History Rhymes: A Look At Deutsche Bank

Many a free marketeer has made projections as to when this bubble infested economy may implode. Some rely on the weakening purchasing power in the world’s currencies as central banks devalue their currencies at an ever accelerating rate. Others look eastward as China begins to compete with the western central banking status quo. We see an emerging Shanghai Gold Exchange that will become the physical counter to the COMEX’s paper gold. The Asian Infrastructure Investment Bank (AIIB) which will be diametrically opposed to the IMF’s regime of extortion. An ever faltering Eurozone with Greece only being the salad before the main course. All of this may be true, but others are looking internally at the banking system itself. As a wise investor once said, “History may not repeat, but it does rhyme. In market terms, it tends to rhyme every seven years.” Let us not forget the catalyst that brought about the 2008 Financial Crisis, Lehman Brothers.

More exactly let us look at Deutsche Bank. The fly in the banking regime’s ointment of bail outs, equity and derivative purchases and quantitative easing has been in the Eurozone’s strongest economy all along. Deutsche Bank has been compared to Lehman Brothers on many levels, mainly because of it’s huge exposure to derivatives. With more than $75 trillion in derivative bets, it out paces a giant like JP Morgan by $5 trillion and the German GDP by twenty times. Many market analysts believe Deutsche Bank’s exposure is being severely understated. As Dave Kranzler of Investment Research Dynamics pointed out, DB isn’t like Lehman before the 2008 blow-up, it’s more like 2008 x 10. Deutsche Bank has declared an asset value of $1.5 trillion on top of $67 billion of net worth. A large portion of its assets are in loans and investment vehicles that are connected to Glencore (in trouble), Volkswagen (in trouble), the energy sector (in decline) and hard hit emerging market companies. If Deutsche Bank missed the actual market value of these assets by a simple 5%, its total net worth will be wiped out. For more on this listen to the podcast, “Deutsche Bank and the Coming Global Financial Catastrophe”.

If Deutsche Bank begins to falter the need for the ECB to create Euros will accelerate at an alarming rate. Think Wiemar. The Federal Reserve will probably be called upon for an emergency rescue as all of these zombie banks are being kept alive from the same beating heart. Think about those four words that killed capitalism, “Too Big To Fail”. The cascade of failures will be reminiscent of 2008, but much worse. In 2008 the middle class was wiped out, this implosion will wipe out the investor class. Once the dust settles only a handful of criminals will be left with all of any wealth that may be left after a global reset.

China is hedging its bet on its heavy gold and silver position. They hope as the west’s fiat regime descends into a fiery hell, the markets will turn east for a rescue and some simulation of sanity. But the western central banking power elite will not simply “let” a failure occur. Tensions in the middle east and Eurasia are a foreshadow that these crazies are gearing up for global war. Do not be surprised if a false flag event happens just as the markets begin to falter. Many Keynesian economists believe that a war spending regime could rescue a failing economy. They wrongly assumed WWII ended the Great Depression. Actually, as economist Robert Higgs pointed out in his book, “Depression, War and Cold War” the increase in private sector investment after the war is what ended the Great Depression. But governments rarely let facts influence their decisions when it comes to war.

In concluding, lets not ignore the aforementioned problems with the economy. That is, the currency wars, growing welfare dependency, distortions and manipulations in the investment markets and so on. These are all relevant and are cracks in the foundation of this shaky house of cards. Deutsche Bank still looms large as the biggest blip on the radar at this time. Never underestimate the level of incompetence of these elitists. In 2014, Deutsche Bank hired Tom Humphrey, a two decade executive at Lehman Brothers Holdings, Inc. to head the German’s investment-banking and securities business in North America. See, we’re all in good hands.

 

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