Category Archives: Finance

Federal Reserve Initiates End Game As Trump Heads To White House

 

trump-fed-ratesBy Brandon Smith

For years, alternative economic analysts have been warning that the “miraculous” rise in U.S. stock markets has been the symptom of wider central bank intervention and that this will result in dire future consequences. We have heard endless lies and rationalizations as to why this could not be so, and why the U.S. “recovery” is real.  At the beginning of 2016, the former head of the Dallas branch of the Federal Reserve crushed all the skeptics and vindicated our position in an interview with CNBC where he stated:

What the Fed did — and I was part of that group — is we front-loaded a tremendous market rally, starting in 2009.It’s sort of what I call the “reverse Wimpy factor” — give me two hamburgers today for one tomorrow. I’m not surprised that almost every index you can look at … was down significantly. [Referring to the results in the stock market after the Fed raised rates in December.]

Fisher continued his warning (though his predictions in my view are wildly conservative or deliberately muted):

…I was warning my colleagues, “Don’t go wobbly if we have a 10-20 percent correction at some point. … Everybody you talk to … has been warning that these markets are heavily priced.

Here is the issue stocks are a mostly meaningless factor when considering the economic health of a nation. Equities are a casino based on nothing but the luck of the draw when it comes to news headlines, central banker statements and algorithmic computers. Today, as Fischer openly admitted, stocks are a purely manipulated indicator representing nothing but the amount of stimulus central banks are willing to pour into them through various channels.

Even with the incredible monetary support pooled together by international financiers, returns on equities investments continue to remain mostly flat.  It would seem that the propping up of indexes like the Dow has been only for the sake of keeping up appearances. For many people, revenue is barely being generated.

Unfortunately, the majority of Americans do not care to educate themselves on the finer points of finance. Their only relation to the health of the economy is their daily glance at the Dow. If it is green, or at all-time highs, they assume that all is well, even if their gut is telling them something is not quite right.

The elites that stand at the helm of the Federal Reserve understand this dynamic very well. They are not stupid. They know that the whole of the global economy could be in a shambles but as long as stocks remain positive the masses will continue to ignore reality until the flames of destabilization are at their very doorsteps.

With this fact in mind one might think that the Fed would consider it in their best interest to keep stimulus measures operating indefinitely; but that is not what they are doing.

In fact, the Fed along with other central banks like the ECB has been slowly peeling back pillars of support from markets that have been in place since 2008-2009 and leaving the system open to a crisis event that should have been dealt with years ago. I examined this process of deliberate destabilization in my article “The Global Economic Reset Has Begun.”

In that piece I outlined the three major pillars holding up the U.S. market system and certain parts of our economy and how they were being systematically removed. The first pillar was the use of bailouts and quantitative easing measures. These were diminished through the implementation of the Fed “taper,” which I predicted would happen three months prior that year.

The second pillar was the use of near zero interest rates, which allowed numerous banks and corporations to access low-cost and no-cost overnight loans from the Fed. These companies then used these loans in large part to support a never-ending program of stock buybacks, which reduced the stock pool and artificially boosted the values of the remaining stocks.  I predicted in August of 2015 that the Fed would hike interest rates and that this would be the beginning of the end for the stock buyback bonanza. The Fed hiked rates in December of that year.

This process of removing backdoor manipulation through low interest rates should be our main concern right now. Early in 2016 I believed that the Fed would reach a position in which it would finally unleash a series of rate hikes. I did not think they would be so blatant as to wait until right after the U.S. presidential election to do so. I was wrong.

This is why I eventually predicted the launch of a series of rate hikes starting right after the election of Donald Trump in my article “World Suffers From Trump Shell Shock  Here’s What Will Happen Next.” The Fed has now once again hiked interest rates with assertions that they will be “accelerating” such hikes throughout 2017.

As I have been arguing for most of the past year, the election of Donald Trump was inevitable and would precede the triggering of the final stage of our ongoing economic crisis. I came to realize that the Fed’s timing of their latest rate hike is highly strategic. Not only does it set the stage for a series of hikes that will crush U.S. stock markets this coming year and finally shock the public out of their fiscal stupor, but it also maneuvers the crisis right into the lap of Donald Trump and the conservative movements that support him.

Beyond this, it perpetuates an increasing Left/Right division in America. Think about it  during a fiscal crisis under Trump, triggered by accumulating Fed rate hikes, liberals will immediately set upon Trump as the culprit, while conservatives will immediately defend Trump as a victim of Federal Reserve meddling.

The Federal Reserve and the mainstream media are already composing the narrative by stating that Trump’s potential economic policies and a widening budget deficit would REQUIRE higher rates at a faster pace in order to be accommodated.

I have heard arguments from some that this tactic would simply not work. That people would “never buy” a narrative in which Trump and conservatives are blamed for a market collapse that was at least eight years in the making. I have to say, this view is incredibly naive.

I understand why people would want to embrace the notion that the public is as savvy as the liberty movement when looking at economic events, but this simply isn’t reality. A large portion of the U.S. population identifies with the “Left” end of the political spectrum. We have already seen how they react in the face of a Trump election win. They are predisposed to believe that Trump is responsible for a market crash regardless of the facts. Not to mention, much of the rest of the world is economically ignorant and will likely jump on the anti-conservative bandwagon during a crisis as well.

But the real master stroke of this strategy on the part of the elites is that it creates the perfect platform for the destruction of the U.S. dollar’s world reserve status  the third and final pillar I mentioned months ago that is supporting our economic system.

Imagine that the Fed’s rate hike frenzy sparks an open feud between the central bank and Trump? Some people might say “Good! Shut the bastards down!” However, this is exactly what the elites want. With the Fed “at odds” with the president of the U.S., faith in the U.S. dollar will plummet. Its world reserve status will be destroyed. And instead of being blamed on central banks, the majority of people around the world will claim it was the fault of Trump.

With a historically sufficient excuse for the end of dollar dominance in hand, the elites can move forward with their great global reset, which includes the replacement of the dollar with the IMF’s special drawing rights as the go-to reserve currency mechanism. The SDR basket is an essential bridge in the formation of a single global monetary authority and a true single global currency.

I believe that the Fed will not only continue hiking interest rates throughout 2017, but that some of these rate hikes may be LARGER than many people expect (50 basis points or more). I believe this will be designed to foster extreme tensions between the executive branch and the central bank.

A few months ago I would have said that Trump may or “may not” be aware of this dynamic and the potential that he is a scapegoat. Now that I have seen Trump’s cabinet picks which include neo-con and Goldman Sachs alumni, I have little doubt that he is fully cognizant of the plan.  I will be writing more on the issue of Trump as a “Trojan horse” in my next article.  In the meantime I would point out that all of the elements of psychological support for stock markets will also disappear in the face of a Trump verses establishment narrative.

All those leftist media outlets cherry picking economic stats and telling half truths to support the recovery lie now have no reason to continue cheerleading for the economy. I expect that propaganda rags like Reuters and Bloomberg will quickly change their tune with Trump in the Oval Office and begin a consistent chorus of negative financial data. Not only will the Fed remove all support from the system, but the mainstream media will be pounding day traders with the kind of “doom and gloom” headlines that they have been criticizing us for over the years.

Make no mistake, the election of Trump may have some in the liberty movement ready to pack up their preps and forget about any national crisis in their lifetimes, but the truth is, vigilance is needed now more than ever. I said it before the election and I’ll say it today  do not get comfortable; the times are about to get even more interesting.

You can read more from Brandon Smith at his site Alt-Market.com. If you would like to support the publishing of articles like the one you have just read, visit our donations page here.  We greatly appreciate your patronage.

You can contact Brandon Smith at: brandon@alt-market.com

 

Federal Reserve Initiates End Game As Trump Heads To White House.

Vote as if your life depended upon it, because it does.

Here’s why:

Hillary has repeatedly said: “We should also work with the coalition and the neighbors to impose no-fly zones that will stop Assad from slaughtering civilians and the opposition from the air. Opposition forces  on the ground, with material support from the coalition, could then help create safe areas where Syrians could remain in the country, rather than fleeing toward Europe.”

This would mean that U.S. fighter-jets and missiles would be shooting down the fighter-jets and missiles of the Syrian government over Syria, and would also be shooting down those of Russia. The Syrian government invited Russia in, as its protector; the U.S. is no protector but an invader against Syria’s legitimate government, the Ba’athist government, led by Bashar al-Assad. The CIA has been trying ever since 1949 to overthrow Syria’s Ba’athist government — the only remaining non-sectarian government in the Middle East other than the current Egyptian government. The U.S. supports Jihadists who demand Sharia law, and they are trying to overthrow and replace Syria’s institutionally secular government. For the U.S. to impose a no-fly zone anywhere in Syria would mean that the U.S. would be at war against Russia over Syria’s skies.

Whichever side loses that conventional air-war would then have to choose whether to surrender, or instead to use nuclear weapons against the other side’s homeland, in order for it to avoid surrendering. That’s nuclear war between Russia and the United States.

 

Would Putin surrender? Would Hillary? Would neither? If neither does, then nuclear war will be the result.

Here are the two most extensive occasions in which Hillary has stated her position on this:

To the Council on Foreign Relations, on 19 November 2015:

      We should also work with the coalition and the neighbors to impose no-fly zones that will stop Assad from slaughtering civilians and the opposition from the air. Opposition forces on the ground, with material support from the coalition, could then help create safe areas where Syrians could remain in the country, rather than fleeing toward Europe.

      This combined approach would help enable the opposition to retake the remaining stretch of the Turkish border from ISIS, choking off its supply lines. It would also give us new leverage in the diplomatic process that Secretary Kerry is pursuing. …

      QUESTION: When you were secretary of state, you tended to agree a great deal with the then-Secretary of Defense Bob Gates. Gates was opposed to a no-fly zone in Syria; thought it was an act of war that was risky and dangerous. This seems to me the major difference right now between what the president — what Obama’s administration is doing and what you’re proposing.

      Do you not — why do you disagree with Bob Gates on this?

      CLINTON: Well, I — I believe that the no-fly zone is merited and can be implemented, again, in a coalition, not an American-only no-fly zone. I fully respect Bob and his knowledge about the difficulties of implementing a no-fly zone. But if you look at where we are right now, we have to try to clear the air of the bombing attacks that are still being carried out to a limited extent by the Syrian military, now supplemented by the Russian air force.

      And I think we have a chance to do that now. We have a no-fly zone over northern Iraq for years to protect the Kurds. And it proved to be successful, not easy — it never is — but I think now is the time for us to revisit those plans.

      I also believe, as I said in the speech, that if we begin the conversation about a no-fly zone, something that, you know, Turkey discussed with me back when I was secretary of state in 2012, it will confront a lot of our partners in the region and beyond about what they’re going to do. And it can give us leverage in the discussions that Secretary Kerry is carrying on right now.

      So I see it as both a strategic opportunity on the ground, and an opportunity for leverage in the peace negotiations. …

      QUESTION: Jim Ziren (ph), Madam Secretary. Hi. Back to the no- fly zone. are you advocating a no-fly zone over the entire country or a partial no-fly zone over an enclave where refugees might find a safe haven? And in the event of either, do you foresee see you might be potentially provoking the Russians?

      CLINTON: I am advocating the second, a no-fly zone principally over northern Syria close to the Turkish (ph) border, cutting off the supply lines, trying to provide some safe refuges for refugees so they don’t have to leave Syria, creating a safe space away from the barrel bombs and the other bombardments by the Syrians. And I would certainly expect to and hope to work with the Russians to be able to do that. [She expects Putin to join America’s bombing of Syria’s government and troops and shooting-down of Russia’s planes in Syria, but no question was raised about this.] …

      To have a swath of territory that could be a safe zone … for Syrians so they wouldn’t have to leave but also for humanitarian relief, … would give us this extra leverage that I’m looking for in the diplomatic pursuits with Russia with respect to the political outcome in Syria.

During a debate against Bernie Sanders in the Democratic primaries:

      Hillary Clinton, in a debate with Bernie on 19 December 2015, argued for her proposal that the U.S. impose in Syria a “no-fly zone” where Russians were dropping bombs on the imported jihadists who have been trying to overthrow and replace Assad: “I am advocating the no-fly zone both because I think it would help us on the ground to protect Syrians; I’m also advocating it because I think it gives us some leverage in our conversations with Russia.” She said there that allowing the jihadists to overthrow Assad “would help us on the ground to protect Syrians,” somehow; and, also, that, somehow, shooting down Russia’s planes in Syria (the “no-fly zone”) “gives us some leverage in our conversations with Russia.”

      Bernie Sanders’s response to that was: “I worry too much that Secretary Clinton is too much into regime change and a little bit too aggressive without knowing what the unintended consequences might be.” He didn’t mention nuclear war as one of them.

The “no-fly zone” policy is one of three policies she supports that would likely produce nuclear war; she supports all of them, not merely the “no-fly zone.”

Hillary Clinton has never been asked “What would you do if Russia refuses to stop its flights in Syria?” Donald Trump has said nothing about the proposal for a no-fly zone (other than “I want to sit back and see what happens”), because most Americans support that idea, and he’s not bright enough to take her on about it and ask her that question. Probably, if he were supportive of it, he’d have said so — in which case it wouldn’t still be an issue in this election. Trump muffed his chance — which he has had on several occasions. But clearly he, unlike her, has not committed himself on this matter.

Hillary Clinton is obviously convinced that the U.S. would win a nuclear war against Russia. The question for voters is whether they’re willing to bet their lives that she is correct about that, and that even if the U.S. ‘wins’, only Russia and not also the U.S. (and the world) would be destroyed if the U.S. nuclear-attacks Russia.

Every other issue in this election pales by comparison to the no-fly-zone issue, which is virtually ignored, in favor of issues that are trivial by comparison. But a vote for Hillary Clinton is a vote for nuclear war against Russia, regardless of whether or not the voters know this. And a vote for Trump is a vote for the unknown. Could the unknown be even worse than Hillary Clinton? If so, would it be so only in relatively trivial ways?

This election should be about Hillary Clinton, not about Donald Trump.

—————

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

 

Vote as if your life depended upon it, because it does..

WikiLeaks: Hillary Clinton knew Saudi, Qatar were funding ISIS – but still took their money for Foundation

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21st Century Wire says…

This could be the biggest revelation yet from WikiLeaks already epic email trove. Will the US media cover this story?

Last night, in an RT Exclusive interview conducted by award-winning filmmaker John Pilger, WikiLeaks editor and founder Julian Assange described what he believes is “the most significant email in the whole collection.”

WikiLeaks reveals an early 2014 email where the outgoing Secretary of State Hillary Clinton was urging John Podesta, then advisor to President Barack Obama, to “bring pressure” on Gulf states Saudi Arabia and Qatar, “which are providing clandestine financial and logistic support to ISIL [Islamic State, IS, ISIS] and other radical Sunni groups.”

This constitutes proof that the Clinton Foundation knowingly accepting millions of dollars in ‘charitable’ donations from the same Gulf states which both Secretary Clinton and President Obama knew were funding ISIS, Al Nusra Front (al Qaeda in Syria) and known takfiri terrorist fighting organizations.

In addition, the Clinton’s Foundation took money from a number of other gulf monarchies:

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(Infographic: Conservative Post)

This latest news validates what 21WIRE has been saying since the ‘ISIS crisis’ began in June 2014.

According to FOX News, FBI sources have said that ‘indictments are likely’ for the Clinton Foundation investigation. One only wonders how this latest Assange revelation will factor into the wider investigation – as it goes right to the heart of the national security and foreign policy – two things which Clinton trades heavily on in her campaigning.

Assange went on to explain the deep ramifications of this latest criminal allegation against Clinton and her family foundation:

“All serious analysts know, and even the US government has agreed, that some Saudi figures have been supporting ISIS and funding ISIS, but the dodge has always been that it is some “rogue” princes using their oil money to do whatever they like, but actually the government disapproves. But that email says that it is the government of Saudi Arabia, and the government of Qatar that have been funding ISIS.”

During their 25-minute interview filmed at the Ecuadorian Embassy in London, Assange and Pilger discussed the obvious conflict of interest between Clinton as Secretary of State, the Clinton Foundation and Gulf monarchies who financed them. The following is an excerpt from the interview transcript:

John Pilger: The Saudis, the Qataris, the Moroccans, the Bahrainis, particularly the first two, are giving all this money to the Clinton Foundation, while Hillary Clinton is secretary of state, and the State Department is approving massive arms sales, particularly Saudi Arabia.

Julian Assange: Under Hillary Clinton – and the Clinton emails reveal a significant discussion of it – the biggest-ever arms deal in the world was made with Saudi Arabia: more than $80 billion. During her tenure, the total arms exports from the US doubled in dollar value.

JP: Of course, the consequence of that is that this notorious jihadist group, called ISIL or ISIS, is created largely with money from people who are giving money to the Clinton Foundation?

JA: Yes.

Watch a brief preview of the interview here:

The interview will air in full on RT International this Saturday Nov 5th.

READ MORE CLINTON NEWS AT: 21st Century Wire Clinton Files

SUPPORT 21WIRE – SUBSCRIBE & BECOME A MEMBER @21WIRE.TV

 

WikiLeaks: Hillary Clinton knew Saudi, Qatar were funding ISIS – but still took their money for Foundation.

The Failure of Democracy: How The Oligarchs Plan To “Steal The Election”

The Failure of Democracy: How The Oligarchs Plan To “Steal The Election”

 

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I am now convinced that the Oligarchy that rules America intends to steal the presidential election. In the past, the oligarchs have not cared which candidate won as the oligarchs owned both. But they do not own Trump.

Most likely you are unaware of what Trump is telling people as the media does not report it.

Video of Trump Statements regarding the Oligarchs

A person who speaks like this is not endeared to the oligarchs.

https://www.youtube.com/watch?v=EYozWHBIf8g&app=desktop

Who are the oligarchs?

—Wall Street and the mega-banks too big to fail and their agent the Federal Reserve, a federal agency that put 5 banks ahead of millions of troubled American homeowners who the federal reserve allowed to be flushed down the toilet. In order to save the mega-banks’ balance sheets from their irresponsible behavior, the Fed has denied retirees any interest income on their savings for eight years, forcing the elderly to draw down their savings, leaving their heirs, who have been displaced from employment by corporate jobs offshoring, penniless.

—The military/security complex which has spent trillions of our taxpayer dollars on 15 years of gratuitous wars based entirely on lies in order to enrich themselves and their power.

—The neoconservartives whose crazed ideology of US world hegemony thrusts the American people into military conflict with Russia and China.

—The US global corporations that sent American jobs to China and India and elsewhere in order to enrich the One Percent with higher profits from lower labor costs.

—Agribusiness (Monsanto et.al.), corporations that poison the soil, the water, the oceans, and our food with their GMOs, hebicides, pesticides, and chemical fertilizers, while killing the bees that pollinate the crops.

—The extractive industries—energy, mining, fracking, and timber—that maximize their profits by destroying the environment and the water supply.

—The Israel Lobby that controls US Middle East policy and is committing genocide against the Palestinians just as the US committed genocide against native Americans. Israel is using the US to eliminate sovereign countries that stand in Israell’s way.

What convinces me that the Oligarchy intends to steal the election is the vast difference between the presstitutes’ reporting and the facts on the ground.

According to the presstitutes, Hillary is so far ahead that there is no point in Trump supporters bothering to vote. Hillary has won the election before the vote. Hillary has been declared a 93% sure winner.

I am yet to see one Hillary yard sign, but Trump signs are everywhere. Reports I receive are that Hillary’s public appearances are unattended but Trumps are so heavily attended that people have to be turned away. This is a report from a woman in Florida:

“Trump has pulled huge numbers all over FL while campaigning here this week. I only see Trump signs and stickers in my wide travels. I dined at a Mexican restaurant last night. Two women my age sitting behind me were talking about how they had tried to see Trump when he came to Tallahassee. They left work early, arriving at the venue at 4:00 for a 6:00 rally. The place was already over capacity so they were turned away. It turned out that there were so many people there by 2:00 that the doors had to be opened to them. The women said that the crowds present were a mix of races and ages.”

I know the person who gave me this report and have no doubt whatsoever as to its veracity.

I also receive from readers similiar reports from around the country.

This is how the theft of the election is supposed to work:

The media concentrated in a few corporate hands has gone all out to convince not only Americans but also the world, that Donald Trump is such an unacceptable candidate that he has lost the election before the vote.

By controllng the explanation, when the election is stolen those who challenge the stolen election are without a foundation in the media. All media reports will say that it was a run away victory for Hillary over the misogynist immigrant-hating Trump.

And liberal, progressive opinion will be relieved and off guard as Hillary takes us into nuclear war.

That the Oligarchy intends to steal the election from the American people is verified by the officially reported behavior of the voting machines in early voting in Texas. The NPR presstitutes have declared that Hillary is such a favorite that even Republican Texas is up for grabs in the election.

If this is the case, why was it necessary for the voting machines to be programmed to change Trump votes to Hillary votes? Those voters who noted that they voted Trump but were recorded Hillary complained. The election officials, claiming a glitch (which only went one way), changed to paper ballots. But who will count them? No “glitches” caused Hillary votes to go to Trump, only Trump votes to go to Hillary.

The most brilliant movie of our time was The Matrix. This movie captured the life of Americans manipulated by a false reality, only in the real America there is insufficient awareness and no Neo, except possibly Donald Trump, to challenge the system. Americans of all stripes—academics, scholars, journalists, Republicans, Democrats, right-wing, left-wing, US Representatives, US Senators, Presidents, corporate moguls and brainwashed Americans and foreigners—live in a false reality.

In the United States today a critical presidential election is in process in which not a single important issue is addressed by Hillary and the presstitutes. This is total failure. Democracy, once the hope of the world, has totally failed in the United States of America. Trump is correct. The American people must restore the accountability of government to the people.

Dr. Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. Roberts’ latest books are The Failure of Laissez Faire Capitalism and Economic Dissolution of the West, How America Was Lost, and The Neoconservative Threat to World Order.

The Failure of Democracy: How The Oligarchs Plan To “Steal The Election” | Global Research – Centre for Research on Globalization.

Run on Banks Begins — Deutsche Bank Clients Begin Withdrawing Excess Cash

 

deutsche-bankBy Matt Agorist

As the Free Thought Project reported Thursday, 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. This risk of failure has now gotten so threatening that a number of funds that clear derivatives trades with Deutsche Bank AG have withdrawn excess cash and positions held at the lender, according to Bloomberg.

While the vast majority of the bank’s more than 200 derivatives-clearing clients have made no changes, the hedge funds run on cash highlights serious concern. The paranoia of an imminent collapse spread to the US on Thursday as 10 hedge funds that are Deutsche Bank clients have decided to withdraw cash and listed derivatives positions from the bank, according to a Bloomberg News report.

Millennium Partners, Capula Investment Management and Rokos Capital Management are among about 10 hedge funds that have cut their exposure, said a person familiar with the situation who declined to be identified talking about confidential client matters.

The hedge funds use Deutsche Bank to clear their listed derivatives transactions because they are not members of clearinghouses. Millennium, Capula and Rokos declined to comment when contacted by phone or e-mail.

These funds use Deutsche Bank’s prime brokerage to clear their derivatives trades, reports Bloomberg. They post collateral as a sort of insurance in case they run into trouble — but now they appear to worry that Deutsche Bank is the one in trouble. So they are withdrawing some of their derivatives holdings and excess collateral above what Deutsche Bank requires them to hold.

As Zero Hedge points out, this massive withdrawal of cash has led to a sharp increase in short-term CDS.

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“Our trading clients are amongst the world’s most sophisticated investors,” Michael Golden, a spokesman for Deutsche Bank, said in an e-mailed statement.

“We are confident that the vast majority of them have a full understanding of our stable financial position, the current macroeconomic environment, the litigation process in the U.S. and the progress we are making with our strategy.”

But this is simply not true. Deutsche Bank is anything but stable as their shares have fallen sharply on the news that German Chancellor Angela Merkel won’t bail them out. Its shares fell 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.

As news of the bank run spread on Thursday, the ‘stable’ bank’s shares declined below 10 euros for the first time. The lender’s 1.75 billion euros ($2 billion) of 6 percent additional Tier 1 bonds, the first notes to take losses in a crisis, fell as much as five cents on the euro to 69 cents, a record low, according to data compiled by Bloomberg.

“The issue here is now one of confidence,” said Chris Wheeler, a financial analyst with Atlantic Equities LLP in London. “That’s what’s going on here. The thinking is ‘Deutsche Bank is fine, but there’s a slim chance it might not be, so why leave my money in there?’”

The possibility of depositors having their funds taken from them as the bank collapses is not at all isolated as it has happened before. As we pointed out, to keep the bank solvent, the Bank of Cyprus took almost 40% of depositors’ funds – leaving customers with essentially nothing they could do about having their money stolen. Assets were frozen and ATM machines were not refilled.

As Jay Syrmopoulos points out, the collapse of Deutsche Bank would most likely begin a cascade of Western banking institutions falling like dominoes (which could include Barclays in London and CitiGroup in the U.S.). According to same expert who valued Lehman’s worth at its collapse, Deutsche Bank’s current value of $1 trillion dollars is significantly more than Lehman Brothers’ valuation during their collapse in 2008.

The graphic below shows the severity of the impact and implications for contagion a Deutsche Bank implosion would have.

screen-shot-2016-09-29-at-10-36-42-amIn fact, the contagion has already begun. News that some hedge funds were pulling positions and excess collateral from Deutsche Bank caused shares of U.S. banks to quickly reverse early gains, according to Bloomberg.

capture91But don’t worry, just as Lehman Brothers maintained in the beginning of 2008 that everything was fine and dandy, Deutsche Bank is doing the same.

In a memo to staff published on Friday, as reported by Bloomberg, Deutsche Bank Chief Executive Officer John Cryan responded to what he called media speculation causing some “unjustified concerns,” saying that the bank’s balance sheet has never been more stable over the past two decades.

“Ongoing rumors are causing significant swings in our stock price,” he wrote. “It’s our task now to prevent distorted perception from further interrupting our daily business. Trust is the foundation of banking. Some forces in the markets are currently trying to damage this trust.”

However, even the IMF has called their bluff, noting that “Deutsche Bank appears to be the most important net contributor to systemic risks.”

Matt Agorist is the co-founder of TheFreeThoughtProject.com, where this article first appeared. He is an honorably discharged veteran of the USMC and former intelligence operator directly tasked by the NSA. This prior experience gives him unique insight into the world of government corruption and the American police state. Agorist has been an independent journalist for over a decade and has been featured on mainstream networks around the world. . and now on Steemit

 

Run on Banks Begins — Deutsche Bank Clients Begin Withdrawing Excess Cash.

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