Revisiting The Great Taking - With David Rogers Webb

Hello everybody, Chris Martinson here. And today, we're going to be talking about finance and economics. As part of finance, you remember anything that you see in this video and all resources available at our websites or affiliated websites are not intended as or construed as financial advice. This is for educational purposes. Remember, if you have a financial decision, please consult a financial professional. We are not attorneys, we're not CPAs, we are not financial managers as well. We do our best to be accurate, and everything we represent is as accurate as we know it to be.

Now, let's turn to our program. You know, "The Great Taking" is about, you know, it's not a finance book, it's not an investment book. This is about something that is, um, ultimately a spiritual dilemma that we face. It's so awful.

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Welcome, everyone, to this Finance University podcast. I'm your host, Chris Martinson, and I am so pleased to bring back David Webb to the program to more deeply explore his truly groundbreaking book called "The Great Taking." I mean, look, it's such an important work that, and and one that clearly comes with no small measure of personal risk, that I consider David Webb to be, well, he's a modern hero to me and to everyone. The details of how the legal machinery has been carefully installed over the decades to separate each of us from direct ownership of our own financial and even real estate assets. Oh, it's been going on for a while. And this de-materialization, as it's been called, it's been sold to us as offering a lower cost, an easier execution of stock trading. Yeah, listen, that's true, but it's also come with some downsides that we need to explore and we need to understand, such as, uh, it's offering a route for bank and Wall Street lobbyists to begin nibbling at the legal code to give them, guess what, greater and greater advantages while putting greater and greater risk of losses, potentially catastrophic losses, on people like you and me, or taxpayers. Now, sadly, these risks are so poorly disclosed that I can say with great confidence that most financial managers and brokers are actually completely unaware of them themselves. So, I mean, what chance would have of accurately communicating these risks to you? Practically none.

Now, this is where David Webb comes in. Today, we're going to discuss what's transpired for him since the publication of his book, what he's learned, and where we stand today. David, welcome back to the program. So good to have you.

Thank you so much. And I, I want to start off by saying I am just absolutely wowed by the work that you've done, and I'm, I'm really so grateful and humbled by, by the work and the intelligence, uh, that has gone into all of your pieces. And it's a miracle to me to have someone like you pick this up and and do so much work with it. It's, uh, it, it, it is a moving thing for me. Thank you.

Oh, I'm, I'm actually very deeply honored by you saying that. Um, and, you know, as, uh, you said in our last interview, your greatest hope was, our first interview, last one, the one we did, that your hope was, you know, people would pick up your work, do something with it. Well, I've literally invested hundreds, maybe a thousand hours just researching "The Great Taking," you know, nine full-length episodes. People can watch those if they want. Um, but the deeper I went, David, the more astonished I became. Uh, and I see many others, you know, finely wrapping their heads around the topic, but it is complicated.

Hello, everyone. I am Chris Martinson of Peak Prosperity, and I want you to be aware that the mechanisms that can seize your assets are already in place. Look, you can ignore this information, or you can take action by joining our essential webinar to avoid becoming Wall Street's next victim. Look, whether you're curious, seeking to protect your wealth, or you are a financial expert, our webinar offers critical strategies from industry leaders. You will learn seven key tactics to safeguard your assets before the next crisis hits. Sign up by May 15th for a 20% discount, or subscribe to Peak Prosperity to save even more. And of course, my key supporters at Peak Prosperity attend for free. Thank you for listening, and now back to our program.

How are things going from your perspective? Are you happy with the impact? Did you expect more, less? How, how are things going?

I, I think it's, it's pretty astounding what what has happened. It's, it's kind of like a miracle what is, what is happening. The, the expansion of the, um, awareness and, um, people like yourself picking this up. It's kind of a brush fire that has started. And, um, so this will continue whether I'm here or not. This, which is my best insurance, actually, personally. That was, that was important, that getting, getting this out in such a way that it was going to carry on regardless of what happened to me. And we're at that point. It's, uh, out in the world. It's been released. Um, so that's happening in a big way. And, you know, maybe I'll, maybe I'll talk about, should we talk about what's happening in the states in the US? Should we go into that now?

Absolutely. But right before, right before we get there, though, I want to ask a couple questions first to set the stage for that. Um, first, you know, I've actually had the opportunity now to help coach people, coach their wealth managers, their private equity. Like, I've actually been coaching people in the legal departments. It's some of the biggest brokerages, right? By, they say, "Oh, no, that's all wrong. Your stocks are actually, you know, we're in a trust department. They're not on our balance sheet." And then you go back with another question, like, "That wasn't my question. The question my client is asking is, you know, this person of yours is asking, is, uh, whose name is on those certificates, right?" And you just keep going. And, and I found that it's four or five communications back, usually with some boilerplate legal, then a higher legal person, and then finally, I've been to the tops of two legal departments, both finally going, "Oh, yeah, this is totally right. Those are held in street name at Cede & Company, right?" Yes, yes. And I've been astonished that it took that much education. This is their business. It's like I'm explaining what penicillin is to a doctor. What's your experience on how do I understand that?

Well, um, the, I, I went to, um, a top, the top securities attorney at a bank in Sweden. This was some years ago, and he explained this. He was totally unaware of this. The, and had to go away for some days and ultimately came back and said, "Yes, this is the truth. The case." So you are confirming this. It's absolutely, really, the case. And, you know, we'll, we'll get into what happened in the states, which is further exposition of this, that it is absolutely real. It's irrefutable that this is the case because they've done their darnest to to refute it, and they can't. So this is, it is, it is phenomenal. It is phenomenal that you can have people, um, throughout the system, all the way to the top of the system, that have actually been ignorant of this.

Yeah, yeah. It's, uh, I, I had, um, I've had several attorneys looking at this. And a guy I know, he's, he's a real estate attorney, and he actually graduated and practiced and now he's retired. But he graduated before 1994, when some of the biggest changes happened. So he said, "Oh, I got this guy, hot shot. He's working for my old firm. Um, he just, you know, graduated five, six years ago from Stanford Law. So I'll ask him about this because he must know about this, right?" And this guy said that he was actually, he's like, "This is weird. We didn't cover Uniform Commercial Code, UCC Article 8, in our education." I found that astonishing. How do you go through law school without covering the most basic thing that impacts property rights and ownership?

Yeah. Or that securities attorneys, even people in, even securities attorneys don't really know about it. Um, it's astonishing. Uh, you know, what you see when you look, when you look at Section 8 of the Uniform Commercial Code, it's just plain as day, uh, what, what is there. It's very simple. And the subterfuge is very simple, um, how people have been misled and, um, um, that is what is happening through the process in the states. It's being exposed, laid bare.

So, so just to set the stage for people, we've got laws which are, um, titles. Those have been written out and they cover everything. And there's, I don't know, how many millions of pages of laws in the United States now. We're probably breaking one right now, who knows? A lot of laws. But then there's this Uniform Commercial Code, which is supposed to unify commercial aspects across all 50 states. It's, they're kind of written by some centralized people, but it's up to each state to ratify them and adopt them, right? So, so they've done that. And then, uh, particularly we're talking about Article 8 of this Uniform Commercial Code, and specifically a subsection of that, which is the 500 series in there, which relates to all these security laws. So, so this is a thing that all 50 states have sort of ratified. But you found there's some hinky language in there. And so you, you brought that to the Tennessee State Legislature recently. And we can play a quick clip of that here. Um, you know, when, when we, uh, uh, at the end of this, but tell us, how are you brought there? And, and tell us, take us through what happened.

Yeah, this is again, a very encouraging thing. Kind of like you picking up the ball on this and something happening here without my involvement. Um, so, um, I was, early in the year, this year, I was contacted by, uh, a group of people in the US that were aware of this and were beginning a process of of, um, working with legislators in the US to change the UCC. So that began without my involvement at all. And then I was, I was contacted and asked to get involved. So that, that was like a miracle to me that that was happening. So there, there's something called, there's a group down in Texas, the Pro-Family Legislative Network, um, and they were working alongside the Harland Institute there, people outside Chicago. And then there couple up in, um, North Dakota. Don and Betty Grandy. And, um, uh, Betty has been a legislator in North Dakota, so she understands how that process works. And Don has, is, you know, very well-rounded attorney who has experience with the UCC. So they had already, they had already been looking at issues around the UCC and they were in touch with hundreds of legislators in different states. So, um, the, the first, uh, process began in South Dakota. And a, um, uh, courageous woman there, Julie Al, brought the bill. And it's interesting, she, um, she is an investment advisor. And so she has clients, and she becoming aware of this because she is a conscientious person. She became concerned about her her responsibility to her clients, as you would hope. And, so she, um, uh, she brought the bill. And then I, I went there. They asked me to go. And I met with the legislators, and there was, uh, a lot of interest in this. And then there was a hearing. And I would say that the hearing was run in such a way as to kill the bill. This is what we encountered in South Dakota. So they allowed Julie Al and and Don Grandy to speak. And then they had a long line of bank lobbyists that basically said, "This is nonsense, and it'll be bad for business in the state, and this should not be allowed." And with no opportunity for rebuttal to the bank lobbyists. Now, the main thing the bank lobbyists did, what was they would read the language in the UCC, in the, as you say, the 500 series, in in Article 8, that says that entitlement holders have priority over the secured creditors of intermediaries. And then they would stop there and say, "What's the problem?" And in fact, that is the line that was used, um, in the accompanying statement when they implemented this in 1994. The, the Uniform Law Commission told all of the states that this is about assuring protection for investors. When it, it was actually doing the opposite because they did not disclose the exception. The bank lobbyists read this first. Yeah. So, so when you, when you look at the code in any of these states, this is, this is the way it begins. But then it says, "Except." Then it goes to a second paragraph that says something similar, that the entitlement holders have priority over the secured creditors of the intermediaries. But then there's another exception at the bottom of that. So you have to have the patience to read through three sections. And when you get to the third section, there are two exceptions. The first is that if the creditor of the intermediary has control, the creditor has priority over the entitlement holders. Now, control is a concept in bankruptcy, which means that the creditor has the power to sell the asset. So when securities were paper, it was very clear who had control. If you had the certificate, you had control. If you had signed it over to an intermediary, they had control. With, with de-materialization, it created, it fuzzed that up as to where was the control over the asset. And, um, so the, the securities industry, we, we know there, there is commentary by James S. Rogers, who was the drafter of, he's the guy who wrote the, the, uh, the, the amendments in this area to, to that were implemented in 1994. And he, he says in his own statements that this was just catching up with practice that was in place. So the industry had been using the pooled customer assets, kind of like the goldsmiths in the Middle Ages that were using the gold that had been entrusted to them. So once it's held in a pooled form, that's possible to do. So they were doing what was basically illegal at the time, and they then had to make it legal, which is what they did through the amendment in 1994. So, so control, what, by through the indirect holding, the, the securities system has control all the time. It's easily achieved for the legal control of the collateral to rest somewhere other than with the beneficial owner. It's, it's guaranteed. The beneficial owner does not, is not the legal owner, does not legally have control. So that exception is a huge, that is a huge exception that that assures that creditors of the intermediary have priority. The second exception is that if the creditor is, um, a creditor of a clearing entity, those creditors always have priority. And, um, these things were also made clear in that Federal Reserve response to the, um, legal certainty group in in Europe, explaining this as well. So, um, it's clear from, from that Fed response, it's clear from looking at the code itself, it's plain as day. So the only way they prevented this from going forward was from, um, subverting the hearing itself. Then there was such support from legislators that they, they forced the bill back onto the floor. They came up with a sufficient number of votes on the floor to force the bill back onto the floor. But then they, [Music] also, they, they then bracketed that on the floor, basically through, they, they prevented, they prevented the sponsors of the bill from speaking to the, from providing a rebuttal to what had been said in the committee. And they allowed people to speak on the floor that said, "This has been thoroughly examined in the committee. Stop wasting the people's time." And then they just voted it down on the floor. So they, they killed it through procedure. And they clearly had people in the legislator that were working for the banking lobby to do that. So what we, what we saw was they, they could not, they could not address the issues directly. They had to do it through this kind of legislative subversion. So that was in February. Then in March, the process began in Tennessee.

And one second for David. I want to up South Dakota. I think that that was SD 1199, was that the bill? I have the numbers in my head, yeah. So I read it. And they didn't write new laws. They just took a fat old Sharpie and just crossed some things out, including those exceptions. They also importantly, they reverted jurisdiction for adjudication back to local jurisdiction. And so that, I think that's an important part of this story too, because they want, they want the jurisdiction in in the Southern District of New York, right, where they have friendly, friendly legal systems, I think.

Well, and both things, both those things, the, the change is so simple to give back priority to investors to their own assets. The change is so shockingly simple. It's basically just doing what people were originally told the law would do, which was assure priority to the entitlement holders. So all they have to do is strike these exceptions, and you've done that, which, which that, that was the subterfuge. But then the second thing, changing the place of law to to the state where now that Uniform Commercial Code where will prevail. Um, the, um, Don Grandy has spoken to this, that that appears there is some precedent that the state, state law Uniform Commercial Code would prevail over contract law, whatever is, whatever the place of law is set in the contract, that would not prevail against the, the, um, the state law. And you can imagine, they would have wanted to have precedents set that the Uniform Commercial Code prevails. Um, so, uh, in, in any case, gives the state, it gives people a leg to stand on to argue that we, we have a basis for bringing, uh, an action in the state.

Now, I've seen this in the European context when, um, so, uh, when they began this process with the Legal Certainty Group, which had a, this was in the early 2000s, um, um, they were, they had the mandate. What they meant by legal certainty was, how do we make it legally certain that the secured creditors have control of the collateral? Um, so they began a study looking at the law in every country in Europe in the EU to identify the countries with problematic law. And Sweden and Finland were two of the countries that had problematic law. And that was, in fact, why it came to Sweden, was to try to keep it so that Sweden continued to have problematic law here for them. And, um, the, so what they did, it took them, um, uh, until 2014. So the Legal Certainty Group was beginning in 2004. So, and this response from the Fed was in 2006. And then it took them a number of years more, uh, to really come up with a way to subvert this. So that was the Central Securities Depository Regulation, CSDR, in 2014. And at the same time, what you find in Swedish law is how they subverted the Swedish law. So the Swedish law says that control of the collateral cannot be passed without an express written agreement, which is what I think had always been in the law, which is quite a reasonable thing. But then they put an exception in. This is how it's done. So people can read the first part and think, "Well, this is good," but they have to read on. And the exception was again nested down several paragraphs. You have to work through several paragraphs to get to what the exception is. And in the case of Sweden, it said the exception is that if the collateral is being passed to some entity that is under a comforting regulatory authority, language that translates something like that, very vague. Um, and, and, um, again, it's, it's so broad. And if, if that's the case, the collateral can be passed out of the country, out of Sweden, without any written agreement or knowledge of the client. And that's basically what was done with these changes to the UCC. So it's, it's done with this kind of very broad exception. So the way to unwind this is at the local level, to simply revert these things, reestablish the local law will dictate, and to strike the exceptions. This, we're going to find this in every country in Europe, every state in the United States.

So, I, I want to know, what do these lobbyists say? We're going to pull the $8,300 worth of of support? It's some chump change to them. Or, or do they say, "This moon will turn to sackcloth, and frogs will fall out of the sky"? I mean, they must say something really potent. That's what we will get to when I tell you what happened in Tennessee.

Okay, well, let's do that. So, so, so South Dakota didn't quite work out, but they made an attempt. That's awesome. That's February. Now, take us to Tennessee.

Okay, so in Tennessee, um, the, so this was in March. And, um, there was, there was a, the hearing that you have the recording of that, that was very important. And that was the first hearing. And the bill was, was brought by Bud Holly, who is just a fantastic guy. He's someone, he's like someone out of an epic Western, but also a courageous guy. And like the marshal in a Western town. And, uh, he, um, so he brought the bill. And, um, the banking lobby sent Andrew Guggenheim and a guy named Tim Amos. And, um, uh, they, uh, their, uh, points, they're two, they're basically two points. That there has been no change in property law, in property rights, which is demonstrably false. Um, and secondly, that this language in the code is about being able to provide margin loans to clients. And that if you make this change, people won't be able to have margin accounts, and it will create a conflict in law, so that all the existing agreements will be invalid, and it will be such an awful mess. Let's not do this. So they began, they began with that. Uh, though, so their arguments. Now, this, this process is very, very important because, um, I think most people when they first heard about this, the reaction was, "Well, maybe this isn't real. Maybe, maybe, maybe the, it's so crazy, this couldn't be the case." Well, to have an actual bill brought and have the banking lobby attempt to refute it, and only be able to lie about it, um, that tells you a lot. They, they brought their best, and they, they could not refute it on the substance. They had to say, "Look, there's a bird over here, squirrel, misdirection, misdirection."

Now, this is the very exciting thing. The, so it was passed six to one, um, in, in this House subcommittee. And then there was such enthusiasm for this, they accelerated the Senate hearing to the next day. So that Don and I, it made it easy for Don and I to be there. You know, if they didn't want to be accommodating, they could have, they wouldn't have done that. So they moved it up. And, uh, there, in that Senate hearing, I was expecting to have to slog it out, have to have to speak in that. But with, without calling anyone to speak, they passed it unanimously in the Senate the next day. Wow. And so the, um, Senate Majority Leader, Republican, voted for it in that unanimous vote. And the prior day, the, uh, Democrat chairman of the Black Caucus voted for it and was one of the key people questioning the banking lobby there. So, as Betty Grandy said, this is, this now has national implications because it's clearly a non-partisan issue, like almost nothing else. Um, it is a people issue. So the lines are being drawn when that happens. So, um, we realized this is so significant, we have to stay and see this through. So we stayed into the next week. And the next week was the final step. The Senate, the Senate just had this one committee. The House had the subcommittee hearing, but then there was going to be a final committee, full committee hearing the following week. So we stayed for that. And starting on Monday morning, we went around and met with all of the members of that committee, you know, systematically. And the first day, it was again, very positive. They were very receptive. Um, then something changed on Tuesday morning. And it was clear that the banking lobby had come back in in full force. And, um, we were, we were, we learned that the treasurer of the state and the banking lobby were going to come see Bud Holly. And we went to Bud Holly's office. And Bud had not been informed of that. So they were going to blindside him. And, um, we, we were there for that meeting. And, and it was, uh, I think, in a way, a marvelous thing because here we were with the treasurer for the state, his chief of staff, the banking lobbyists were sitting on a love seat next to me in Bud's office. There were a couple of other people in the state, you know, the, a former investment banker who was on our side. There. And, and, they gave me full opportunity to address this and talk about it. But the, the treasurer, what his position was, um, that this is such a significant change, we can't do it right now. We have to study it. And, they wanted to refer the bill to what they call summer study, which some people say is where bills go to die. Is summer study? So they, they presented it from, they prevented it from proceeding. Um, and as I, and then there was more exposition because in the hearing the next day, so there was the full committee hearing. And we met with the chairman of the, um, of that committee in the morning before the hearing. And he looked emotional about it. I think that, as I was told, what happened was the treasurer went to the Speaker of the House, who went intervened with the chairman of the committee and said, "This is going to be stopped." And so by the treasurer, I'm, I'm just not, I'm not used to that axis of control in a situation like this. The treasurer explained, I'll, I'll explain because there was more exposition in this second hearing. They, they brought in another bank lobbyist, who was, uh, uh, a, a securities law professor. Who again supported this argument that this is just about margin loans. And if you, so they, in the code itself, it's clear that this is about creditors of the intermediary, not of the client. So it has, it's clear it has nothing to do with margin loans. But at the end of his, uh, questioning, and they gave these guys plenty of opportunity to to speak, which I think was good to get all the exposition out there. But at the end of his statements, under questioning, he said, "Look, if you do this, um, with financial services will be withdrawn from the state. And not only will firms refuse to do business with the state, they will refuse to do business with any other firms doing business with the state." And then he literally went on to say that this would be bad for DTCC. Oh, no. So, so he did not, he did, that's a terrible out. This will be coming out. But so, so what, what they did was they bared their fangs. This was just so, it was frogs falling from the sky. And it was, "If you do this, we will make, we will hurt you badly." So it, it, it was an absolute threat against the state, no doubt. But now that's out there. People, of course, people have to realize they're being threatened and decide what they're gonna do about that.

Yeah, they, they couldn't, they couldn't stop it based on, um, saying this isn't real. Ultimately, they stopped it just by threatening the state. Now, um, uh, I, I got a lot of this context from a lawyer who's done a lot of work in this area. His name is, uh, Jimmy Lovelace. And he is a lovely guy. And, and so thank you, Jimmy, for this. But he said, when it originally started, like this is a 1978 law, which protected a specific type of of commodity contract. And I, it must have been some, I don't know what the actual incident was, but it must have been some orange juice contract didn't get paid, and therefore somebody got hurt and went to his favorite lobbyist, who got to the favorite congressman, and so they protected that. And it's been growing ever since, like more and more and more of these qualified financial contracts, which is now a laundry list. It's so far, it's everything, right? It's derivatives, it's this, it's that. They all have seniority. And the thing, so, Jimmy said, "Listen, two things." First, they know that if they have a counterparty freeze-up in this giant over-leveraged system, that the whole thing could actually go bad. Right? So that. And then, then we had, um, the Great Financial Crisis. And so the whole thing was, they saw the light at the end of the tunnel, but it wasn't good. You know, this is like a near-death experience for the system. So they wrote some laws even further to make sure that the system didn't just seize up. So they're just, their explanation is, "If we don't do this, if we didn't have these laws, it would be possible for the whole system to freeze up because one instant counterparty couldn't make good on something, and they didn't have access to the collateral, and then the whole chain falls down, and it's very bad." So that's what they said. Jimmy helped me understand that they've gone beyond even protecting specific entities in that story, but it's the system itself. There are system functions around how collateral moves, and how funding moves, and how it, there's, there's piping that they're now defending, uh, as well. And so the whole thing's grown rather out of control. And, and from out here in the cheap seats, it just looks to me, David, like we have a system that is so complicated that nobody actually knows how it works anymore. And I have spent three months trying to get one person to act, tell me this this question, which is, in all of these proprietary trading desks, they have these collateral pools, and they have the OTC derivatives, and they have the collateral, and all the collateral is moving around. I said, "Tell me how the collateral gets encumbered, where does it come from, and how did it get there?" And nobody can answer that question for me clearly. Um, you know, because I'm trying to answer a more simple question, which is, "Who owns that bond? You know, who owns that stock?" And I, I haven't been able to get an answer to that. And I've gone to people who should know. And it's, it's mysterious to me.

Yeah. Can you shed any light?

I think there, there are a couple of Bank for International Settlements documents that are illuminating. And they won't tell you specifically how, you know, how a specific piece of collateral is encumbered, but that it is happening is, is manifest, quite, quite clear. So the one, the one is the, the document I reference in the book that shows this flowchart of the collateral moving from, uh, custodians, even equity desks, through the collateral management system, and ultimately on to, down in the fine print at the bottom, the central clearing counterparties. So. And I read that. I read that, but I wanted to know where, how, how, where did that collateral come from? Like, what's that process? I, that I couldn't figure out. We, we know that that document is 10 years old now, so this is, this is, um, has been underway for quite some time. And I, I agree with you. You know, we don't have the specific, um, documents that are used to paper that, uh, in terms of their legal control of the collateral. But it is, it is happening. And then there's a, a fresher document that was in, um, early December of, uh, 2023, so quite recent, talking about the, it was a Bank for International Settlements doc, talking about the risk of margin spirals, which is that, uh, as prices fall, more and more collateral is, uh, required. And, this is exactly what was being discussed in that 2014 document. So they're confirming again that that is, that can really happen. And in this, in this December '23 document, they talk about the structure of this. That there is initial margin, IM, which has always been very high-quality collateral, cash and government bonds. And so it's kind of like, you know, when you enter into a derivative trade, it's kind of like having a margin account, which most people understand, where you have to have something in the account in order to take on another position on top of it. So, so this, initial margin, they're putting up the cash and, and government bonds is not necessarily their own cash and government bonds. It comes, it comes out of these pooled assets. But then we get into, on top of that, there's something with the acronym CF, which is the collateral fund. And in this document, it's discussed that regularly, the collateral fund is not really used to great extent. But what the purpose of the collateral fund is to mutualize losses. And they specifically use that term in the document. So this is basically the, what, what will, what will receive the, the collateral in an unfolding crisis where there's a demand for more and more collateral, that is passing from, who being hoovered up, cross-border, across, you know, and on an automated basis. The 2014 document discusses how this is automated, and it will particularly be operational in a crisis. So without human intervention, the collateral will be passed, the legal control into the collateral fund. And so this is where the vast, the vast pools are plumbed into that. Now, I agree with you, we don't, we don't have the specific legal documents underpinning that. But we have, we have the roadmap and the description of it from the Bank for International Settlements itself.

Now, now, so I'm hoping you can shed some light on this, because again, nobody's been able to help me so far, which is okay. So, so you have all stock. Let's just talk stocks. Let's forget, you know, fixed assets at this point, bonds. So you got stocks. And in the way it works, if they're in street name, the legal ownership under some jumbo position is held by Cede & Company, and then DTCC keeps the registration of that, right? So that we know who's got what. So let's, let's start here. Let's imagine there's a million shares of Tesla or something out there, right? Um, you know, stock X. And in theory, let's say half of them went into margin accounts, and half went into, you know, non-margin accounts. So 500,000 shares over here in cash accounts. Regulation 15C3-3 says those can't be encumbered. They have to be held, and the control has to be maintained for the client. That's what they say. But still, it's over here at Cede & Company. And the other 500,000, same thing, but they're margin accounts. So those can be lent out. Okay, here's the thing I have not been able to resolve, and I poked at this hard, and I'm a very good researcher. I could not find any any publicly available accounting that the DTCC has gone in and added up all the shares that they think they have and compared them against the number of shares issued by a company and said, "We're cool. We can account for all of them. Here they are." That basic accounting is missing. And I don't like non-transparency in these things, David. So, so how is it possible that we have a system that's ostensibly managed and set up for our benefit, and I can't even answer the most basic of questions, which is, are those shares actually there? Are they in proportion to what we think should be there? And who actually has control of them right now? I couldn't get any of those answers. But maybe I'm bad at researching.

No, I think, I think that is, I think you're asking the right questions. I mean, clearly, it's not being done for the public benefit, the way this is being done. So, I, I can't, I, I can't point to, uh, further illumination of that. I think you've described the situation.

So, so there it is. Yes. I have trust issues. You know, but, but that's what they're basically saying. They're saying, "Trust us." And then you, you look into all these case precedents, and you find out maybe no trust should ever be part of the story, right? Because they are absolutely untrustworthy, and they have violated that trust over and over and over again. And that's just, that's just the reality of the situation right now.

Yeah. Well, let me, let me jump into something related to this. I think people, people think that this is about your broker using your securities. That's not the issue. You know, the, the, the, um, use of the securities is at the higher level than the broker. So part of the part of the reason that people were led to feel comfortable with this is, is they're told that their securities are segregated. They're assured of that. That there are regulations around that. But that is just segregation from the assets of your broker. The, the use of the securities is from these vast pools at the higher level. And we know that, um, the, the, um, massive growth in the derivatives complex began in the 1990s when they made this legal change. So the derivatives complex grew from almost nothing in the early '90s to by 2001, twice the size of global GDP. And by 2007, 10 times global GDP. Now it's maybe 20 times global GDP. So what, what did that? It's the use of these gas pools of, um, public, uh, uh, uh, publicly owned securities. Um, so it's, and it's everything. This is so, it's not just individuals that are at risk. It's the most sophisticated institutional investors. It's everything. It's all pension funds, it's all hedge funds, all the big boys are are at risk in this as well. There's no way out of it. It is, it is comprehensive.

So how will, how will the securities, how will, how will this end? And this is why, you know, "The Great Taking" is about much more than just this, because we're, we're talking about subjugation, you know, really a, a hybrid war strategy here. But the, the, in the narrow sense, the great taking of these securities comes at the level of the central clearing counterparties in some cataclysmic failure of the financial system, which we have been promised. Because as you're saying, they, they say, "Well, we have to do this to protect everyone." Well, clearly that isn't the case, because they built this monolithic vulnerability, and they're telling us, the participants in the system, are telling us how precarious this is, and that they're preparing for failure of the entire system. So, um, it's not about safety. Uh, and what prior to these changes, when securities were property, none of this would have been an issue for the public at all. Because if there was insolvency, you would just say, "Here's where you deliver my property." And if you don't deliver my property, you're guilty of theft, and you will be prosecuted for taking it. So it was as simple as that. The simplest protection for the public was that the public had property rights. So what they've done is to take what was a clear, absolutely bulletproof protection, centuries old, for the public, turn that into a contractual claim that has no standing now. This is where it's going. They give the entities behind the derivatives contracts, and notice the word contracts, their contracts. They never would have had any standing in the insolvency. And through this subversion, they've given only the biggest secured creditors super priority to the pooled assets. So this isn't, this isn't about your broker, you know, using your assets. This is a, a global strategy. This is monolithic. And, what will happen now? Think about this. It, what we know from that JP Morgan decision relating to Lehman Brothers, the only thing they had to decide was, was whether JP Morgan was in the protected class. And the judge found that because JP Morgan was one of the biggest banks in the world, JP Morgan was certainly in the protected class. Now, what that means is other types of secured creditors are not protected, do not have this. So it's not, if we somehow manage to get into a position as a secured creditor in the derivatives complex, we're not going to be protected in the same way. They're, we're, we're assured with this daisy chain of, uh, the reuse of the collateral. Um, we, we know that the derivatives complex is so large that even all the securities in the world are small relative to the size of the derivatives complex. So they have guaranteed that there will be a game of musical chairs just among the creditors. That's why their super priority is key. Now, imagine you go into this meltdown, and there is escalating, uh, there are escalating calls for collateral on an automated basis, and probably other terrible things are happening at the same time, creating global panic while this is happening. And it gets to the point where the system is basically saying, "Just give it, give us all of it." Just transfer literally all collateral is called into these entities. Now, the derivatives complex, the central clearing counterparties are failing. And as they've said, they will fail with the failure of just one or two major members. But, but their scenarios, their stress testing is assuming that there's no contagion effect at the time that that happens, which, which is completely not the case. If you're in a systemic failure, there is contagion effect. It's not the discrete failure of one entity as if nothing else is going on at the time. So, so, um, the, so, so now imagine all institutions, they believe they have hedged their downside risk where in the derivatives complex, but they are not in the protected class. So as the failure is occurring, their derivatives contracts, they will find out those are just contracts which have no standing in the, in the failure. What, what this is setting up for is that only the, the biggest players will have this super priority to these vast pools of collateral in the collapse. So now they may have, they may have some contracts that they allow to, uh, they have bets both ways in the market. And some of their derivatives will be worthless, but they will, they will be in a position to actually take the underlying collateral based on the contracts they have in place at the time that the collapse occurs. So, uh, I think that is the transmission mechanism. And it, we can just see it through the statements of the BIS itself, which is the central bank for the central banks, in their own mission statement. And they establish all the policies for the harmonization of the central banking system. So I'd say they're pretty good authority to describe how this, how this will work.

So what I'm saying is, it's not about your broker. Now, this is the other insight we came to in South Dakota. You know, Julie Al was, you know, she, as a conscientious person, was concerned about, "What does this mean for me and my clients?" And I, I woke up after we talked about this. I woke up the next morning with this image in my mind. And I, I think this is a good analogy for people. Um, people in the financial services industry think their interests are somehow aligned with the central banks. That would be a bad bet. It's quite different. So here's the analogy to understand that. When they built these medieval fortress towns with the castle on the hill, they built a pretty generously sized area within the walls of the city where people were invited to settle. And people inside the walls would have thought, "Well, I'm protected here, and isn't it great that the Lord here is protecting me?" What they did not understand is the purpose was quite different than their protection. They provided the buffer for the Lord in the castle keep. So any marauders, any attacking army, would have to go through the town before getting to the keep. That is what we have here. The BIS and the Federal Reserve are up on the hill in the castle keep. The entire financial services industry is the, the, the simple town folk that are that are providing the buffer. And, and when this happens, the displeasure of the public will be visited upon them. They are the ones who will have lost their assets and will, um, uh, have the liability. So that, again, is a hope we have here in exposing this is people in the financial services industry have to realize they have been set up as pawns in this thing. They are not going to be protected. And they can then start to shift to realize, "I have to provide real asset protection for my clients." And how do you do that? You do this by finding a jurisdiction where you can make this simple change to to literally give people back priority to their own investments. It's as simple as that.

Yeah. Wow. Great analogy. I love that. You know, so what, what we're describing here is that, um, ever since Magna Carta, all the way through, we have hundreds and hundreds of years of of refinement of contract law.

Through mostly through very high tuition costs of finding out what didn't work, refinement. We have bankruptcy code refinement. All of that's been upended in this, right? So it used to be that private property came with a word attached to the back end of that, which was rights. Well, rights are things that can't be qualified, nibbled away at. It's either a right or it's a privilege, right? So now we have private property privileges, right? It's if that's even a not an oxymoronic term in of its own.

And what I was really shocked by. So, so I, you know, David, I read your book, believed it. I found people who worked with you in the past. But I'm this kind of guy. I went through every reference, right? So I'm starting to read through and I went, I read all the legal code, burned my brain up because I'm not a lawyer and I hate how they triple double negative stuff. You know, except notwithstanding, except but. You know, where are we, right? It's it's it's tough. Had to draw little diagrams when I found that, you know, in bankruptcy, there's a very clear thing. I enter bankruptcy and some trustee rides in, there's an automatic stay, and the stay means a stoppage. And that's it. Nobody can come and claim stuff from me. No money leaves my bank accounts. It's just a freezing.

To find out that a brokerage or clearing party or one of these entities in this chain goes into bankruptcy, and that the trustee or receiver is forbidden from stopping other parties from reaching in and taking what they believe is theirs. They can't even stop it. Yes, they can just take what they think is theirs, right? Unbelievable that they would just do that and say, you know what, we're smarter than 500 years of tried and true battle-tested bankruptcy proceedings. We got this, right?

Well, this is to this is what points to the scenario that I described where in the meltdown, there's this escalating call for collateral that then goes to just a, um, protected class of secured creditors. Um, they had to, um, implement safe harbor in 2005 to assure that that would happen, it would work that way, because prior to that, it would have been outright fraud, constructive fraud. So they took what would have been fraud and they made it not fraud. And so what, what is it? It's it's it's a, it's it's very clear that this was done specifically to allow what I'm describing in a collapse of the central clearing counterparty. So, um, they, they are, we know that safe harbors particularly are provided to creditors under derivative contracts, all manner of derivative contracts, and, uh, that contracts wouldn't have had a protected position in an insolvency. That's why they have to take, be able to take the collateral. They can't line up as a creditor in the bankruptcy. They have to get, they have to pull the collateral out. And it can be, it, it, it is without judicial review. Um, and they also, the other thing, um, prior to this, a constructive fraud and transfer was, um, anything that was, um, advanced to a creditor on the eve of the bankruptcy. So that would have been clawed back. Any, any and anything that was taken out without, uh, equivalent value having been provided. So we know that this collateral is taken, fop, literally free of payment. They provide no consideration at all when they take the collateral. They do it during the bank, while the bankruptcy is happening, while the. So, so a constructive fraudulent transfer could have been avoided by the bankruptcy trustee if it happened when the entity was insolvent. So that's exactly what, what we're seeing. We're seeing an entity that is failing, it's insolvent, and, uh, uh, so it's, it's designed specifically for this mechanism to take something that is so clearly fraudulent and to make it legal. It's legalized theft.

So I can see how something like this develops over time. Here we are. My concern is a, the lack of transparency because I can't answer the most basic of questions, which is, where's the collateral? Where'd it come from? And how encumbered is it? So I don't know, right? So I don't like that. Um, I can't answer definitively who is the actual owner of any particular thing, who's a senior claimant. We don't know. Um, but here we are. Okay. And now we have, you know, too big to fail got too bigger to fail, right? We have more bank consolidation, not less. We have more derivatives, not less. Like you said, the greatest mistake of derivatives is convincing everybody that risk has somehow been shot off into outer space. I'm covered, I got a contract, I'm good, I got a derivative, no problem, right? But that, of course, actually just makes the risk more spread out, but it doesn't take it away. So if it comes roaring back, we have this financial crisis moment, which I think we all know has to happen at some point, right?

When that happens, this is where I get a little apocalyptic because it just looks to me like it's going to be like smashing a Ferrari with a 500-pound wrecking ball and then saying, how do we put this back together again? And I think the answer is, you don't, not in any meaningful amount of time. It just sounds like the whole thing just kind of goes lights out at that point. And, and then there's decades at best of trying to fix it to whatever extent you can. And it's legal work and lawsuits and broken dreams. And I, it just feels like the whole system could just sort of seize up at that point. How, how are you seeing it at this point?

Well, yes, it is, um, it, it isn't leading to, there's no contemplation of fixing things after this. I'd say that's pretty clear. This is, this is literally leading to destruction, uh, of societies. It is part of a hybrid war strategy. I mean, it will, it will lead to broad impoverishment and subjugation, deprivation. And that's why, you know, the great taking is about, you know, I, it's not a finance book, it's not an investment book. This is about, um, uh, something that is, um, um, ultimately a spiritual dilemma that we face. It's so awful. How do we, how do we face up to this?

Say more about that. I'm, I'm intrigued with this angle.

Well, you know, I've talked with my wife about this quite a bit. I think that, you know, we, we have to, we have to, uh, I think most people, it's so overwhelming, they just want to look at something else. And, uh, and there is, there is a place for, um, um, you know, not being spiritually destroyed by this and finding goodness, truth, and beauty and focusing on that. Absolutely. Um, but, um, ultimately, we have to be grateful that we know about this, rather than being ignorant of it. So we have to accept this, we have to accept knowing about it and be grateful that we know and face up to it. And somehow, this is the spiritual or transcendent part of it, is to somehow transcend how awful this is and pass through it to some, some ability to go forward and face up to this. And it has a lot to do with things that we've kind of lost, like, uh, truth.

I totally resonate with this. It's, um, it, it comes down to things that I think, I'll put this on myself. I got lazy, David. I, I wasn't paying attention to this. A lot of other things I was, you know, living my life because life was relatively easy and I didn't really think this through. And, and now I understand some things and I've gotten back to words matter, laws matter, agreements matter, integrity matters. Um, and, and that fundamentally, this is about, um, the system, I think, is asking me on a daily basis to nibble away at my own integrity, to abdicate important things, the raising of my children, decisions about my own future, my own health, what goes into my body. Like these are all fall under that one umbrella, which I think we can hang the great taking under too, which is, which is just this abdication with the idea that there's a contract, an explicit social contract, which is, I'll behave, you behave well. They're not behaving right. And now we've learned that. And so the question becomes, well, what do you do once you find out that they're not behaving? And again, this, you can read the Bible and read thousands of years of how people failed to behave. And it, it's like pretty old human behavior. So here we are. This is our own turn at at the at the wheel. And we find out they're really misbehaving. And I honestly think that what you're doing in Tennessee is just so important that individual people need to take what steps they can for themselves because fundamentally, it begins with this, I do not consent. Right? And then we find out how big of a battle it's going to be. And it could be a big one because I, we, we, a lot of us haven't been paying attention for a long time, but we're waking up, thanks to you. And here we are. So I think we have to find each other and decide how brave we're going to be. It's going to take courage. It's, um, this is big because it, it is global. And, you know, I'll be explicit about it. We, we have to understand that this isn't just commonplace human greed that we're dealing with. This isn't run-of-the-mill human weakness. We are, we are dealing with a very systematic plan to subjugate humanity globally. And the entities behind this are the privately controlled central banks. So I would say to people, if you, if you are feeling threatened, it's because you are being threatened. You, you are being subjected to myriad threats at this point, and it is escalating. We are in an escalating global hybrid war. Now, the only reason this is possible is that there is a, a, a small group of people that have unlimited funding to do this. It's not being funded with your tax dollars. The taxes are just about harassing you and and taking, you know, take, you know, keeping you busy and and, uh, for some weeks of the year and taking, taking, uh, uh, keeping you down and taking stuff from you. But the scale of what they're doing comes out of the money creation. So a very simple example, if you have a dollar, and now a privately controlled central bank is created, and they create $2, they now have two times the purchasing power that you have, and you have a third of what you had before. This, this is, this is really, um, where their power comes from. Um, and then you add on to that that with with all of the debt that is created through, so the central banks always begin in a time of war. They fund the wars. The debt goes up maybe two orders of magnitude during, during the war time. And all of the interest on this tremendous amount of, uh, money creation is paid to the banking, to the banking cabal. So this is, this is how the Bank of England started 400 years ago. The Federal Reserve was built on that same model. And once, once the moorings are slipped with that, where the money is not issued by the government itself, for the treasury itself, and if that had been done, the public would owe the money to itself. Uh, with, with all of this going to the, this, uh, these private central banks, they then control the governments, not the other way around. Um, so we don't live in democracies because we've never, we haven't been allowed to have real democracies. They're controlled by, by the banking cabals. So this, this, um, you know, we, we will always have psychopaths, sociopaths, death cults. The problem is giving them unlimited funding. Yeah, if the central banks were all ended, then people could go off and think whatever they want to do, try to convince other people to back them in their schemes, but it would burn itself out. We, so we have given these people unlimited funding, and that's why it is an existential threat now toward all of humanity. Um, and as again, this is part of the spiritual aspect of this, we're seeing, we're seeing that, um, this is so dark, it's so evil that ultimately, and we don't want to see it, we, we don't want to face up to it, but ultimately, there's no alternative. And, um, the only way to stop these myriad threats toward you and your family and future generations is to end the power of these central banks. Now, it's, it's difficult for people to imagine that that could be done. We all have Stockholm syndrome thinking that, well, how could the system be any different than this? But it's been done before. Uh, that central banks have been, have been ended. The problem is we're, and the, and the, again, the spiritual aspect of this, this will be such a profound change for humanity when this is reversed. It's going to be painful getting, getting there, but then, um, all of all of this tremendous burden on us, um, will finally be, uh, gone. And, um, um, um, there can be, you know, the real world is is benevolent. Um, we are dealing with with global totalitarianism at this point. Um, there's a long beginning to this, more than a century.

Well, we've been here before. And his, uh, my interview with Matias Desmond, probably two years ago now, he said, look, totalitarian regimes, they have an arc, uh, and it ends in mass atrocity. Um, and that's just the way it rolls. And it does it for the same reasons because it's internally incoherent, the system. So let's get back up a little bit. Money, our money system, in my judgment, is fraudulent, it's corrupt, it's dishonest. Because like you said, a central bank can print purchasing power out of thin air. Well, that's an accounting fraud, right? Because purchasing power means you're purchasing real things. That's that's that's part of reality. But they are fantasy creating claims against this real stuff, which represents your output, my output, real work by real people, taking real risks, doing real effort. Okay? I submit that you can't, no matter how well you try and legislate or regulate or put rules around a fraudulent base money system, you still have fraud at its heart, and it ends up being fraudulent. And that's just that's how it is. Um, so that's why I started my thing called the crash course with money and how money is created because if you don't understand the, the headwaters of the Nile, it doesn't really matter for measuring the flow out at the at the mouth of the at the sea, right? You got to understand what's happening at the front end. So fraudulent money, here we are. But it has the seeds of its own destruction baked into it, which is, if you back up and just look at like credit aggregate or monetary aggregates, they're growing exponentially at more than twice the rate of the economy. That's a math problem. It's internally incoherent. It will break all on its own. But again, with mass atrocities in the sense of ruin dreams, ruin livelihoods, ruin, you know, retirements, all of that. And that's why, uh, you know, I spend my time trying to educate about this, David. And thank you for for doing your part as well, because if we don't get this right, we default into a pretty dismal outcome. And I, I know we can do better. It doesn't have to be this way.

Well, I do believe it can be backed, it can be stopped legally and peacefully. We, we have to, um, we have to see that just through exposure of this, we can realize that, um, there are no winners in this going to the, to the intended, the intended result. Even, even the, the, the people that are the owners of the cabal, the cartel, uh, it's not going to be good for them. They, they, it will lead to their own destruction ultimately. It's kind of an insane logic that they, they have followed. So I say it's an intelligent design, but it's insane. Um, so we, we have to unpack it. It's like we're all sleepwalking into this, including even the people that are abetting it. As, as you described at the beginning of this, even securities attorneys at the top of the banks don't really understand this. And it, it's such a big thing. Um, but it, but it, in a way, it's simple if you, if you can unpack it. Um, and people can see it and face up to it, we can, we can kind of break this spell that we're under and realize, no, we do not want this to happen. So it, it, it, it begins in our own minds. We help other people to see it and understand. I think that's happening rapidly now. Things like these actions in the states make it real for people that this is, this is no joke. This is really the case. And, um, when, when the banking lobby tries to refute this, and all they can do is lie and point to things that are nonsensical, that makes it even more apparent. Um, and, uh, then we can, we can, um, people that are abetting this have to, to, you see, the people at the top of this banking system, they don't do anything themselves. They're entirely dependent on a support layer beneath them to do everything. So imagine if the people at that level decide, hey, I don't want this to happen, and I'm not going to help anymore with this. You know, so, so there can be, it is like a great awakening to have. And, as, as I said before, it's maybe the first time in human history that divide and rule won't work because it's just gotten that big.

Well, fantastic. Great, great place to close on. Um, David, I could keep talking to you forever. We're going to close this up for now. Um, thank you so much for participating in our upcoming webinar. That's going to be fantastic for everybody interested. We'll tell you more about that. Where can people follow you and, and, uh, keep up with your hijinks?

Oh boy, I'm not very good about updating things. Um, I mean, the website is thegreattaking.com and the free PDF is there for people. Um, and, uh, you, you'll just see things out on YouTube or Rumble. And there, there will be more coming. I've been working with, uh, James Patrick, who's a documentary filmmaker, and he was, he was in South Dakota with me and in Tennessee and has been documenting these efforts. Um, and we were, we were also out in California and met with G. Edward Griffin, which was a great honor. Um, so James will continue doing this, documenting these efforts. And, uh, I would, I would ask people to visit his site, bigpicture.watch. And he's done, you know, tremendous work, documenting, uh, uh, he, he did a film called Planet Lockdown where he was on the spot through Europe during the lockdowns. And, uh, it's a very emotive piece to see just what that this really did happen, what we went through. And, uh, another piece called Nitrogen 2000 about the, uh, government of the Netherlands' intention to, to confiscate farmland. So he, uh, we will have more coming out about this.

Well, excellent. Well, thank you so much. Anything more I can do to help, just ask. And, uh, because I'm, I'm all in on this. So, so anything, anything we can do. Um, but please, just, uh, keep doing what you're doing and, uh, be safe. Thank you so much.

[Music]

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