How much clearer can I be that we are already amidst the “Big One” – with NO CHANCE of turning back? And that, barring a global PPT miracle in the next 24 hours, the answer to the question I posed on Saturday – i.e., “will Wednesday be the long-awaited Yellen Reversal?” – is decidedly YES! Not that she’ll join the ECB and BOJ at negative interest rates at tomorrow’s Humphrey-Hawkins Congressional testimony, of course. No, that will come shortly thereafter; perhaps, at an “emergency” session – in the coming months (or weeks), depending on how successful said PPT efforts are. As, per what I have shouted from the rooftops for the past three weeks, I do not believe there’s a chance the world survives 2016 without a catastrophic financial event. As if what’s occurred already isn’t catastrophic enough!
Frankly, I could have just as easily titled today’s article “Bank of Japan on the verge of taking down the entire global monetary system.” Or replaced Bank of Japan with ECB. Or, contrary to what the entire mainstream will conclude regarding the ramifications of a potential Fed rate cut, the Federal Reserve itself. As frankly, there aren’t words for the incredulity I’m experiencing watching the Bank of Japan and ECB not only dismally fail in their recent NIRP and QE pronouncements – but catalyzing the polar opposite effect of the “stability” they sought. Which is exactly what occurred when the PBOC attempted a “controlled” Yuan devaluation last summer – which I presciently forecast would be the “cataclysmic financial big bang to end all big bangs.” Not to mention, when the Fed attempted to promote “confidence” by raising rates – which I also knew would be a disaster, per September’s “only financial event as potentially cataclysmic as a significant Yuan devaluation.”
In Japan’s case, the Nikkei has been in freefall since the BOJ announced NIRP two weeks ago – with last night’s 5.4% plunge, led by the terrifyingly ominous implosion of Japan’s insolvent banking sector, making a mockery of yesterday’s afternoon’s blatant U.S. PPT “hail mary” rally. Which, I might add, still resulted in dramatic losses. Moreover, demonstrating how everything Central banks attempt now fail, the Yen has surged against the dollar; as has the Euro, as the “big three” currencies hopelessly fight the unwinnable “final currency war.” To that end, I maintain my staunch belief that the “Land of the Setting Sun” will be the first “first world” nation to experience 21st century hyperinflation; and that the “European Union” – and Euro currency as currently constituted – won’t last through the decade.
That said, Japan is but a pimple on the arse of Europe, in terms of the cataclysmic impact of its burgeoning political, economic, and social collapse. Heck, I could write an entire article on GREECE, based on the horrifying events occurring today alone. Which, as I predicted last summer, likely won’t make it through to the middle of this year without a catastrophic default of a significant portion of its €600 billion of debt; the large majority of which, is owed to Europe. To wit, the Greek stock market is down 12% in the past 24 hours alone; whilst its sovereign yields are exploding – ECB QE and all; with strikes and riots are taking place as we speak.
That sad, the credit default swap rates for Greece’s largest, soon-to-be-dead bank aren’t much higher than Deutsche Bank. I.e., Europe’s largest bank; the world’s largest derivatives purveyor; and the largest financial institution in the nation holding together the collapsing European Union via smoke and mirrors. Yes, the land of exploding migrancy crisis; Volkswagen “Diesel-Gate”; and an imploding political regime – in which 40% of the population is calling for Angela Merkel’s resignation; and the words revolution, anarchy, and crisis are becoming eerily commonplace.
Since the ECB engaged in NIRP two years ago – and QE last winter – things have gone from bad to worse in the Eurozone. As we speak, the entire continent is enveloped in the early stages of a financial crisis that will be MUCH worse than anything experienced in 1929, 1987, 2000, and 2008 combined. Bank stocks are down more than 25% this year alone; credit risk – via high yield bonds and credit default swaps – are in many cases already at 2008 financial crisis levels. In other words, “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 Deutsche Bank’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 – Deutsche Bank’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 Deutsche Bank, 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.
Again, I don’t know exactly how things will play out – nor does anyone else. However, the way I see it, Deutsche Bank is at the top of the list of potential catalysts to permanently end financial markets as we know them. And with them, the ability to protect yourself from the inevitable – perhaps imminent – destruction of history’s largest, broadest fiat Ponzi scheme.
P.S. I’ll be writing about this in more detail shortly, but please give Miles Franklin a call, at 800-822-8080, about the recently announced Canadian Royal Mint “Roaring Grizzly” .99999 fine gold coin”; and the first of its four-coin silver “Predator” series, the Cougar.