With Euro-zone banks showing renewed signs of crisis (Deutsche Bank deleveraging by a massive €425 billion over the past year- the fastest pace since the 2011 near-Euro collapse, and Barclays admitting a £12.8bn capital shortfall Tuesday) and fundamental indicators in the gold market screaming financial crisis (GOFO rates remain negative for nearly 20 days and massive inventory draw-downs at the COMEX & LBMA), The Doc spoke with Jim Willie Tuesday in an explosive MUST READ interview.
Willie, who recently stated that Deutche Bank is under major duress and could be the first major bank to collapse in the next stage of the banking crisis, informed The Doc that unlike the collapse of Lehman Brothers in 2008 which the Western Central banks were able to contain thanks to $13 T in bailout funds, a failure of Deutsche Bank would trigger a systemic banking contagion the likes of which the Western world has never seen.
When asked by The Doc how Deutsche Bank differs from Lehman Brothers in 2008, and what events could lead to a renewed banking crisis, Willie responded:
My best German source informs me that 3 major banks are in trouble, and these 3 banks are fighting every single night to fight off insolvency and failure. He says CitiGroup in New York, Barclays in London, and Deutsche Bank in Germany- every single night are in trouble.
The important thing to keep in mind about Deutsche Bank is that it won’t go down alone if it goes down at all. If it fails, it will take along with it 3,4,5,6 or 10, or 15 other banks! It will be 1 or 2 quickly, then a 3rd and 4th a few weeks later, another, then before you know it, all of Italy and their major banks would be kaput.
My belief is that Deutsche Bank and its constant overnight risk of failure is somewhat tied to derivatives related to LIBOR, and also a risk related to their FOREX derivatives. In other words, derivatives that the banks use to balance off the currencies.
Believe it or not, in the derivatives world, gold is treated like a currency. Isn’t that ironic?
The FOREX derivatives that the banks are involved in are very much tied to gold.
Read more: http://www.silverdoctors.com/jim-willie-if-deutsche-bank-goes-under-it-will-be-lehman-times-five/
One chart says it all:
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/04/German%20GDP%20vs%20DB%20Derivatives_1_0.jpg
Gregor Peter @L0gg0l 5 h
Deutsche Bank trouble said to be connected to currency swaps
” It Won`t Be Soon Before Long “
Deutsche spelled out moves to reduce leverage by reducing its notional derivatives exposure by some €250 billion. (It is hard to imagine any other industry where you could lose a quarter of a trillion in assets and not have a material impact on earnings, but that’s banking for you.)
http://www.economist.com/blogs/schumpeter/2013/07/european-banks?zid=300&ah=e7b9370e170850b88ef129fa625b13c4
Care for some gopher with the Bigger picture,Hans?
Gangsta Banksters
According to the Reserve Bank of India, “the traded amount of ‘paper linked to gold’ exceeds by far the actual supply of physical gold: the volume on the London Bullion Market Association (LBMA) OTC market and the major Futures and Options Exchanges was OVER 92 TIMES that of the underlying Physical Market.”
http://www.silverdoctors.com/the-coming-shortage-of-physical-gold-that-will-change-everything/
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