by Jay Syrmopoulos
29 September 2016
from TheLastAmericanVagabond Website
 

Berlin, Germany

The most prominent bank in Germany is at risk of failure, with potentially profound effects for the EU, the United States and likely the rest of the world.

Deutsche Bank shares have fallen sharply on the news that German Chancellor Angela Merkel won't bail-out the struggling bank, with shares falling by as much as six percent in early Monday trading, making it the worst performance since 1992.

Since January, the bank's shares have lost over 52 percent of their value.

Merkel also refused to provide financial assistance to Deutsche Bank in its legal battle with the U.S. Department of Justice.

The chancellor made her position clear during talks with Deutsche CEO John Cryan, according to Focus magazine. The German-based lender may be fined up to $14 billion over its mortgage-backed securities business before the 2008 global crisis.

The German Chancellor also noted that Deutsche Bank will not be getting a bailout from the European Central Bank - the lender of last resort for European banks.

So could Germany be considering a bail-in instead of a bail-out?

According to Investopedia:

A bail-in is rescuing a financial institution on the brink of failure by making its creditors and depositors take a loss on their holdings.

 

A bail-in is the opposite of a bail-out, which involves the rescue of a financial institution by external parties, typically governments using taxpayers money.

 

Typically, bail-outs have been far more common than bail-ins, but in recent years after massive bail-outs some governments now require the investors and depositors in the bank to take a loss before taxpayers.

So the question becomes:

are millions of Germans about to see their savings stolen by the government to prop up Deutsche Bank?

It's not at all beyond the realm of possibility, as it has happened before in very recent history.

To keep the bank solvent, the Bank of Cyprus took almost 40% of depositor's funds - leaving customers with essentially nothing they could do about having their money stolen. Assets were frozen and ATM machines were not refilled.

Perhaps this explains why in mid-August Germans were told by their government to stockpile 10 days worth of water, and 5 days worth of food in case of a "national emergency" hitting the country.

Deutsche Bank's unbelievably risky portfolio and it's exposure to the derivative markets, which stands at over $40 trillion dollars, would undoubtedly cause exponentially more damage than the Lehman Brothers collapse did back in 2008, which precipitated the Great Recession of 2008.

The collapse of Deutsche Bank would most likely begin a cascade of Western banking institutions falling like dominos, which could include,

• Barclays in London

• CitiGroup in the U.S.

According to same expert who valued Lehman's worth at it's collapse, Deutsche Bank's current value of $1 trillion dollars is significantly more than Lehman Brothers valuation during their collapse in 2008.

The contagion from a collapse of this magnitude could potentially trigger a systemic banking collapse the likes of which the Western world has never seen. The EU would almost certainly disintegrate upon a failure of this magnitude.

Revealing the truly dangerous threat the German megabank poses, a report from the International Monetary Fund in June implied that Deutsche Bank was a threat to the global financial system.

Of all the world's big banks, the IMF said,

"Deutsche Bank appears to be the most important net contributor to systemic risks."

Add to that the fact that international financiers Jacob Rothschild and George Soros have both, over the past few months, advised investors to get out of the investment market and advocated for gold investments - and it becomes very clear that this collapse has been on the horizon for sometime.

When Jacob Rothschild says that he is buying gold because the central banks are out of control, you begin to understand the scope and magnitude of what is transpiring, as his family has been in de facto control of the world's central banks for centuries.

In his semi-annual address to shareholders of RIT Capital Partners, Jacob Rothschild, announced that they are reducing stock market and currency exposure and increasing their gold holdings, warning that the world is now in "uncharted waters" and that the consequences are "impossible" to predict.

Rothschild stated:

"The six months under review have seen central bankers continuing what is surely the greatest experiment in monetary policy in the history of the world.

We are therefore in uncharted waters and it is impossible to predict the unintended consequences of very low interest rates, with some 30% of global government debt at negative yields, combined with quantitative easing on a massive scale."

But here's the rub, it's not impossible to predict at all - there's going to be a gigantic global crash.

When the government warnings start, you can be assured that it's already too late, as the availability of supplies in the case of emergency would be severely constrained after a warning due to the large number of people attempting to procure an extremely limited amount of supplies.

To a much lesser degree, these types of events have happened in both Greece and Venezuela recently, and it's highly possible that we're about to watch history repeat itself on a much larger scale if Deutsche Bank fails.

Will Germany become the powder keg that implodes the global economy? Only time will tell...

What is certain is that an ounce of prevention, ahead of any potential collapse, is the most viable solution for those looking to safeguard themselves and their families. The key is to stock up on food, water and other necessities in advance of the actual crisis fully manifesting.

A minimal amount of effort put into preparing early for the side effects of a major economic disaster could be the difference between surviving the crisis or not for your family...