New U.S. Currency Already in Our Money Supply

From the site of the DTCC, September 1, 2012

Targeting Paper

DTCC Calls for Full Dematerialization

DTCC’s dematerialization plan focuses on three primary areas in physical processing: traditional physical transactions, new issues and existing inventory in the vaults of The Depository Trust Company (DTC). To target these areas, DTC will:

  1. Introduce ways to reduce volumes, costs and risk associated with traditional physical transactions. These are transactions clients regularly send to DTC for immobilization. DTC anticipates eliminating physical deposit activity altogether by 2015.
  2. Develop recommendations that will eventually eliminate the need for physical certificate processing of new issues.
  3. Work with the industry to reduce physical certificates held in the DTC vault, as well as reducing and ultimately eliminating those certificates held in DTC’s street name, Cede and Co. This will not affect the depository’s Non-Cede Custody Service, which offers limited services for assets that are not fully eligible.

As of September 2014, DTCC had not replaced the damaged stock certificates and had laws suites filed against it. There were also many thousands of FBI and other documents also stored in this “depository.”  DTCC was not worried at all about the loss because most the of the stocks and bonds were owned by their sister partner, Cede & Co.  And as we can see in their Targeting Paper above, DTCC was hoping to “dematerialize” the Cede & Co stock and bonds…then OOPS!…Someone just happened to leave the vault door open for Hurricane Sandy.

It is worth taking a moment here and delving into the mystery company DTCC and its partner in crime, Cede & Company.

DTCC and its partner in crime, Cede & Company

Wikipedia defines DTCC as: “An American 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, it automates, centralizes, standardizes, and streamlines processes in the capital markets. Through its subsidiaries, DTCC provides clearance, settlement, and information services for equities, corporate and municipal bondsunit 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, making it by far the highest financial value processor in the world.” 

DTCC’s depository provides custody and asset servicing for more than 3.6 million securities issues from the United States and 121 other countries and territories, valued at US $36.5 trillion. In 2010, DTCC settled nearly US $1.66 quadrillion in securities transactions in 2012.

DTCC is about 34% owned by the New York Stock Exchange on behalf of its members.  It is a limited purpose trust company and is a unit of the Federal Reserve.

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