Is The Great Taking Real?

I recently got an email from a concerned reader:

“I have followed your podcast and articles for a while and enjoy your content. I’m wondering if you’ve watched The Great Taking documentary or read the book?

This is so important with regard to ETFs and stocks etc.  Could you do some research and find out about the legal situation in Australia? This is scary stuff and not a conspiracy theory.  I hope we have better protection but I’m not so sure.”

The Great Taking ey?  Never heard of it.  Sounds interesting.

So I ended up watching the documentary.  And since I watched it, I may as well share my thoughts on it.  Especially since this reader may not be the only one worried about ‘The Great Taking’.

So what’s it about?

What is The Great Taking?

Here’s the one sentence summary…

“David Webb exposes the system Central Bankers have in place to take everything from everyone.”

I know what you’re thinking… stick with me.

I don’t do well with outlandish claims.  But since I basically never entertain videos like this, I thought why not?  It’s here if you wanna watch it.

The guy started speaking and he seemed quite humble, simply telling his personal story.  I detected no signs of hysteria, so I decided to listen on.

He also wasn’t selling anything – the book is available as a free PDF – and doesn’t promote gold, crypto, or anything else (he also says he’s not short the market).

Webb seemed like a genuinely concerned ex-hedge fund guy turned private citizen, trying to point out potential problems in the system.

Anyway, I ended up watching the whole thing.  Some of it was pretty interesting and he raised some good points.  But I didn’t come to the same conclusion he did.

Let’s run through some of the claims The Great Taking makes, and my thoughts on them.  Plus, I’ll share what was missing and my overall views on the financial system, future collapses, vested interests, and more.

Please remember, I’m a casual observer like you are.  Not someone who has intimate knowledge of the intricacies of the financial system.  So I’m not pretending to have all the answers, nor am I necessarily trying to ‘debunk’ the points raised.

Here’s the first thing I agree with: our financial ‘system’ is insanely complex.

So complex in fact, that most of the people running it probably don’t understand the entirety of how it all works.

I’m reminded of a witty Charlie Munger quote, which I’m probably butchering.  During an interview in the decade of zero interest rates, very low inflation and ‘quantitative easing’, when asked for his thoughts on the situation he said, “If you think you understand what’s going on, you’re an idiot.”

Anyway, Webb goes to great details pointing out the major ‘hidden’ risks in the financial system and the problems that have developed over time.

One by one, he notes each additional layer of regulation and rule changes (many of which aren’t well known), and how it has undermined the control and clear ownership of the individual.

There’s far too many things to cover here (and it’s fairly boring to be honest), but let’s explore the main themes of The Great Taking.

You don’t own anything

The ownership structure of assets like shares and funds is less clear than it used to be.

Webb points out that brokers tend to be the legal owners of the stocks that you’ve bought.  Instead of direct ownership, you have a ‘beneficial interest’.  Basically, assets are held on your behalf.

He claims that if a broker goes bust in the US, they’re legally allowed to use your securities to cover their losses.  As I understand, most US brokers are insured up to a certain amount (which he didn’t mention), but this is simply the tradeoff with ‘custodian’ brokers.  It’s partly how they’re able to offer ‘free’ brokerage.

We’ve had a few cases of brokers in the past going bust here in Australia.  Nowadays, people mostly use ‘CHESS sponsored’ brokers, where the broker does NOT own the shares on your behalf, unlike in the US.

For the ones that do, the broker usually has a third-party financial institution ‘holding’ the shares in trust on your behalf (such as JP Morgan or another behemoth) to protect against conflict of interest shenanigans.

Index funds work a bit like this too, by the way.  They’re trusts, which we have a beneficial interest in.  Basically, if a broker (or index fund manager) goes under, our funds are still in trust with an external party.  Sure, it could be a pain to transfer to a new broker/fund manager, but we still have legal claim on that pool of money according to the ‘units’ we own.

Now, I’ve not personally read anywhere that there’s a guarantee of no losses in such an event.  In theory, everything is perfectly safe and held ‘in trust’ with multiple layers of protection.  But in practice, we can’t say with absolute certainty what could unfold in a future financial crisis.  In short, there are unknown unknowns.

Banks can technically close off access to our cash if they deem it a risk to their financial stability.  They could do this through ‘technical’ issues, refusal of physical cash withdrawals, or closing off access to redraw accounts (which happened during covid with at least one lender).

I’m probably sounding a little tin-foil-hatty at the moment, but these things are simply true.  OK, so what could trigger The Great Taking?  Where we magically lose all our money.

We’ll get to that in a minute.  But here’s why Webb thinks bad things are coming.

The Great Taking and the next crash

In the late 2000s, a web of complex derivatives – leveraged bets on low quality mortgages – triggered huge bank losses and the credit crunch of the GFC.

The Great Taking suggests the same murky pool of contracts and derivatives has gotten much bigger since then.

Webb suggests that additional powers granted to financial institutions over the last 50 years, have incrementally undermined control for individuals.  He says that financial institutions are now legally allowed to use our securities, cash, bonds, and whatever else they ‘hold’ for us to cover their losses.

How?  Because technically, legal ownership is now theirs in many cases.  Here’s where it goes off track for me though…

He alludes to an upper echelon of mysterious figures who are pulling the strings and this is all a deliberate plan to confiscate the wealth of the masses in the next big collapse.   The documentary shows images of Rothschilds and old barons like Rockefeller, but he never actually mentions names who these instigators are.

Apparently it’s not just the masses being targeted, but also the wealthy and the elites.  “They’re saving the rich for dessert” was one of the lines from memory.  And while that’s a gripping claim, it makes absolutely no sense for countless reasons, which I’ll get to soon.

In practice, Webb thinks during the next crash, due to complicated ownership structures, banks and institutions will be allowed to take people’s securities and cash to cover against derivative losses and other obligations.  It’ll supposedly be done in the name of protecting the financial system.

Because the contagion and exposure to derivatives and losses will be so vast and widespread, creditors will also be allowed to take over the assets of pension funds, institutions, and even accounts of sophisticated investors.

The first half of the documentary was about sharing facts on how complex the system has become and the dilution of ‘direct’ ownership.  But the second half is… well… basically the end of the world.

What will trigger The Great Taking?

Webb thinks rising interest rates have started to cause it now, with certain pressures building inside a few banks.

He claims that as lower interest rates drove asset prices up, high rates will drive them down.  He uses some frankly horrible math to try and explain this.

Rates fell from 5% to 1%, and boosted values of bonds, stocks, and real estate.  So rates going from 1% to 5% will collapse asset values in reverse.

He suggests 80% falls based on those simple interest rate numbers.  Webb even goes so far as to suggest index funds will be worth 10% of what they were at the peak.

Look, I don’t know what the next crash looks like.  But this thesis isn’t even close to adding up.  Valuations of assets did not increase 5x due to interest rates, so the ‘reversing’ of this makes zero sense.

We know that to be true, because valuations have been largely underpinned by earnings.  For example, the stock market did not go from being priced at 15x earnings to 75x earnings.  And real estate didn’t go from transacting at 5% yields to 1% yields.

Then look at the current situation.  We had a few wobbles as rates began to rise off the floor.  But stocks and real estate markets have, for the most part, handled it relatively well.  In fact, local and US stock markets have been rising, and so are home prices and rents in most cities.

So the whole ‘rising rates will crash the economy/markets/etc’ idea is looking like an awfully bad call (made by MANY pundits and financial news outlets to be fair).

Real, fake, or just a mess?

One thing that bothers some people about the financial system is that money is literally made out of thin air by banks and central banks.

Now, banks do have restrictions on how much they’re allowed to lend against their capital.  But when your home loan is approved, banks are literally just creating digital entries on a screen.  The bank only has a fraction of that money in cash.

Central banks, like the RBA, can also do the same thing.  Obviously we could give everyone unlimited money but that creates inflation and deflates the actual value of that money, so people aren’t actually wealthier.

Webb points out how we’ve moved away from physical share certificates and title deeds as proof of ownership.  This is an interesting point.  The phasing out of paperwork means we can often have trouble ‘proving’ we own things.

He says this makes it easier to ‘steal’ our assets.  Not sure I buy that.  Remember, these things are literally just pieces of paper.  You need a legal system to enforce ownership.  If the “powers above” were really going to take your money, do you not think they’d also just stop people making claims of ownership in court?  Meaning the paperwork would be meaningless anyway in such a scenario.

“Damn, we can’t get Joe Bloggs money, that crafty bastard has a piece of paper.  Guess we’ll just everyone else’s then”  Come on, that’s a poorly thought out argument.  After all, you’d think these all powerful people would have the judicial system under control too.

I think Webb understands the complexity of markets and decided there must be something sinister going on.  But it’s worth remembering this quote: “Never attribute to malice that which is adequately explained by stupidity.”

If you think the people running the world are highly competent supreme beings, you’re probably not paying attention.  It seems more likely that the financial system has been one band-aid after another, sloppily attempting to fix one issue and inadvertently creating two more.

Compound that over 200 years and you’ve got a Frankenstein system which nobody really understands, is too confusing to untangle, but works most of the time.  And since we’ve mostly gotten wealthier as a society, nobody has the time/courage/energy to ‘fix’ it (whatever that would mean).

Why The Great Taking doesn’t make sense

Here’s a few other notes taken while watching the doco…

—  We’re supposed to believe that a tyrannical few have allowed vast amounts of the world to become wealthy and develop great standards of living… only to then take it away again later.  Again, come on.  Then what?

—  In any case, mass poverty doesn’t actually help these mysterious elites.  Are we not more useful as slaves who have some money to spend and will happily work for a few carrots?

—  If everything is taken from the masses, will we not just stop participating?  Of course we would.   There’d be widespread violence and it would essentially be the end of society as we know it.  The idea is too all-encompassing for it to not lead to this.

—  The productive system makes the richest much richer for as long as everyone else participates.  If we stopped playing the game, productivity, profits and asset growth would die, hurting those who own everything (apparently the end goal of The Great Taking).  Circular logic fail.

—  The perfect chance for The Great Taking was the GFC.  But governments papered over that as best they could with spending, effectively covered bank losses while handing out money to the public (using borrowed/public money of course).  Emergency central bank policies like suppressing bond yields and zero interest rates fed into higher house and stock prices (making most people wealthier while causing very little inflation during the 2010s).

—  The central bank in Australia (RBA) is not ‘privately owned’ like is suggested central banks are.  The RBA is owned by the Commonwealth Government and surplus profits are paid back to the government as dividends.  So while there are vested interests everywhere you look in finance, the situation isn’t the same everywhere.

—  In Australia, most share brokerage firms are ‘CHESS Sponsored’ not custodial like in the US.  Meaning you are the legal owner of those shares, not the brokerage company.   If the brokerage firm goes under, your shares can not be taken (unless there’s some loophole that has never been enacted which nobody knows about).

—  In Australia, most banks are guaranteed by the government.  So the idea that they’ll take your money to cover losses is stupid.  Especially since after the previous major catastrophe the government stepped in to ‘guarantee’ systemically important institutions and backstop any major bank failures.  So that doesn’t add up.

—  Our superannuation system, our housing market, our equity market, and banking system, are all interdependent on one another.  Everyone is tied to this system for our way of life.  All the politicians wealth and “higher ups” are invested in the same things that we are, even more so.

My overall view of The Great Taking

The documentary is amazingly heavy on problems and light on solutions.

While it has some valid points of concern – complexity, institutional powers, etc –  the conclusion and takeaways are farfetched and unhelpful.

It’s very defeatist in its assessment of the world.  A mindset that seems to be increasingly embraced, along with its cousin entitlement, both of which turn my stomach.

And while this type of negativity is persuasive (even appealing) to our survival-focused minds, I strongly believe anything this defeatist in its outlook is ultimately destructive for the average person.

It simultaneously leads to the toxic combination of zero action (because what’s the point?), and maximum stress (because everything’s fucked!).

Webb offers no real actions of solutions to the supposed Great Taking.  Everything will be taken: equities, bonds, cash, gold.  The government can usually take crypto too, and have done so in many cases, so that’s hardly a foolproof solution.

He says to pay off any debts you have, and to do things that make you happy.  But then also claims that even debt free real estate isn’t safe from being taken.  So… yeah.

If one is truly worried about something like this – what then?  Well, the best solution I can think of is to become as wealthy as possible and have as many different forms of wealth and income streams as you possibly can…  including physical cash, private businesses, as well as skills and relationships you can utilise in a worst case scenario.  Land and weapons you can defend it with probably won’t go astray either.  But that’s going next level with it!

There’s a fine line here between diversifying yourself, and living in a fear-based reality.   You can NEVER remove uncertainty, so the further you go down this road, the more peace of mind will prove elusive.

Final thoughts

Look, I’ll be honest.  As a finance nerd, I found some of The Great Taking interesting.  But I also feel dumber for spending my time on it and walking through these arguments😅

The world is a complex and messy place.  The financial world – with all its rules, regulations, interests, and interdependent and overlapping layers of securities, instruments and assets – is even messier!

Webb suggests one thing we could do is unwind the complexities in the system.  Yeah, good luck with that.

Look, there’s obviously a risk of huge financial catastrophes in the future, where everyone loses a lot of money.  That’s the reality of markets.  There’ll never be zero risk, just like walking down the street or driving to work.

But the idea of massive and deliberate confiscation of wealth by mysterious world-controlling figures who’ve concocted a plan over 50 years to rob us of all our resources so they can finally own EVERYTHING …. just ain’t stacking up.

In all seriousness, I think these fears are farfetched and wildly unrealistic.  Like most conspiracy ideas, they start off with a kernel of truth and end up at Armageddon.

In any case, if he’s right, you’ll have bigger problems to focus on, like food and self-defense, so maybe focus on that instead  😁

But that’s just me.  Maybe I’m a blind optimist.  Let me know what you think in the comments.