February 9, 2016

“2008, Part II” has already started. And frankly, anyone who is NOT running to the exits right now, in my view, has a financial death wish. Or, for that matter, NOT protecting at least a portion of their hard-earned life’s savings with Precious Metals, at today’s historically Cartel-suppressed prices. Remember, during 2008, the world RAN OUT of gold and silver for roughly two months! Only this time, supply is much lower to start with; demand much higher; and the amount of printed money that will chase said scarce supply exponentially larger.

In Deutschebank’s case, its $165 billion of debt – compared to roughly $140 for Lehman before it collapsed – is dramatically understated due to its $50+ trillion of “gross notional derivatives exposure.” Let alone, its massive exposure to the PIIGS, France, and the rest of the collapsing European Union. Honestly, no one knows exactly how much Enron-like “off balance sheet” liabilities DB has. However, like Enron, Lehman, Fannie Mae, and all of the previous frauds before it, financial markets couldn’t be more “on to it.” In other words, just as was the case with early 2000s Ponzi schemes like Enron and Worldcom; and 2008’s Lehman, Fannie Mae, AIG, Bear Stearns, and others – Deutschebank’s stock, bonds, and credit default swaps are screaming imminent bankruptcy. In 2008, of course, it was screaming the same thing – but was deemed “too big to fail,” and promptly bailed out. This time around, no such salvation awaits – for Deutschebank, Alpha Bank, or hundreds, if not thousands of insolvent banks worldwide; as neither the will, nor the funds, to bail them out exists. Unless, of course, Central banks hyper-inflate; or governments “bail in”; in which, in either case, World War III will nearly certainly follow, plus civil wars, military coups, and other draconian social and government responses.

This morning, DB stock is down 4% – following yesterday’s 11% plunge – to a new all-time low. This, one day after it published an open letter to the ECB and BOJ to stop lowering rates, as it is killing their business (read: derivatives book). Which is quite telling, given that every other investment bank is practically pleading for what they erroneously believe will be “market stabilizing” rate cuts and monetizations. Moreover, as its credit default swaps have surged toward their 2008 crisis highs, not only has DB’s management – like those of Enron, Lehman, and all other Ponzis before it – put out a press release “assuring” the world of its financial stability, but sent a letter to its employees not to panic. Again, like Enron, Bear Stearns, Lehman, etc..

From my experience, all that remains of DB’s final death throes – and potentially, the entire global monetary system – are the mysteriously floated “rumors” that all’s well; followed by vicious stock rallies, which ultimately crash back to Earth, just as oil following last month’s “rumors” of Middle Eastern war and Saudi production cuts. And again, I cannot emphasize enough the contagiousness of DB’s toxic derivatives book. Which, when combined with the equally lethal balance sheets of essentially all global banks, may well set off the most devastating nuclear financial disaster of all time.