With Deutsche Bank It’s Déjà Vu, Again!

I warned of Deutsche Bank’s continuing unscrupulous activities, when I took over Gold Journal blog content back in April of this year. On June 30, 2016 the International Monetary Fund saw fit to release a report identifying Deutsche Bank as “the most important net contributor to systemic risks in the global banking system.” Unfortunately they buried it on page 42 of the report. Today’s headlines are full of market reaction to the suggested fine imposed by the U.S. Department of Justice regarding DB’s part in the 2008 banking debacle. I personally find it fascinating that the DOJ feels the need to fine a foreign company, but decides that American Banks guilty of the same malfeasance should be bailed out (by the American taxpayer) and their executives should receive bonuses, golden parachutes and Riviera retirements.

As investors flock to dump their Deutsche Bank shares, a more serious focus is being applied to the DB balance sheet which reflects $2 trillion, but doesn’t account for a gross derivative exposure book of more than $46 trillion. As investors attempt to hedge their exposure in the event of a default, global banks are scrambling to exchange Euros for Dollars in a panic, which is exposing the fact that as of June 1, 2016 the U.S. had $1.46 trillion of currency in circulation and over $12.5 trillion in the M2 (cash, checking & savings deposits) money supply. Many are concerned that if only 15% of depositors tried to withdraw their money from the system, it appears that there’s not enough currency in the system to back it up, which could cause the banks to shut down.

As reports begin coming in about a possible settlement, at a fraction of the DOJ proposed fine, the markets seem to be settling down and going back to life as usual. This is exactly the reason I want to shake my readers right in their seats. There is nothing normal about this! DB is only one of many global banks that are dangerously exposed due to their unchecked abuse of derivatives. Central banks all over the world are in terrible condition, experimenting with absurd techniques and many are on the verge of going belly up. Considering the pathetic growth of the Chinese economy, the even more than pathetic fact that they are the world’s fastest growing economy, and the imminent induction of the Chinese Yuan into the IMF basket of Global Reserve Currencies, you have to wonder how long the IMF will allow this insanely biased and deteriorating program to continue.

For most economies, a transition to an IMF “One World” currency would be no big deal. However, it would wreak a great deal of havoc on the already troubled economies of Japan, Britain and the European Union, and substantially less on China, due to the newness of their position. Russia could arise as the big winner, due to the new footing it could represent. But the U. S. economy would be all but destroyed. Phenomenal benefits that we’ve taken for granted for more than seventy years, could be wiped away virtually overnight. I could spend several articles explaining that in detail, but suffice it to say that the best hedge against all aspects of this brewing tsunami of economic animosity is PHYSICAL PRECIOUS METAL OWNERSHIP!

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