Good money wealth is outside the system and therefore, much harder to confiscate. Whereas the most important market function of fiat money wealth is to easily and almost invisibly confiscate wealth through inflation and crisis. Transparency is the catch phrase used to justify many of the new rules and regulations in the Dodd Frank Act. But I suggest that the transparency they seek is for the central banks and not for the typical citizen. I say this because the legal ownership of almost every contractual financial instruments is, by design; complex, convoluted, distorted and opaque with one “Legal Owner” (Cede & Company) and many layers of “Beneficial Owners”, (brokerage houses, banks, hedge funds and insurance companies) until they finally list you as the final “Beneficial Owner” on the bottom of the heap of many beneficial owners. “Legal” ownership is defined as registered on the books of a company’s stock or bonds. “Beneficial” ownership is generally defined as encompassing the right to vote and dispose of the shares.
If you have the ability to buy or sell, receive dividends and proxies, your perception is that you own something, but legally, you do not. Chances are, when you bought that stock or bond from your broker, you did not go on the SEC web site to see if your name was registered as the owner. You most likely assume you own it since you paid for it and you get a statement with a list of your “holdings”. But your assumption is dead wrong because, unless you specified otherwise, when you signed the new account agreement and made that first transaction, you agreed that everything in that account would be held in “Street Name”. The SEC states, “Many brokerage firms will automatically put your securities into street name unless you give them specific instructions to the contrary.
Under street name registration, your firm will keep records showing you as the …"beneficial" owner, but you will not be listed directly on the issuer's books. Instead, your brokerage firm (or some other nominee) will appear as the owner on the issuer's books.” Here is the link to the SEC. http://www.sec.gov/investor/pubs/holdsec.htm and here is a link showing Cede & Co as legal registered owner of a particular stock. http://www.sec.gov/Archives/edgar/data/1166390/000101996502000143/indy01h1_10k.txt Who is Cede & Company? They are a “nominee” of DTC created in 1996 to be the “legal owner” proxy for DTC.
“The Depository Trust Company (DTC), an operating subsidiary of The Depositiory Trust & Clearing Corporation (DTCC), Is the central securities depository in the U.S.” “DTC was formed in 1973 to immobilize securities in a central holding system” “Securities deposited at DTC for book-entry services are registered in the name of DTC’s nominee (Cede & Co.), so that DTC holds legal title to the securities vis a vis the issuer.” “DTC is a limited purpose trust company, organized under the New York State Banking Law, a State member bank of the Federal Reserve System”. DTC became part of the Federal Reserve system in 2010, so the Federal Reserve is now backstopping DTC.
http://www.dtcc.com/~/media/Files/Downloads/WhitePapers/Sevice_Restriction_September2013.ashx and http://www.newyorkfed.org/banks.html So according to DTCC and the Federal Reserve, DTC was created to “immobilize” securities in a central holding system. In other words, these companies were created to dematerialize securities (no more stock or bond certificates) and put them in one place where they are easily controlled. Because when securities are in one central location, ownership can be easily and invisably transferred as witnessed by Cede & Company ownership of almost every security on the planet and most likely, you never heard of them. Isn’t that illegal? CFTC 1.25 and CFTC 30.7, which are part of the new and margin account contract, make this legal.
This is where you agree to hold all securities in “Street Name” and give your broker “Power of Attorney”. In addition, give up your legal rights to any security held in that account, which is why they can use your equity for their benefit and be classified as a beneficial owner. If they own almost everything in the world, why haven’t I heard about them? Because if you clearly understand that you are legally giving your wealth to the bankers, you might make a different choice, and that would not support their goals. So let’s take a look at the convoluted system designed for the banks by the banks.
It’s good to be King. First let’s look at DTCC’s organizational structure. DTCC is overseen by the SEC, Federal Reserve and the New York State Department of Financial Services, you can see in the flow chart below, that DTCC owns many subsidiaries. Those subdidiaries are “Clearing” houses, globally positioned to insure that almost all market transactions flow through DTCC. In this way, securities can be “immobilized” and secured in one central location, which is infinately easier to control than when individuals were the “legal” owners and held certificates outside the system. Who is DTCC?
According to Wikipedia “The Depository Trust & Clearing Corporation (DTCC) is a US post-trade financial services company providing clearing and settlement services to the financial markets. It also provides central custody of securities. DTCC was established in 1999 as a holding company to combine The Depository Trust Company (DTC) and National Securities Clearing Corporation (NSCC). User-owned and directed, DTCC provides clearance, settlement, and information services for equities, corporate and municipal bonds, unit investment trusts, government and mortgage-backed securities, money market instruments, and over-the-counter derivatives. It also manages transactions between mutual funds and insurance carriers and their respective investors. In 2011, DTCC settled the vast majority of securities transactions in the United States and close to $1.7 quadrillion in value worldwide.”
Who has legal title to all of those financial instruments held in custody? Cede & Company, which is a private holding company owned by DTC, which is owned by DTCC, which is “owned by many companies in the financial industry, with the NYSE being one of its largest shareholders. Securities brokers, dealers, institutional investors, depository institutions, issuing and paying agents and settling banks use the DTC, but individual investors do not interact with it.” So all the usual guys; Goldman Sachs, JP Morgan, Citi etc. http://www.investopedia.com/terms/d/dtc.asp Confused? Sorry, but it’s about to get even more convoluted though I’ve tried to make it simple. This link takes you to the paper prepared by Yale Law which examines custodial ownership of financial instruments such as stocks, bonds, money markets, mutual funds etc.
http://www.law.yale.edu/documents/pdf/cbl/Wilcox_streetname.pdf From the Yale paper; 12.2 “LEGAL” VS. “BENEFICIAL” OWNERSHIP OF STOCK (1) Legal Ownership There is a variety of rights which are incident to share ownership, including the right to vote, the right to inspect a company’s books and records, and the right to dissent from a merger and demand appraisal. Whether one may asset these rights depends on the nature of one’s ownership interest. In Delaware, as in nearly every other jurisdiction, these rights belong solely to the “legal” owner of the stock. A company’s share register sets forth the legal owners of that company’s stock. The legal owners of the stock are commonly referred to as either the “registered” owners of the shares, because the owner’s name appear on the company’s share register or, where there is a record date (e.g., for voting or dividend purposes), the “record” owners, because they legally own the shares on the record date.
Legal owners often hold share certificates that represent their ownership interests in the company. (2) Beneficial Ownership The largest “legal” owner of most public companies’ shares is The Depository Trust Company (“DTC”), the world’s largest securities depository. DTC registers its shares on companies’ share registers under the name “Cede & Co.” DTC is owned by its “participants,” which are the member organizations of the various national stock exchanges (e.g., State Street Bank, Merrill Lynch, Goldman Sachs & Co.). Although DTC is the legal owner of the shares in its vaults, it has no “beneficial” interest in them. “Beneficial” ownership is generally defined as encompassing the right to vote and dispose of the shares. Shares “legally” owned by DTC are “beneficially” owned by its participants (if they hold for their own investment accounts) or its participants’ clients.
Shares deposited at DTC-or otherwise registered on a company’s books in the name of an entity other than the beneficial owner-are said to be registered in “street name.” The following is a flowchart from the above Yale Law piece. I’ve done my best to simplify it so you could see the truth, though there may be many more beneficial ownership layers, you will always be on the bottom. As you can see in the above flow chart as well as the links provided, Cede & Company is the “Legal” owner but they allow you to have the benefit of buying and selling and they pass dividends and proxies through to you as the “Beneficial Owner”, so in your mind everything is A OK.
As long as the system is working properly, you’ll never know the truth. But the advantage of a “Central Counterparty” having custody of almost every financial instrument, particularly in the fragile global economic environment, should be crystal clear. If the Federal Reserve needs to stop market trading, there is only one button to push. And as of 2-10-2010, the Federal Reserve is back stopping the $1.7Quadrillion derivative market. Here is the link to the Financial Stability Board’s establishing DTCC to control global derivative contracts.
http://www.financialstabilityboard.org/publications/c_140416f.pdf Here is a link that positions DTCC to control all global collateral including cash and gold. “Collateral Transformation” means create derivatives which is already 25 times greater than the global GDP. (Now I’m scared) http://www.finextra.com/finextra-downloads/newsdocs/CollateralMGMT_WhitePaper.pdf “In financial markets, collateral is broadly interpreted but typically includes cash, securities and, at times, commodities such as gold.” “Collateral transformation is another form of collateral optimization. It allows firms to exchange collateral that may not be acceptable due to credit, liquidity or other reasons with collateral that is considered acceptable. For example, a firm that is required to pledge cash as margin but has only securities on hand may use collateral transformation to exchange these securities for cash to meet the margin requirements.
There are many different mechanisms to transform collateral, including stock-lending, repo transactions and structured deals.” Good, everything in one place, owned by guys that pushed the entire globe into financial crisis because you gave them power of attorney over your collateral and now they can transform it. The following quote is from Fed Commissioner Bart Chilton at a risk management conference. Chilton asks, “Why is it that nobody went to prison for what took place in 2008? After all, according to the Financial Crisis Inquiry Commission (FCIC), the Captains of Wall Street took advantage of lax, or non-existent, rules and regulations that created the chaos. The answer is direct. Nobody violated the law.” Of course, legally, there needs to be additional tools to protect those Captains of Wall Street in case too many investors decide to “run” at the same time. DTC Chills and Freezes: “The SEC’s Office of Investor Education and Advocacy is issuing this Investor Bulletin to help educate investors about the effects of chills and freezes on an investor’s ability to hold and trade securities.
A “chill” is a limitation of certain services available for a security on deposit at The Depository Trust Company (“DTC”). A “freeze,” formally referred to as a “global lock,” is a complete restriction on all DTC services for a particular security on deposit at DTC.”
http://www.sec.gov/investor/alerts/dtcfreezes.pdf I hope you can see the truth, IF YOU DON’T HOLD IT, YOU DON’T OWN IT. At this point we’ve covered everything but cash. No worries, legally, that’s been taken care of too through Dodd-Frank. It’s called “Bail-In”. The Bank of International Settlements published the template of how, what you think of as your deposits, are legally classified as unsecured loans, can be converted into stock in a failing bank over the weekend. If too many people yell, they’ll honor deposit insurance, but the FDIC will contribute what they would have taken from your account. Of course the FDIC only has $40Billion to insure $10Trillion, but no worries the Treasury is backstopping them in that case. Here is the link to that template http://www.bis.org/publ/qtrpdf/r_qt1306e.pdf The following is the bar chart on what that conversion looks like. Still confused? Of course you are, that’s the goal. Because then you stay put and vulnerable. This is contractual wealth.
Complex, opaque and not written for your benefit. So here is the bottom line. I know it’s hard to wrap your brain around the complex, convoluted and opaque mechanisms that have been put in place for the benefit of the banking system. This started in 1913 and is coming to conclusion now.
Everything…EVERYTHING is in place for the final wealth transfer, so when do you want to know about it? All of the markets are being blatantly and admittedly manipulated so that you participate in a way that keeps you in the system until they are ready to let you know that you own nothing. Today you can take your wealth back. If it costs you taxes, fees or penalties, that’s cheap compared to what it will cost you when the next looming financial crisis strikes.
As much as I pay attention and understand, it is doubtful I will know the day before the next crisis hits. Technical signals are screaming even as they try to drown them out with manipulation. Do yourself and your family a service, take back your contractual wealth and convert it into real wealth; physical gold and silver. The central banks have been doing that since 2008 leading to a severe shortage in the physical market. One day soon, when you see the truth and want to convert, you might not be able to do so. So I strongly encourage that you make that choice today.
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