The Great Dessert: The Geopolitical - Financial Endgame

Part I of III

“If you are wealthy, you might assume that, because the system has allowed you to accumulate wealth, you will be protected in some way, that you are special. You are special. They’re saving you for dessert.”^[i] David Rogers Webb

Part I: Reviews

Part II: The Transition

Part III: The End Game

Part I: Reviews

The Geopolitical Review

With the fall of the USSR in 1991, paraphrasing Ursula von der Leyen, Russia and its economy were in tatters. China’s economy was only 22% of the U.S. and 12% of the G7. Millennial dreams of total global dominance suddenly seemed possible.

These dreams were reflected in the U.S. Department of Defense’s Wolfowitz Doctrine[ii] of 1992 advocating for the prevention of any regional power from developing. In 1997 Zbigniew Brzezinski’s The Grand Chessboard: American Primacy and Its Geostrategic Imperatives,[iii] laid out the Empire’s geostrategy centered around control of Southwest Asian energy reserves. In 2000 the Project for the New American Century’s (PNAC) Rebuilding America’s Defenses - Strategy, Forces and Resources for a New Century[iv] presented military requirements for total global dominance.

9/11 provided the ‘catastrophic and catalyzing event – like a new Pearl Harbor’[v] needed to implement the strategy. As revealed shortly after 9/11 by General Wesley Clark: “In addition to Afghanistan we’re going to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan and Iran.”[vi]

By “taking out” Clark’s seven countries, Empire’s control of global oil and gas reserves would increase from 74% to 93% i.e. total energy dominance, consequently “total global dominance”.

In the three decades since the fall of the USSR, while the Empire was mired in wars for total global domination; Russia, Iran, and China (RIC) were immersed in across-the-board national development. This is reflected in the data of real economies, i.e. production of tradable goods:[vii]

• 1991: G7 economies were 330% greater than that of Russia, Iran and China (RIC).

• 2007: Peak of the G7 economies, which have since been shrinking.

• 2011: Chinese economy overtakes the U.S. economy.

• 2017: The RIC economies overtake the G7 economies.

• 2020: Chinese economy exceeds total of the G7 economies.

Education being the foundation of both economic and military technology development, it was therefore natural that the military-industrial-complexes of the RIC achieved significant development since 1991. Thus, while Western military-industrial-complexes were stuck in 1980’s technologies, unable to develop any new effective weapon systems since 1990,[viii] the RIC moved forward with great strides, as has been demonstrated during the Ukraine war and several times by Iran since 2011, including using cyberwarfare to take over the “stealth” RQ-170 drone in 2011,[ix] the shooting down of RQ-4A Global Hawk in 2019,[x] and the January 2020 Iranian strike on the US Ain Al-Asad airbase in Iraq,[xi] signaling the end of the Empire’s military hegemony.[xii]

The Financial Review

It has been shown that reference to “Empire” in Why the West Can’t Win is not, as commonly misconstrued, the “U.S.” Empire; rather it is a Money Powers Empire, the origins of which are traceable to the First Crusade.[xiii] Since, the center of the Empire migrated from Venice to Amsterdam, then to London and finally New York, with Western nations having lost their sovereignty simultaneously with the establishment of privately-owned central banks. Thus, in parallel with monitoring geopolitical events, it is essential to track significant global events within the realm of finance.

The most significant event since the fall of the USSR has been the establishment of a legal framework enabling a global transfer of wealth to the “Protected Class.”[xiv]

The technical requirements had been put in place back in 1973 with the establishment of the Depository Trust Company (DTC) as the securities depository where all securities are digital and are pooled. 

Following is a timeline of important milestones in establishment of this legal framework:

1994 - USA: Revising US commercial laws and regulations (UCC)

The Uniform Commercial Code (UCC) is the standardized set of laws and regulations for transacting business in the U.S. The UCC consists of nine articles.[xv] Articles 8 and 9 which are concerned with investment securities; the holding of securities through intermediaries and secured transactions and security interests, were modified in all 50 states as follows: [xvi]

• Ownership of securities 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.

• Account providers are legally empowered to “borrow” pooled securities, without restriction. This is called “self-help.” The objective is to utilize all securities as collateral.

In the above, secured creditors effectively relates to the secured creditors of the “Protected Class”. Criteria for being a member of the “Protected Class” can be gleaned from the judicial opinion of Judge James M. Peck, U.S. Bankruptcy Judge of the U.S. Bankruptcy Court, Southern District of NY, Case No. 08 – 13555, pitting JPMorgan Chase Bank vs. Lehman Brothers clients whose assets were taken:[xvii]^,[xviii]

The Court first must consider whether JPMC is eligible for protection under section 546(e).  That subsection, like the safe harbors generally, applies only to certain types of qualifying entities. 

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.”  JPMC unquestionably fits the Bankruptcy Code’s definition of “financial institution.” 

JPMC also is a “financial participant” because it is a party to outstanding safe harbor contracts totaling at least $1 billion in gross notional or principal dollar amount. 

That JPMC fits the applicable definitions for safe harbor protection is not in dispute, and the Amended Complaint concedes this point.

It is clear from the above that criteria, that the Protected Class consists of:

• Leading financial institutions.

• Financial participants that are party to outstanding safe harbor contracts exceeding $1bn.

So, the “Protected Class” is essentially the largest financial institutions. From Table 1 below, it is noted that a handful of hedge funds are the largest shareholders with controlling shares in the top five U.S. banks. Therefore, it can be concluded that the “Protected Class” are the major hedge funds owners. It is worth noting that these same hedge funds have a controlling share in all listed companies globally, and that it is these same hedge funds that have engineered the hyper-crisis discussed in the following.[xix]

Table 1 Hedge Funds Vanguard, BlackRock, State Street and T. Rowe Price Ownership in Largest U.S. Banks.

1998 – Europe: Eliminating jurisdiction sovereignty in Europe– PRIMA

Place of the Relevant Intermediary Approach (PRIMA)[xx] is a “conflict of laws” rule applied to the proprietary aspects of security transactions, especially collateral transactions.

PRIMA removes jurisdiction from a nation where a security is held to the law of a single jurisdiction.

The purpose is to avoid problematic national laws which might allow owners to recover their assets taken by a creditor as collateral, by setting the place of law in the account agreements with intermediaries.[xxi]

PRIMA was introduced to all European countries as Article 9(2) of the European Union's Settlement Finality Directive.[xxii] 

2006 – Global: Eliminating jurisdiction sovereignty globally – PRIMA

The “Hague Convention on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary” extends PRIMA globally. Introduced in 2002; ratified in 2006.[xxiii]

2014 – Enforcing law of a single jurisdiction on recalcitrant countries in Europe

In 2006, the Legal Certainty group identified Sweden and Finland as having problematic laws. This was solved with EU regulation 909/2014.[xxiv]

Quoting David Rogers Webb:^[xxv]

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.

Following the legal changes made in 2014, clients in Sweden were only offered custody accounts.

By 2014 the legal framework was complete, so that in the implosion of “The Everything Bubble,” collateral will be swept up on a vast scale. 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,” ^[xxvi] the Protected Class being the owners of the major hedge funds as mentioned above.

There are now no property rights to securities held in book-entry form in any jurisdiction globally.^[xxvii]

Fragility of the Global Financial Structure

Fragility is built into the global financial system which is dominated by one privately held company: The Depository Trust and Clearing Corporation (DTCC), which through its subsidiaries controls the markets, including:

• DTC: Central Securities Depository, CSD

• NSCC, FICC and Deriv/SERV LLC: Central Clearing Counterparty, CCP

DTCC processes trillions of dollars of securities transactions on a daily basis and a total of $2.5 quadrillion in 2022.[xxviii]

DTCC holds central custody of more than 1.4 million active securities with a combined value of $87.1 trillion, including securities issued in the U.S. and more than 131 countries and territories.[xxix]

Total shareholders’ equity of the privately held DTCC is $3.5 billion.^[xxx] Thus the entire capitalization underpinning the Central Security Depository (CSD) and Central Counterparty clearing house (CCP) for the U.S. and some other countries’ securities market and derivatives complex is less than 0.03% of daily transactions and less than 0.0004% of the derivatives market, currently estimated at over $1 quadrillion.^[xxxi]

To make matters worse, central banks have been inflating the “Everything Bubble” for twenty years.^{[xxxii],[xxxiii]}

Labeling the global financial structure as “fragile” is a gross understatement.

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[i] The Great Taking, David Rogers Webb, Ver. 1.2, Nov 28, 2023.

[ii] Defense Planning: Guidance FY 1994-1999 April 16, 1992 , Paul Wolfowitz and I. Lewis “Scooter” Libby, Feb 18, 1992.

[iii]The Grand Chessboard: American Primacy and Its Geostrategic Imperatives, Zbigniew Brzezinski, Apr, 1997.

[iv] Rebuilding America’s Defenses - Strategy, Forces and Resources For a New Century, PNAC, Sep, 2000.

[v] Ibid.

[vi] General Wesley Clark “We’re going to take-out 7 countries in 5 years.”, Democracy Now broadcast, March 2, 2017, YouTube Video, 7:51, Nakama, March 6, 2019.

[vii] WHY THE WEST CAN’T WIN: From Bretton Woods to a Multipolar World, Fadi Lama, Clarity Press, May 1, 2023.

[viii] ibid

[ix]What shooting down a $110M US drone tells us about Iran, Nick Paton Walsh, CNN, Jun 25, 2019.

[x] Iran Shoots Down U.S. Global Hawk Operating in International Airspace, Jim Garamone, U.S. Dept. of Defense, Jun 20, 2019.

[xi]Al Asad Missile Attack Nearly Killed 150 US Troops, Destroyed 30 Aircraft: Report, Gina Harkins, Military.com, Mar 1, 2020.

[xii] WHY THE WEST CAN’T WIN: From Bretton Woods to a Multipolar World, Fadi Lama, Clarity Press, May 1, 2023.

[xiii] Ibid.

[xiv] The Great Taking, David Rogers Webb, Ver. 1.2, Nov 28, 2023.

[xv] Uniform Commercial Code (UCC): Definition, Purpose, and History, Daniel Liberto, Investopedia, Feb 8, 2022.

[xvi] The Great Taking, David Rogers Webb, Ver. 1.2, Nov 28, 2023.

[xvii] U.S. Bankruptcy Court, Southern District of NY, Case No. 08 – 13555, James M. Peck U.S. Bankruptcy Judge, 2008.

[xviii] The Great Taking, David Rogers Webb, Ver. 1.2, Nov 28, 2023.

[xix] WHY THE WEST CAN’T WIN: From Bretton Woods to a Multipolar World, Fadi Lama, Clarity Press, May 1, 2023.

[xx] Place of the Relevant Intermediary Approach, DBpedia, 2024.

[xxi] The Great Taking, David Rogers Webb, Ver. 1.2, Nov 28, 2023.

[xxii] Directive 98/26/EC of The European Parliament and of The Council, on settlement finality in payment and securities settlement systems, Official Journal of the European Communities, Jun 11, 1998.

[xxiii] Hague Convention of 5 July 2006 on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary, Christophe Bernasconi, IMF, Oct 23, 2006.

[xxiv] Regulation (EU) No 909/2014 OF the European Parliament and of the Council, on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012, Aug 28, 2014.

[xxv] The Great Taking, David Rogers Webb, Ver. 1.2, Nov 28, 2023.

[xxvi] bid

[xxvii] ibid

[xxviii] Performance Dashboard, DTCC, Jan 26, 2024.

[xxix] The Depository Trust Company (DTC), DTCC, Jan 26, 2024.

[xxx] The Great Taking, David Rogers Webb, Ver. 1.2, Nov 28, 2023.

[xxxi] How Big Is the Derivatives Market?, J.B. Maverick, Investopedia, May 30, 2022.

[xxxii] Billionaire Seth Klarman Says the ‘Everything Bubble’ Might Pop Soon, but Stays Heavily Invested in These 2 Stocks, TipRanks, Yahoo Finance, Jul 20, 2023.

[xxxiii] There's an everything bubble across stocks, crypto, and housing — and it will burst spectacularly in 2024, market historian says, Theron Mohamed, Yahoo Finance, Dec 20, 2023.

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