligent design, the audacity and scope of which is difficult for the mind to encompass. Included are all financial assets, all money on deposit at banks, all stocks and bonds, and hence, all underlying property of all public corporations, including all inventories, plant and equipment, land, mineral deposits, inventions and intellectual property. Privately owned personal and real property financed with any amount of debt will be similarly taken, as will the assets of privately owned businesses, which have been financed with debt. If even partially successful, this will be the greatest conquest and subjugation in world history."

1: "We are now living within a hybrid war conducted almost entirely by deception, and thus designed to achieve war aims with little energy input. It is a war of conquest directed not against other nation states but against all of humanity." Those behind this, per the author include invisible central bankers, those who control the money printing [or are "near" the money printer--basically cantillon insiders, although he doesn't use this term]. 

2: "The people you are allowed to see are hired 'face men' and 'face women.' They are expendable." This has been attempted before: see for example the Great Wars period, the Depression between them; but there are now many more tools by which to perform an operation like this.

2: See also the narrative that will be used: we all lived beyond our means, it is our fault, and the financial system now has to be "restarted": Et voila! Here is your central bank digital currency! "Money is an extremely efficient control system. People order themselves upon money incentives"

2-3: On money velocity: V = GDP/Money Supply; see Milton Friedman writing about the collapse in money velocity from 1880 to WWI; within a few years the Russian, Austro-Hungarian and Ottoman Empires as well as the Qing Dynasty all failed, note also the slow collapse of the British Empire over this time. 

3: "While there was widespread deprivation [during this period], selected banking interests took the collateral of the thousands of banks which were forced to close, as well as of a great many people and businesses large and small--the indebted. In the U.S., gold held by the public was confiscated. But most importantly, closely held secretive private control of central banks and money creation was maintained, as was the aforementioned control over society's key institutions, including political parties, governments, intelligence agencies, armed forces, police, major corporations, and media.

     "The heirs to this control position have known for many decades that such a collapse in VOM would come again. They have been preparing. For them, it is an absolute imperative to remain in control through the collapse and 'Great Reset'; otherwise they risk being discovered, investigated and prosecuted. They are not doing it for us. There is no noble purpose."

4: "If something does not make sense, it is necessary to change one's perspective and aim for a larger understanding. Crises do not occur by accident; they are induced intentionally and used to consolidate power and to put in place provisions for measures that will be used later."

4-5: "Profound decline in VOM [led] to the Financial Panic of 1907, which was used to justify the establishment of the Federal Reserve System. The Federal Reserve Act was passed by Congress in the quiet days before Christmas, 1913. Archduke Ferdinand was assassinated six months later."

See the VOM chart from page 5:

5: "And so, perhaps the announcement of the 'Great Reset' has been motivated not by 'Global Warming' or by profound insights into a 'Fourth Industrial Revolution', but rather by certain knowledge of the collapse of this fundamental monetary phenomenon, the implications of which extend far beyond economics."

5: "Something has been planned for us, but not for the reasons you have been given. How might we come to know something about the intentions of the planners? Perhaps, by examining their preparations?"

II: Dematerialization

6: "There are now no property rights to securities held in book-entry form in any jurisdiction, globally. In the grand scheme to confiscate all collateral, dematerialization of securities was the essential first step." 

6-7: See the CIA's Bill Dentzer, Jr.'s own memoirs; the CIA was given this dematerialization as a mission; Dentzer went on to run New York State's banking regulatory body, he was appointed by then-governor Nelson Rockefeller, then put in charge of DTC, Depository Trust Corp, and stayed there for 22 years to see dematerialization through. Transition to "book entry" and the elimination of physical stock certificates.

7: "DTC eventually became the model for the Central Securities Depository (CSD) and Central Clearing Counterparty (CCP), the purposes of which will be explained later."

III: Security Entitlement

8: "Since their beginnings more than four centuries ago, tradable financial instruments were recognized under law everywhere as personal property (perhaps that is why they were called 'securities'). It may come as a shock to you that this is no longer the case."

8: The author gives us an analogy: "Let's say that you have purchased an automobile for cash. Having no debt against the vehicle, you believe that you now own it outright. Despite that, the auto dealer has been allowed by a newly invented legal concept to treat your car as his asset, and to use it as collateral to borrow money for his own purposes. Now the auto dealer has become bankrupt, and your vehicle along with all of the others sold by the dealer are seized by certain secured creditors of the dealership, with no judicial review being necessary, as legal certainty was previously established that they have absolute power to take your car in the event of the bankruptcy of the dealer."

8-9: "Now, to be clear, I am not talking about your car! I am illustrating the horror and simplicity of the lie: You are led to believe that you own something, but someone else secretly controls it as collateral. And they have now established legal certainty that they have absolute power to take it immediately in the event of insolvency, and not your insolvency, but insolvency of the people who secretly gave them your property as collateral. It does not seem possible. But this is exactly what has been done with all tradable financial instruments, globally! The proof of this is absolutely irrefutable. This is wired to go now."

9: "Essentially all securities 'owned' by the public in custodial accounts, pension plans and investment funds are now encumbered as collateral underpinning the derivatives complex, which is so large--an order of magnitude greater than the entire global economy--that there is not enough of anything in the world to back it."

9: "...in the implosion of 'The Everything Bubble', collateral will be swept up on a vast scale. The plumbing to do this is in place. Legal certainty has been established that the collateral can be taken immediately and without judicial review, by entities described in court documents as 'the protected class.' Even sophisticated professional investors, who were assured that their securities are 'segregated', will not be protected."

9-10: These are the key facts:
* Ownership of securities as property has been replaced with a new legal concept of a "security entitlement", which is a contractual claim assuring a very weak position if the account provider becomes insolvent.
* All securities are held in un-segregated pooled form. Securities used as collateral, and those restricted from such use, are held in the same pool.
* All account holders, including those who have prohibited use of their securities as collateral, must, by law, receive only a pro-rata share of residual assets.

* 'Re-vindication,' i.e. the taking back of one's own securities in the event of insolvency, is absolutely prohibited.
* Account providers may legally borrow pooled securities to collateralize proprietary trading and financing.
* 'Safe Harbor' assures secured creditors priority claim to pooled securities ahead of account holders.
* The absolute priority claim of secured creditors to pooled client securities has been upheld by the courts.

10: Account providers are legally empowered to 'borrow' pooled securities, without restriction. This is called 'self help.' As we will see, the objective is to utilize all securities as collateral."

10ff: "I assure you that this is not conjecture. You would be greatly mistaken in dismissing this as 'conspiracy theory', which is a common reaction to so much unpleasantness. It is possible to really know about this. The documentation is absolutely irrefutable." [Here he follows with an extended excerpt from a transcript between the EU's Clearing and Settlement Legal Certainty Group and the NY Fed, ending with "under Article 8, the entitlement holder has only a pro rata share in the securities intermediary's interest in the financial asset in question."

12: A lot of these disturbing rules and regulations appear to come out of the EU.

13: "In the next global financial panic, what are the chances that there will be much of anything remaining in these pools of securities after the secured creditors have helped themselves?... The reason given for this legislation on legal certainty is 'demand for collateral' by 'market participants.' They are not referring to you and me, the public. 'Market participants' is a euphemism for the powerful creditors who control governments."

IV: Harmonization

14: "The 'Hague Convention on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary' [7] was drafted in 2002 and signed in 2006. It is an international multilateral treaty intended to remove, globally, legal uncertainties for cross-border securities transactions."

16: "Harmonization of this regime giving control globally to a select group of secured creditors was pushed from the highest level of the U.S. government."

18: "It took ten years of conniving, but in 2014 the way forward was made certain with the Central Securities Depository Regulation (CSDR)."

18ff: "A Central Security Depository (CSD) operates a book entry system for electronic settlement of trades and maintains a record of 'ownership.' An International Central Security Depository (ICSD) is linked to national CSDs, and it handles securities lending and collateral management... And thus, the desired goal of cross-border mobility of collateral has been achieved. How was that engineered?

    "CSDR provides for links between CSDs. National CSDs, which hold the record of ownership, are linked to the International Central Security Depositories; the transfer of legal title to customer collateral from the national CSD to the ICSD, and the use of customer collateral are thus enabled. The customer has 'ownership' in the book-entry system of the national CSD, while the collateral is held in pooled form at the ICSD level. This allows the 'cross-border services', i.e. the use of customer collateral. This is essentially the U.S. model, in which all custodians have accounts at DTC, which holds all securities in pooled form. DTC functions as an ICSD."

19: Examples from Finland and Sweden: "Once upon a time, Finland and Sweden had legal systems and national registries of securities ownership, which assured owners that their securities could not be used as collateral without express agreement. It had been possible to own and hold Swedish government bonds, for example, with absolute certainty that they could not be lost in an insolvency of a custodian. In 2006, the Legal Certainty group identified Sweden and Finland as having problematic law.

19: "In 2008, Euroclear was allowed to acquire one hundred percent of Nordic Central Security Depository (NCSD), which owned the central security depositories of both Finland and Sweden, Suomen Arvopaperikeskus Oy (APK) and VPC AB (VPC), respectively. These are now local CSDs linked to Euroclear Bank SA/NV which operates as an ICSD under Belgian law."

19-20: Skandinaviska Enskilda Banken AB (SEB) makes such a disclosure with respect to central securities depositories in Sweden, Denmark, Finland, Norway, Euroclear Bank SA/NV and Clearstream Banking S.A. [15]. Here are the shocking key passages from that disclosure:
    "In the unlikely event of a shortfall of securities the client in question will not be able to claim a right of separation but will likely be considered as an unsecured creditor without priority to the assets of the bankruptcy estate."

    "Thus, over a period of six years, property rights to securities in Sweden and Finland were deliberately subverted. These countries went from having the strongest property rights to securities to having no property rights to securities beyond an artificial appearance of ownership."

20-21: "In 2014, coincident with the EU directive on central securities depositories, shocking changes were made to Swedish law. Very few know about this, other than the people who did it." The author then goes through the legalese on prevailing law on these custodied accounts here: 

"The first paragraph states that, 'The intended disposal must be specified carefully.' That seems like a good thing, but it goes on to state the following:

     'The first paragraph does not apply if the company's counterparty or the parties to an agreement in which the company participates is another company that is under the supervision of the Financial Supervisory Authority or a foreign company within the EEA that is allowed to run comparable activities in its home country and that is under the reassuring supervision of an authority or other competent body.'
"This gives the local CSD legal authority, and broad latitude to pass legal control of customer assets as collateral to the ICSD without the knowledge or approval of the account holder. The implementation of this is now so thorough that a Swedish citizen cannot hold Swedish government bonds in Sweden as property without exposure to insolvency of the account provider, the local CSD, or of the ICSD. The securities of Swedish citizens are certainly pooled with securities being used as collateral elsewhere." 

21: "I came to Sweden in 2009 in order to be able to hold Swedish government bonds in Sweden with property rights. I was able to do that using a VP konto (account) at Handelsbanken. However, following the legal changes made in 2014, Handelsbanken completely discontinued the VP konto structure, and offered clients only custody accounts."

22: The author met with senior government officials to warn them: "In 2011, a friend who had been a State Secretary in the Swedish government arranged for me to meet with the Minister and the State Secretary for Financial Markets. I was so moved when I received the email informing me of this, tears came to my eyes; it gave me hope that in Sweden it might be possible to make a difference, and thus to turn the tide somewhere. I am forever grateful to them for that meeting; such a thing would never be allowed in the land of my birth. [Quite striking to read this. He's right, the USA has a gigantic and impenetrable bureaucratic-administrative system that a normal citizen cannot hope to penetrate it or get help from it, much less be able fight it off in some sort of adversarial proceeding. Part of the problem is nation-states do not scale well. You maybe can get access to your national leadership in a country of 10m like Sweden, but in a country to 300+m? Forget it.] They heard me out about the implications of conforming to the U.S. model, and did not disagree. They said it might be possible to avoid this if the Germans would stand against it, the implication being that little Sweden could not do it alone." [Yes, he got a hearing from leaders but they couldn't (or wouldn't) do anything anyway.]

V: Collateral Management

23: "People should either be caressed or crushed. If you do them minor damage they will get their revenge; but if you cripple them there is nothing they can do. If you need to injure someone, do it in such a way that you do not have to fear their vengeance."

--Niccolo Machiavelli

23: Note the instant cross-border mobility of capital in the modern era; the sheer amount of derivatives and financial contracts that can be used to take real things as collateral; thus there is the means to take securities (all securities, per this author) as collateral; this will be done using the "rails" of collateral management systems, which are also in place cross-border; this was done by regulatory contrivance.

24: "This was designed and deliberately executed to move control of collateral to the largest secured creditors behind the derivatives complex. This is the subterfuge, the endgame of it all."

26: "Collateral transformation is simply the encumbrance of any and all types of client assets under swap contracts, which end up in the derivatives complex. This is done without the knowledge of the clients, who were led to believe that they safely owned these securities, and serves no beneficial purpose whatsoever for these clients... And so as we have seen here irrefutably, the objective is to utilize all securities as collateral and hence to have the real practical means to take all securities as collateral."

27-8: "Inevitably following the 'Everything Bubble' will be the 'Everything Crash.' Once prices of essentially everything crash and all financial firms rapidly become insolvent, these collateral management systems will automatically sweep all collateral to the Central Clearing Counterparties (CCPs) and Central Banks. The trap, into which all nations have been herded, is ready and waiting to be sprung."

VI: Safe Harbor for Whom, and from What?

29: On significant changes to "safe harbor" provisions in the US bankruptcy code that were put in place in 2005. "This was about 'safe harbor' for secured creditors against claims of customers to their own assets."

30: The author claims that the new changes removes claw-backable transfers that would have been viewed as fraudulent in the prior safe harbor language. 

30ff: See also Stephen J. Lubbin's book The Bankruptcy Code Without Safe Harbors which comments on the 2005 changes: 

1) "A protected contract... is only protected if the holder is also a protected person, as defined in the Bankruptcy Code. Financial participants--essentially very large financial institutions--are always protected."

2) "The safe harbors as currently enacted were promoted by the derivatives industry as necessary measures... The systemic risk argument for the safe harbors is based on the belief that the inability to close out a derivative position because of the automatic stay would cause a daisy chain of failure amongst

financial institutions."

3) "The problem with this argument is that it fails to consider the risks created by the rush to close out positions and demand collateral from distressed firms. Not only does this contribute to the failure of an already weakened financial firm, by fostering a run on the firm, but it also has consequent effects on the markets generally. ...the Code will have to guard against attempts to grab massive amounts of collateral on the eve of a bankruptcy, in a way that is unrelated to the underlying value of the trades being collateralized."

31ff: Now back to the author: "The new safe harbor regime was cemented into case law with the court proceedings around the bankruptcy of Lehman Brothers. In the lead-up to the failure, JP Morgan (JPM) had taken client assets as a secured creditor while being the custodian for these client assets! Under long-standing bankruptcy law this would clearly have been a constructively fraudulent preference transfer benefitting an insider. And so, JPM was sued by clients whose assets were taken." JPM's legal team made their argument based on the new safe harbor language, and the court agreed with them: "JPMC, as one of the leading financial institutions in the world, quite obviously is a member of the protected class and qualifies as both a 'financial institution' and a 'financial participant.'

32: "And so, only 'a member of the protected class' is empowered to take customer assets in this way. Smaller secured creditors are not similarly privileged." [It is interesting to put this together with what was said during Fed/Congressional hearings after the collapse of Silvergate Bank and Silicon Valley Bank in 2023: the Fed/FDIC was willing to insure/backstop deposits at the largest banks (the SIFI banks) but was unwilling to do so for non-SIFI banks). This gives another clue to which entities are "protected"... and it also indicates that there's really no reason even for the existence of small/non-SIFI banks.]

32: "The bankruptcy of Lehman Brothers was used to establish case law precedent that the 'protected class' of secured creditors have an absolute priority claim to client assets, and that, potentially and practically, only they will end up with the assets."

VII: Central Clearing Parties

33: "Central Clearing Parties (CCPs) take on counterparty risk between parties to a transaction and provide clearing and settlement for trades in foreign exchange, securities, options, and most importantly derivative contracts. If a participant fails, the CCP assumes the obligations of the failed clearing participant."

34: See Euroclear's statement: "But, for the EU-institutions, the redline [sic] is that if a CCP fails, then the taxpayer will not be expected to pay." The author argues that this "is a subterfuge assuring that in the 'resolution' the secured creditors will immediately take the underlying assets; that is the plan, i.e., nationalization must not be allowed."

35ff: Note that DTCC, The Depository Trust & Clearing Corporation, operates two CCPs; DTCC has a market capitalization of only $3.5B, yet it underpins the entire US securities market and derivative complex, yet "CCPs must be sufficiently capitalized in order to withstand losses from both member default and non-member default loss events." Per the author: "This is one of the many open deceptions, which are unpleasant and inconvenient to see, and so, readily dismissed."

37: Again, recall the transcript between EU regulators and the NY Fed: 

"Q (E.U.): Is the investor protected against the insolvency of an intermediary and, if so, how?

A (N.Y. Fed): ...an investor is always vulnerable to a securities intermediary that does not itself have interests in a financial asset sufficient to cover all of the securities entitlements that it has created in that financial asset... If the secured creditor has 'control' over the financial asset it will have priority over entitlement holders... If the securities intermediary is a clearing corporation, the claims of its creditors have priority over the claims of entitlement holders."

37: "So, there we have it. In the collapse of the clearing subsidiaries of DTCC, it is the secured creditors who will take the assets of the entitlement holders. This is where it is going. It is designed to happen suddenly, and on a vast scale."

38: The author continues: "The CCPs are designed to fail. They are deliberately under-capitalized. The start-up of a new CCP is planned and pre-funded. This construct assures that the secured creditors will take all collateral upon which they will have perfected legal control. [He then continues, sarcastically imitating the justification that will be used] The rule of law must prevail! We would have chaos otherwise!"

VIII: Bank Holiday

[This chapter gives a good historical review of another textbook example of a "taking" and how it was contrived: the US Depression era "Bank Holiday" under FDR]

40: The 1930 bank holiday: "only the Federal Reserve Banks and banks selected by the Federal Reserve were allowed to reopen." 

40: "People with money in banks that were not allowed to reopen lost all of it. Their debts were not canceled, however; these were taken over by the banks selected by the Federal Reserve System. If these people could not make their debt payments—which was now likely, since they had lost their cash—they lost everything they had financed with any amount of debt, e.g., their house, their car, and their business."

41: See the Cleveland Trust, which was 'selected' to survive by the Federal Reserve, and then selected to consolidate debts: "I had a finance professor who told the class that Cleveland Trust had run a systematic process of foreclosing upon and evicting many thousands of families from their homes in the greater Cleveland area. After these families were evicted from their homes, and their equity wiped out, they were offered the possibility of moving back into their former homes as renters, the advantage to Cleveland Trust being that these families would pay to keep the houses heated until they could be sold. Cleveland Trust did 'well.' How did my finance professor know about this? His family was one of those many thousands of families whose home mortgage had been taken over by Cleveland Trust." [Note that this gives us one good heuristic to help deal with "takings": make sure you do not have possessions that can be foreclosed--which means pay down your debts and get out from under them.]

42: "We are led to believe that the Bank Holiday was a brilliant scheme. Well it was--for some. It was enormously successful for those banking interests who took the assets and consolidated their power. It certainly demonstrated the power of 'regime-shifting policies.' We will see that it was not just about taking peoples' homes and other stuff. As to ending the panic, perhaps that is not so difficult to do when you have fomented the panic." [Another thing to pay attention to: governments will often create problems/crises in order to impose their solutions. See also: most wars.]

43: "Is the Fed indeed 'very sorry'? Can one believe the promise that 'we won't do it again'? They have studied the lessons of the past in detail; however, their purpose has been to prepare a new and improved global version for the spectacular end of this debt expansion super-cycle. That's what this book is about."

43: "Contrary to the image of success, which has been handed down to us, the Bank Holiday did not end the Great Depression. There was no recovery which might have allowed people to service their debts and keep their property. Why was that? 'Inexplicably', the Federal Reserve kept conditions tight. [The author her quotes the Federal Reserve's own history on the period 1937-38]: 

    According to literature on the subject, the possible causes... were a contraction in the money supply caused by Federal Reserve and Treasury Department policies and contractionary fiscal policies... 

If that was a comprehensive program to assure there would be no recovery, it worked quite well. Conditions remained broadly stressful for years, and they kept price levels down, so that people had no opportunity to sell assets for paying off debts." [I'm reminded here of the quote "never attribute to malice that which can be adequately explained by stupidity" although this book certainly shows certain patterns that indicate malice...!]

43ff: See also 1933 where the Fed "had the means 'to supply unlimited amounts of currency to reopened banks' [per The Emergency Banking Act of 1933], which were, of course, only the banks selected by the Federal Reserve System. Clearly, the Fed had had the means all along to avoid the failure of those thousands of banks. A panic can be fomented easily when you run the system. They made it happen. They planned it, and then brought their solution after they got their regime-shifting policies in place."

44ff: The Federal Reserve System and the banks selected by the Fed were prepared to take things from people on a vast scale: their homes, their cars, and even their new electric appliances, which had been sold to them with the innovation of consumer credit. Did 'the bankers' need to take this property? What was the real purpose? Can you get past the idea that they were trying to help? 

     "Ask yourself: if they don't want your money, and they don't really want or need your stuff, and they're not trying to help you, what do they want? What's the point of all of their efforts?

     "This may be difficult to hear: It was deliberate strategy. It was about ultimate, complete power, allowing no centers of resistance. And so, it was about deprivation. It was about subjugation--and it still is, in more ways than we know. It was not about helping people then, and it's not about helping people now. It is all part of the same deliberate herding of humanity and elimination of any pockets of resilience, which plagues us still... This is exactly what is now set up to happen with all securities

owned by the public, globally."

45: The Gold Seizure/Executive Order 6102: "The stated reason for the order was that hard times had caused 'hoarding' of gold... However, [from Wikipedia] "the main rationale behind the order was actually to remove the constraint on the Federal Reserve preventing it from increasing the money supply during the depression."

45: "The executive order to confiscate all gold owned by the public was made under the authority of the Trading with the Enemy Act of 1917 [Just another example of using any law or legal precedent, no matter how far afield you need to go, in order to do what you need to do. This is making me rethink the idea that "rule of law" countries are so much better! Maybe it's more accurate to think of "rule of law" domains as just another type of playing field on which government actions like this are rationalized and justified], which had been enacted four years after the creation of the Federal Reserve. The act had been used to confiscate the property of interned natives of Germany, and more. This is described by Daniel A. Gross in his article The U.S. Confiscated Half a Billion Dollars in Private Property During WWI [39], whose subtitle reads: 'America's home front was the site of interment, deportation, and vast property seizure.'" [And this is likely where we got the "precedent" for internment and property seizure of Japanese in the USA during WWII.]

45-46: "The rationale is incredible: You are hoarding gold, so we will take it and do what with it? Hoard it! As we have seen, once they had taken the gold of the public, they did not then use the resource to expand credit. People remained in a debt trap. The deprivation continued and even worsened. Clearly, the need to expand credit served only as a pretext for the confiscation of the public's gold, which was the real premeditated objective."

46: "I asked my father why people had turned in their gold. He said that if you did not you were a criminal, but further, that there was nothing you would be able to do with it because you could not legally transport or sell it. So, essentially, the use and value of gold had been confiscated. This was certainly the case because it remained illegal for a U.S. person to own gold for more than forty years!" [The author leaves out here that the US paid people the then-current market price ($20.67/ounce) for the gold that they turned in. Note also that the US gov't immediately devalued the US dollar in gold terms (to $35, if I remember correctly) thus this actually was a credit expanding and inflationary move here. It's worth noting that these items don't quite fit in with the author's arguments.]

46: "Perhaps gold will not be confiscated immediately this time around. Gold has not been targeted as the essential collateral backing as was the case under the Federal Reserve Act. In this go-round it is securities of all kinds, globally, which have been set-up as the collateral backing underpinning the derivatives complex."

47: "And so, large-scale closure of banks and taking of bank deposits is not unprecedented. Holders of cash in banks are unsecured creditors with no enforceable claim to their money... Then all deposits and assets will be taken by the 'protected class' of secured creditors. This is where it is going."

47-48: Some wealthy people may think they will hide from this by keeping their money with the 'too big to fail banks.' Perhaps it will seem that they have succeeded in this through the early stages of the banking crisis. However, this 'regime shift' is designed to be all-encompassing. [Interesting set of assertions here.] ...Ordinarily, the deposit-taking subsidiaries should be quite secure. But a strategy has been set up so that the deposit taking subsidiaries of the 'too big to fail banks' can be separately bankrupted when the time comes. How can we know that? ...The Fed has the power to give exemptions to any bank to move derivatives into deposit-taking subsidiaries, and it has done so. It has been tested, and on a large scale. Apparently it is easily and unilaterally done by the Fed by granting exemptions to Section 23A of the Federal Reserve Act. [The author gives examples here of exemptions given to BofA as well as a bunch of other SIFI-size banks: Ally, Fifth Third, CIT, GE Capital, Morgan Stanley, Goldman Sachs, JPM, etc.] ...So individual banks had derivatives books the size of the entire global economy, and they moved them into their deposit-taking subsidiaries with the approval of the Fed."

49: "Why has this been tested on such a large scale? It seems they are quite serious about something. Is the intent to make the deposit-taking subsidiaries safer? What is the real purpose?

     Used at the appropriate time, this will assure the collapse of the deposit taking subsidiaries of the 'too big to fail' banks, allowing the taking of money comprehensively, including from depositors in these deposit-taking subsidiaries, leaving essentially no money anywhere, and no pockets of resilience or of potential resistance. Meanwhile, in the chaos of the ensuing global wave of insolvencies, peppered with contrived existential threats, the 'protected class' of bank holding companies and their subsidiaries designed for continuance will not only survive, but thrive, taking essentially all collateral. This will be put forth as an imperative, i.e., that they must survive and be strong for the sake of humanity, so that the system might begin again and we all might move forward. People will be desperate and simply want the terror to stop."

49: Note also FDIC could easily be "bankrupted" itself: it has at most 128B in funds and can draw up to 100B more at the Fed window; the combined 228B will only cover 2% of insured deposits. (!)

50: Resolution powers over the captured banking systems, including around 3,000 banks and other financial institutions, have been conferred to a resolution authority, the Single Resolution Board (SRB), which will execute a Single Resolution Mechanism.

51: "The Single Resolution Board has directed the biggest banks to prepare for solvent wind-down (SWD). Again, that sounds like a good thing, but given the scale of the bubble, this cannot possibly mean the solvency of the entire banking system. I suggest that what this means is the preparation of certain portions of the biggest banks to remain solvent."

53: Thoughts on The Atlantic Council, a military/geopolitical think tank, which is now focusing on CBDCs: Here, one can see that, as of this writing, central banks in 114 countries representing 95% of the global economy are working on CBDC, that 11 countries have fully launched digital currency, that all G7 economies have now moved into the development stage of CBDC, and that 18 of the G20 countries are now in the advanced stage of development."

53: "Why would The Atlantic Council, a military strategy think tank, focus on CBDC? We are living within a global hybrid war, a component of which will be the collapse of the banking, money, and payments systems globally... War aims will be achieved by means other than kinetic war. The foremost aim of the people who have privately controlled the central banks and money creation is that they will remain in power, forever. They can risk no pockets of resistance."

54: See the BIS's Augustin Carstens on a CBDC [the author is right, these comments have gone viral all over social media over the past few years] "We don't know... who's using a $100 bill today and we don't know who's using a 1,000 peso bill today. The key difference with the CBDC is the central bank will have absolute control on the rules and regulations that will determine the use of that expression of central bank liability, and also we will have the technology to enforce that."

54: "In other words: CBDC means absolute control. And so, if the 'old' money system somehow collapses, new money will be provided by the central banks in the form of Central Bank Digital Currency (CBDC), the new and improved control system."

54: "Imagine... it is chaos. You have lost everything but your smart phone (If you don't have one, don't worry--you will be issued one.) You will download an app. You will click boxes agreeing to everything. You will become increasingly indebted with each payment you make using the CBDC you are 'given' on your phone. You will be told what to do and what not to do from then on. You will comply if you want to eat."

IX: The Great Deflation

55: "...in the 1930s, all commodities, with the sole exception of gold, bottomed at the lows of the prior sixty years. Most public companies ceased to exist. They had gone bankrupt. The shareholders were wiped out. The assets were taken by the secured creditors, the banks selected by the Federal Reserve System. Price levels did not recover for decades."

56: See Tom Nicholas and Anna Scherbina and their paper "Real Estate Prices During the Roaring Twenties and the Great Depression" where they write: "Using unique data on real estate transactions, we construct nominal and CPI adjusted hedonic price indices for Manhattan from 1920 to 1939. The CPI adjusted index falls during the recession that followed WWI, rises to a local peak in 1926 and declines again following the collapse of the Florida real estate bubble. It subsequently recovers to reach its highest value in late 1929 before falling by 74 percent at the end of 1932 and hovering around that value until 1939. A typical property bought in the beginning of 1920 would have retained only 41 percent of its initial value two decades later."

     "And this was Manhattan!"

56: There was "little recovery in the price level from the 1920s to the 1950s" despite tremendous demand drivers: electrification (but note this might be a tech-like driver of deflation too), auto and the highway system, telecom and media, air travel, WWII/Korea/the arms race, population growth. The author cites deflationary factors today: AI, robotics, etc. 

56ff: The Everything Bubble: the author gives an example of a 5% perpetual bond under rate scenarios going to 1% and then back to 5%, then says "The entire global financial complex is, essentially, a big perpetuity, i.e. a financial instrument with no fixed maturity date. The prices of all fixed income instruments are determined by interest rates, and all equity market and commercial real estate values are similarly driven."

57: "The Fed created the 'Everything Bubble' with the justification of fighting the Global Financial Crisis, which of course the Fed had also created, by lowering the Fed Funds Rate from 5% to near zero, and then keeping it near zero for most of the past 15 years." 

57ff: "When the 'Everything Bubble' is imploded, we will face a deflationary depression, which will span many years, even decades. This coming Great Deflation is intrinsic to the Great Taking.

    "The Architects of the Great Taking have planned and prepared to use this dynamic fully, secure in their knowledge that, as night follows day, massive and prolonged deflation will certainly follow the epic debt expansion super cycle, which they created.

    "The Architects have assured that they alone are positioned to take everything, and that you and your children are positioned on the other side of that, i.e., to lose everything, to be enslaved and even destroyed by it. People will be knocked down, and not be able to get up again. That is intentional, as the populace has been systematically encouraged to go deeply into debt. Whom the gods would destroy, they first cause to borrow at low rates of interest!"

58: "As in the Great Depression, prolonged deflation will assure that people who are in debt will not be able to make payments on their debts, let alone repay them. They will be trapped. All property and businesses financed with debt will be taken. With profound and persistent deflation assured to stretch over many years, debt becomes a powerful weapon of conquest."

58ff: On the roots/meaning/etymology of debt, on debt jubilees, etc.

59: "This 'Great Reset' is anti-human. It is intended to fix in place a system something like feudalism in perpetuity, in which the populace is held in a state of deprivation and fear with the empty promise of safety. Wake up! We have been living within a protection racket, in which the 'protectors' terrorize the 'protected.' Those supposedly protecting us from the 'bad guys' ARE THE BAD GUYS!"

X: Conclusion

60: [Interesting views and rhetoric in this chapter on the nature of evil, on the standard human inclination to want to stay blind to evil, and on the possible motivations of the architects of this taking/custodial system.] "Do you believe that you are special in some way, that you were being protected, or that you will be protected now? There has been abundant evidence of great evil at work in the world, throughout time and in our present time. Do you really wish to be ignorant of its existence and operation?"

61: "If you are wealthy, you might assume that, because the system has allowed them to accumulate wealth, they will be protected in some way, that they are special. You are special. They're saving you for dessert."

61: "To not know is bad. To not want to know is worse. Willful ignorance of the existence and operation of evil is a luxury even the wealthy can no longer afford."

61: "Hybrid war is unlimited. It has no bounds. It is global, and it is inside your head. It is never-ending."

61-2: Discussion of Chris Hedges' book Empire of Illusion; on pseudo-events that are mechanisms of control, etc. [See also Daniel Boorstin's book The Image: A Guide to Pseudo-Events in America.]

62: "The people behind the wars have never been investigated and removed from power. They have continued in control of all central banks, and money creation, and have extended their control globally."

62: "Wars have always been not so much about taking things as about subjugation of populations on all sides. Vast destruction and death are acceptable to their planners. You might ask, how could the people plotting and executing such insane schemes be held together? I suggest that it has something to do with the binding power of shared guilt, of the criminal pact. The perpetrators are each and all are bound, whether explicitly or unconsciously, by evidence of shameful, treasonous acts committed against their own people."

63: "In the past few years, you have been living within an escalating hybrid war. Globally, we have witnessed overt media control and propaganda campaigns; censorship, including arrests of people speaking in public; monitoring of all electronic communications and physical contact tracing; brutally enforced lock down and masking requirements, with people being beaten, handcuffed and arrested, even in their homes; suspension of healthcare services and weakening of healthcare systems; invasive testing requirements for employment and travel; forced quarantine of travelers; and coerced quarantine and 'vaccination' of the healthy general population. Governments dropped all pretense of democracy and were emboldened to practice open despotism. There were no functioning checks on this power. The courts provided no effective recourse to the public.... Are you able to contemplate that this may have been about more than a virus?"

63: [Again, very interesting thoughts here.] "I will make a startling assertion. This is not because the power to control is increasing. It is because this power is indeed collapsing. The 'control system' has entered collapse. Their power has been based on deception. Their two great powers of deception, money and media, have been extremely energy-efficient means of control. But these powers are now in rampant collapse. This is why they have moved urgently to institute physical control measures. However, physical control is difficult, dangerous and energy-intensive. And so, they are risking all. They are risking being seen. Is this not a sign of desperation?"

64: "They promote the belief that they are all-powerful. They are not. All they have had is the power to print money. The rest, they have usurped from humanity."

64: "We were told by Hobbes that war is the natural state of man (Hobbes' patrons were 'nobles') [I never ever thought about this!]. But is war natural and inevitable? How did humanity survive? Think about it. Did humans survive by killing each other? It is oxymoronic! War is aberrant. 100% of human survival is based on cooperation. You cannot survive alone."

64: "For 99.99% of human history, sociopaths like these would not have survived the next winter. Their nature was seen and they were ostracized from the village, to save the village." [Phenomenal point here: centralized, large-scale nation states tend to select for (and also hide the nature of) sociopathic personality types, but in a small scale tribal-type society they would be quickly identified and dealt with.] "They operate today through anonymity enabled by inhuman scale of social organization."

65: "The 'masterminds' will not yet be known. However, the individuals and organizations near the levers of power (monetary, media, government, 'healthcare', military, police, legal, corporate), operating with criminal intent toward the mass of humanity, can be identified. The allegiances of these functionaries are unstable, driven by narrow self-interest. By directly and personally putting these people on notice that their actions are being documented, and subject to criminal prosecution, they may be impelled to decline further involvement. This process can be accelerated. It is not necessary to wake up the majority! We are not fighting the 1%, but the 0.01%."

Appendix: NY Fed's reply to the EC Legal Certainty Group Questionnaire

[This appendix contains the full text of the New York Federal Reserve's reply to the European Commission Legal Certainty Group Questionnaire.] 

Some quotes here that grabbed me: 

69: "This response [from the NY Fed]... does not discuss other laws or regulations or rules, which may significantly affect aspects of the indirectly-held securities system, such as securities, tax, accounting, banking laws, regulations or rules, or any other laws, regulations or rules." [Meaning possibly that there are constraints/limits to the legal interpretations here that the author is so worried about because there are many other jurisdictions. Also the response specifically excludes Treasury Direct, which is also striking and indicates perhaps one potentially "safer" place to store capital.]

70: "It is important to convey at the outset that Article 8 plays a limited role in the securities markets." "As noted above, many important issues regarding the securities markets in the United States are governed by State and Federal securities laws and regulations..." [again, maybe there are major limits to the author's imagined worst case legal construct]

74: On segregation of assets here, thus preventing "the entitlement holder to assert rights against any person other than its intermediary, except in the very limited circumstances described below." [The author bolds this part]

76-7: "The first set of obligations relate to the entitlement holder's receipt of the economic and corporate rights that make up the financial asset." "The second set of obligations relate to protecting the entitlement holder from the financial risk of the securities intermediary."

77: "The final three obligations relate to complying with entitlement orders or directions from the entitlement holder. An 'entitlement order' directs the securities intermediary to 'transfer or [redeem] a financial asset to which the entitlement holder has a security entitlement.' 8-102(a)(8). The entitlement order only directs the transfer; it is not an order to sell the financial asset. The securities intermediary must comply with an entitlement order, if originated by the entitlement holder and the securities intermediary has (1) reasonable opportunity to assure itself of genuineness and authenticity and (2) reasonable opportunity to comply." [Interesting special case here that probably could easily be weaponized. I think I see the point here: the "entitlement holder"--the so-called protected class who wants to "take" these assets per the author's argument--has the ability to seize assets it otherwise wouldn't be able to seize under certain circumstances, which here is called an "entitlement order"]

81: [More discussion of segregated assets] "Under Article 8, an investor is protected against the insolvency of its securities intermediary insofar as the security entitlements credited to the investor's securities account are not part of the securities intermediary's bankruptcy estate (and likewise, an investor is protected from the insolvency of an upper-tier intermediary)."

81ff: [... but then exceptions to the above] "an investor is always vulnerable to a securities intermediary that does not itself have interests in a financial asset sufficient to cover all of the securities entitlements that it has created in that financial asset." and then "The interests of an entitlement holder in the financial assets trump the interests of any of the securities intermediary's creditors that have a security interest in the same financial asset." [Again, you could see how this language could easily be weaponized.]

82: [Then two exceptions to the above exceptions(!)] 1) if you have "control" of the asset: "If the secured creditor has 'control' over the financial asset it will have priority over entitlement holders who have securities entitlement with respect to that financial asset." and 2) "If the securities intermediary is a clearing corporation, the claims of its creditors have priority over the claims of entitlement holders. (This second exception is to allow for the secured financing that aids in clearing corporations' settlement activities.)"

83: The "indirect holding system" of securities for securities transfers, where "security entitlements are created and extinguished--that accomplishes the settlement of securities transactions, much like a payment of bank money." Example here: "Operationally, Party A, having a securities account at Securities Intermediary X containing a security entitlement to Security I, might instruct its Securities Intermediary X to transfer or deliver Security I to Party B, also having a securities account at Security Intermediary X. Securities Intermediary X will simultaneously create a security entitlement to Security I in Party B's securities account and extinguish the security entitlement to Security I in Party A's securities account."

85ff: On priority of claims asserted against an intermediary: "shortfalls" (if the broker/intermediary doesn't have client assets it should have: this was covered in Chapter V); On physical securities and what happens when they are destroyed or damaged; on (security) voting rights.

92: Foreign securities: subject to foreign laws of that jurisdiction; "an investor holding through a foreign intermediary might not have its rights determined under Article 8 unless the account agreement had the appropriate selection. In the event of the insolvency of the intermediary, the 'lex concursus' will determine the rights of the investors. In the United States, the relevant insolvency law will differ depending on the type of entity (bank, broker/dealer) that acts as intermediary.

Terms:

ICSD: International Central Security Depository (central database of a sort that records security positions and by which creditors can claim those securities as "collateral")

CCPs: Central Clearing Parties: institutions that take on counterparty risk between parties to a transaction and provide clearing and settlement for trades in foreign exchange, securities, options and (most importantly) derivative contracts. If a participant fails, the CCP assumes the obligations of the failed clearing participant. The CCP combines the exposures to all clearing members on its balance sheet.

Entitlement holder: the person or entity having a security entitlement to a financial asset against its securities intermediary (the "investor" or "customer").

See also: 

Free public domain PDF of The Great Taking: https://thegreattaking.com/ 

Atlantic Council: Central Bank Digital Currency Tracker: https://www.atlanticcouncil.org/cbdctracker/

The Great Taking on Twitter https://twitter.com/TakingGrea53073

To Read: 

Allan H. Meltzer: A History of the Federal Reserve

E. Guttmann: Modern Securities Transfers

M. Friedman and A. J. Schwartz: A Monetary History of the United States, 1867-1960

***Chris Hedges: Empire of Illusion: the End of Literacy and the Triumph of Spectacle

Anonymous: Recession of 1937–38. 2013. https://www.federalreservehistory.org/essays/recession-of-1937-38