Perspectives on the global economic changes

panduranghari · Post by **panduranghari** » 16 Sep 2015 11:59

RoyG wrote:
Haha, custodian...That's a good one. Why didn't they just comply with the German request? They do "own" it.

Roy G,
TS Jones is correct. Fed does not own the gold. They are mere custodians.

RoyG · Post by **RoyG** » 16 Sep 2015 12:10

Gold does have industrial applications and it has a history of being valued. The point is, Euro can't fill the void as the reserve currency simply because it is experiencing high volatility which will continue to worsen over time. The world needs a common denominator for international trade which is stable. The GCC along with the entire world depends on it, especially since there is no chance that the US will reform its entitlement programs and continues to export its inflation.

RoyG · Post by **RoyG** » 16 Sep 2015 12:11

panduranghari wrote:
RoyG wrote:
Haha, custodian...That's a good one. Why didn't they just comply with the German request? They do "own" it.
Roy G,
TS Jones is correct. Fed does not own the gold. They are mere custodians.

Custodians who can't give it back. What's the difference?

TSJones · Post by **TSJones** » 16 Sep 2015 12:38

85 tons of gold were sent to Germany in 2014 from New York according to the germans.

TSJones · Post by **TSJones** » 16 Sep 2015 12:40

RoyG wrote:Gold does have industrial applications and it has a history of being valued. The point is, Euro can't fill the void as the reserve currency simply because it is experiencing high volatility which will continue to worsen over time. The world needs a common denominator for international trade which is stable. The GCC along with the entire world depends on it, especially since there is no chance that the US will reform its entitlement programs and continues to export its inflation.

what inflation are you refering to?

Altair · Post by **Altair** » 16 Sep 2015 13:50

TSJones wrote:
RoyG wrote:Gold does have industrial applications and it has a history of being valued. The point is, Euro can't fill the void as the reserve currency simply because it is experiencing high volatility which will continue to worsen over time. The world needs a common denominator for international trade which is stable. The GCC along with the entire world depends on it, especially since there is no chance that the US will reform its entitlement programs and continues to export its inflation.
what inflation are you refering to?

The common Inflation which everyone refers to concerning US is its appetite for need to print dollars so that world can pay for it's arrogant spending. Russia and China are done with it and India will soon be out of this petro dollar bs. Even if ONLY Russia,China and India have a common denominator currency it can be self-sustainable for atleast 20% of transactions between us.

panduranghari · Post by **panduranghari** » 16 Sep 2015 14:15

Altair ji,
Dont blame USA for exporting inflation. The world demanded it and US obliged. They benefitted of course. But that is the exact problem.

The Triffin dilemma or paradox is the conflict of economic interests that arises between short-term domestic and long-term international objectives for countries whose currencies serve as global reserve currencies. This dilemma was first identified in the 1960s by Belgian-American economist Robert Triffin, who pointed out that the country whose currency, being the global reserve currency, foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfill world demand for these foreign exchange reserves, thus leading to a trade deficit.

The use of a national currency, such as the U.S. dollar, as global reserve currency leads to tension between its national and global monetary policy. This is reflected in fundamental imbalances in the balance of payments, specifically the current account, as some goals require an outflow of dollars from the United States, while others require an overall inflow.

Specifically, the Triffin dilemma is usually cited to articulate the problems with the role of the U.S. dollar as the reserve currency under the Bretton Woods system.

TSJones · Post by **TSJones** » 16 Sep 2015 16:28

Altair wrote:
TSJones wrote:
what inflation are you refering to?
The common Inflation which everyone refers to concerning US is its appetite for need to print dollars so that world can pay for it's arrogant spending. Russia and China are done with it and India will soon be out of this petro dollar bs. Even if ONLY Russia,China and India have a common denominator currency it can be self-sustainable for atleast 20% of transactions between us.

an assertion with no facts provided.

given the past history of Chinese currency just in the last few months, your assertion is even more incorrect. the Chinese will do everything in their power to maintain their export edge. a currency that they cannot devalue in order to maintain that edge is fantasy currency and will not happen.

India is very good customer of China and it will probably stay that way if China has any maneuvering room.

India's trade deficit with China rose to $37.8 billion in 2014

http://articles.economictimes.indiatime ... de-deficit

the Chinese can't do that on any kind of currency gold standard and therefore they WON'T have one.

and neither will India.

India had a trade surplus of over $23 billion with the US in 2014.

https://www.census.gov/foreign-trade/balance/c5330.html

KrishnaK · Post by **KrishnaK** » 16 Sep 2015 22:19

Then there's issues like financial markets. Look at the size of the US financial markets relative to others. If China's done, why does China not dump the USD it gets from trading with the US for anything else it considers acceptable. It chooses to invest in dollar denominated US Treasuries instead. Not to mention Japan. US Treasury holdings by country. US financial markets remain the most liquid and deep. A very important point for investors wishing to park very large sums of money. A lot of wishful thinking gets posted on this thread. Endlessly.

RoyG · Post by **RoyG** » 16 Sep 2015 23:05

TSJones wrote:85 tons of gold were sent to Germany in 2014 from New York according to the germans.

Haha, and how much do they supposedly have there? Why is the US dragging its feet? It's been a struggle to get it back. Venezuela, Netherlands, Germany, India, China, Russia, etc are all filling their coffers. Surely it's not just "tradition".

Oh and btw, you still haven't answered my question regarding M3 figures or Fort Knox gold.

No comment as far as your love for the glorious Euro. I think it's pretty obvious where its headed.

Point is, if the gold is so useless to the financial system why pay the storage costs. Just empty your vaults and let us have it.

RoyG · Post by **RoyG** » 16 Sep 2015 23:10

TSJones wrote:
RoyG wrote:Gold does have industrial applications and it has a history of being valued. The point is, Euro can't fill the void as the reserve currency simply because it is experiencing high volatility which will continue to worsen over time. The world needs a common denominator for international trade which is stable. The GCC along with the entire world depends on it, especially since there is no chance that the US will reform its entitlement programs and continues to export its inflation.
what inflation are you refering to?

Simple, we buy your treasuries and you give us cash to buy commodities like oil which help us industrialize. You print more, it lowers the value of our stock and we devalue our currency to export to you to earn more cash. This then gets kicked up to the RBI to start the cycle all over again.

RoyG · Post by **RoyG** » 16 Sep 2015 23:14

panduranghari wrote:Altair ji,
Dont blame USA for exporting inflation. The world demanded it and US obliged. They benefitted of course. But that is the exact problem.

The Triffin dilemma or paradox is the conflict of economic interests that arises between short-term domestic and long-term international objectives for countries whose currencies serve as global reserve currencies. This dilemma was first identified in the 1960s by Belgian-American economist Robert Triffin, who pointed out that the country whose currency, being the global reserve currency, foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfill world demand for these foreign exchange reserves, thus leading to a trade deficit.

The use of a national currency, such as the U.S. dollar, as global reserve currency leads to tension between its national and global monetary policy. This is reflected in fundamental imbalances in the balance of payments, specifically the current account, as some goals require an outflow of dollars from the United States, while others require an overall inflow.

Specifically, the Triffin dilemma is usually cited to articulate the problems with the role of the U.S. dollar as the reserve currency under the Bretton Woods system.

The world demanded it, but not forever. Nor did they expect it to be tied with oil from the GCC and the US militarism that came with it. The US is out of control and they are being taught a lesson. There is a reason why dollar reserves are dropping slowly world wide.

When the roti is too hot, nibble around the edges.

KrishnaK · Post by **KrishnaK** » 17 Sep 2015 00:18

RoyG wrote: Simple, we buy your treasuries and you give us cash to buy commodities like oil which help us industrialize. You print more, it lowers the value of our stock and we devalue our currency to export to you to earn more cash. This then gets kicked up to the RBI to start the cycle all over again.

When you buy treasuries, you give cash. You don't get it. You can buy oil in any currency that's liquid enough. The dollar is, so it can be swapped at prevailing exchange rates. You're very free to export to Japan, EU, the UK, all of which are strong currencies or even other economies who are willing to buy in any currency you deem acceptable. Apparently there are quite some of those make believe countries around, like China, Russia and Brazil.

RoyG · Post by **RoyG** » 17 Sep 2015 03:52

When you buy treasuries, you give cash. You don't get it. You can buy oil in any currency that's liquid enough. The dollar is, so it can be swapped at prevailing exchange rates. You're very free to export to Japan, EU, the UK, all of which are strong currencies or even other economies who are willing to buy in any currency you deem acceptable. Apparently there are quite some of those make believe countries around, like China, Russia and Brazil.

You don't get it. It's called a maturity date. Feel free to google it at your convenience.

As far as the purchase of oil is concerned, there are very few countries which can get away with exporting in other currencies because they have adequate military infra to keep the US away. Iran and Russia are the only two that I can think of that have opened their own bourse. The NYMEX/IPE rules the roost. It's as simple as that.

panduranghari · Post by **panduranghari** » 17 Sep 2015 11:55

KrishnaK wrote:Then there's issues like financial markets. Look at the size of the US financial markets relative to others. If China's done, why does China not dump the USD it gets from trading with the US for anything else it considers acceptable. It chooses to invest in dollar denominated US Treasuries instead. Not to mention Japan. US Treasury holdings by country. US financial markets remain the most liquid and deep. A very important point for investors wishing to park very large sums of money. A lot of wishful thinking gets posted on this thread. Endlessly.

I doubt you understand what monetarism is.

panduranghari · Post by **panduranghari** » 17 Sep 2015 11:57

RoyG wrote: The world demanded it, but not forever. Nor did they expect it to be tied with oil from the GCC and the US militarism that came with it. The US is out of control and they are being taught a lesson. There is a reason why dollar reserves are dropping slowly world wide.

When the roti is too hot, nibble around the edges.

OK. Lets wait and watch what plays out. The world did not want it to begin with but we have it right now. Dont we? I do not understand your angst against the current system. What exactly do you not like about the current monetary system? And how do you think it could be improved?

panduranghari · Post by **panduranghari** » 17 Sep 2015 12:00

KrishnaK wrote: When you buy treasuries, you give cash. You don't get it. You can buy oil in any currency that's liquid enough. The dollar is, so it can be swapped at prevailing exchange rates. You're very free to export to Japan, EU, the UK, all of which are strong currencies or even other economies who are willing to buy in any currency you deem acceptable. Apparently there are quite some of those make believe countries around, like China, Russia and Brazil.

WOAH! Japan does not have a strong economy. The Japanese government owes the BOJ over 1 quadrallion yen in debt.

The UK has not got any strong economy. The Government owes BOE over 2 trillion pounds in debt.

What measure are you using to decide a country has strong or weak economy? Debt to GDP ratio is one. On that parameter, UK and Japan are basket cases.

TSJones · Post by **TSJones** » 17 Sep 2015 12:37

RoyG wrote:
Simple, we buy your treasuries and you give us cash to buy commodities like oil which help us industrialize. You print more, it lowers the value of our stock and we devalue our currency to export to you to earn more cash. This then gets kicked up to the RBI to start the cycle all over again.

the US is not responsible for India's inflation in any way, shape or form. It is up to India to determine how much currency to print. we don't tell India how much gold to buy either although you certainly buy all you want. get after it!

TSJones · Post by **TSJones** » 17 Sep 2015 12:41

RoyG wrote:
When you buy treasuries, you give cash. You don't get it. You can buy oil in any currency that's liquid enough. The dollar is, so it can be swapped at prevailing exchange rates. You're very free to export to Japan, EU, the UK, all of which are strong currencies or even other economies who are willing to buy in any currency you deem acceptable. Apparently there are quite some of those make believe countries around, like China, Russia and Brazil.
You don't get it. It's called a maturity date. Feel free to google it at your convenience.

As far as the purchase of oil is concerned, there are very few countries which can get away with exporting in other currencies because they have adequate military infra to keep the US away. Iran and Russia are the only two that I can think of that have opened their own bourse. The NYMEX/IPE rules the roost. It's as simple as that.

Iran and Russia?

sterling examples of market economics you give!

Austin · Post by **Austin** » 18 Sep 2015 17:02

David Stockman Interview On Yahoo——The Fed Painted Itself Into A Corner, Confidence In The Casino Is Headed For A Fall

KrishnaK · Post by **KrishnaK** » 18 Sep 2015 23:13

RoyG wrote:You don't get it. It's called a maturity date. Feel free to google it at your convenience.

Oh ok. Not sure what this has to do with anything you're talking about though

As far as the purchase of oil is concerned, there are very few countries which can get away with exporting in other currencies because they have adequate military infra to keep the US away. Iran and Russia are the only two that I can think of that have opened their own bourse. The NYMEX/IPE rules the roost. It's as simple as that.

First, just because countries price it, or have to as you imagine it to be, in dollars doesn't mean the purchaser has to stock dollars. The purchaser can just stock any other currency that they feel is safe in terms of value and liquidity and swap it out for the USD just before the purchase. Let's leave the claim that Iran has adequate military infra to keep the US away. That NYMEX/IPE rules that roost doesn't prove or disprove anything. The US also has the largest financial markets. Hardly any surprise that a lot of that money chases commodities too.

KrishnaK · Post by **KrishnaK** » 18 Sep 2015 23:20

panduranghari wrote:
KrishnaK wrote: When you buy treasuries, you give cash. You don't get it. You can buy oil in any currency that's liquid enough. The dollar is, so it can be swapped at prevailing exchange rates. You're very free to export to Japan, EU, the UK, all of which are strong currencies or even other economies who are willing to buy in any currency you deem acceptable. Apparently there are quite some of those make believe countries around, like China, Russia and Brazil.
WOAH! Japan does not have a strong economy. The Japanese government owes the BOJ over 1 quadrallion yen in debt.

The UK has not got any strong economy. The Government owes BOE over 2 trillion pounds in debt.

What measure are you using to decide a country has strong or weak economy? Debt to GDP ratio is one. On that parameter, UK and Japan are basket cases.

I said strong currencies. Any that a country feels is safe enough, on whatever measure it deems to evaluate safety. For one, if the currency is liquid enough, you can trade it for the USD to purchase oil. If it's a better store of value that the USD even better. The reason countries don't is there's no better alternative to the USD today. If and when there is, they'll move.

Austin · Post by **Austin** » 19 Sep 2015 11:16

Peter Schiff Talks about Student loan in US

Austin · Post by **Austin** » 19 Sep 2015 11:17

^^^ from the video didnt knew Peter Schiff Dad was in Prison now detected with Lung Cancer and not much days in hand

https://en.wikipedia.org/wiki/Irwin_Schiff

Yellen Admits Rates Could Stay at Zero Forever

https://www.youtube.com/watch?v=gi1v8AvZY4k

Suraj · Post by **Suraj** » 19 Sep 2015 12:05

Never mind 0%, analysts parsed her statements to suggest the Fed may even resort to negative interest rates if necessary. Yes, you pay the bank to hold your money there. Of course, those existing 'fees' banks impose are a form of negative rates, but the Fed could just formalize it as a rate.

TSJones · Post by **TSJones** » 19 Sep 2015 12:41

Suraj wrote:Never mind 0%, analysts parsed her statements to suggest the Fed may even resort to negative interest rates if necessary. Yes, you pay the bank to hold your money there. Of course, those existing 'fees' banks impose are a form of negative rates, but the Fed could just formalize it as a rate.

ultimately, that would be in the realm of one particular body politic: the US House of Representatives. the decision would border on the US Gold Act of 1934.

Yes, Janet Yellen must answer to them.

if Neshant thought too much economic power was wrapped in a single all knowing person, then he's gonna love a bunch of die hard, gerrymandering, Rethuglicans that currently control the House.

you see, the thrust is to get people to stop using currency and use bank services in order that criminal activity can be monitored and arrested and underground market activity can be taxed. so will people be charged to keep their money in a bank, other than the fees that are currently implemented?

Answer: not very likely unless there will be levels based on income.

Austin · Post by **Austin** » 21 Sep 2015 11:28

BRICS Bank, others result of failure of IMF reform, US acknowledges

Austin · Post by **Austin** » 22 Sep 2015 16:23

David Stockman-Debt Markets Unstable and Tottering

https://www.youtube.com/watch?v=KBFuUC3iZXE

panduranghari · Post by **panduranghari** » 22 Sep 2015 22:43

Though it wont play out exactly as it did in Rome or in France, it is a good framework to understand how hyperinflations play out.

http://bigfaithministries.com/hyperinfl ... evolution/

http://mshistory.k12.ms.us/articles/70/ ... -1718-1720

Of course, the perennial favourite of doomsters the world over is When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany

I like how David Stockman describes the problem -

What they don’t say is that we’ve arrived at this extraordinary point in history — when helicopter money, negative interest rates and the elimination of physical cash are suddenly mainstream ideas — by following the advice of these guys’ intellectual predecessors.

Their argument, as far back as the 1990s if not the 1970s, has been that it makes no sense for government to allow markets to clear the detritus of bad decisions. Instead, we should just borrow what it takes to satisfy all “needs” and print what it takes to pay the resulting interest. People will buy lots of stuff, “growth” will eliminate all imbalances, both moral and financial, and the system will chug along in equilibrium.

Liking the way that sounded, the developed world broke the link with gold in 1971, started borrowing heavily in the 1980s and bailed out everyone in sight in the 90s and 00s. And here we are, with debts so massive that growth under traditional policy options is impossible.

And right on cue, here comes a new batch of monetary theorists explaining to the ignorant masses that governments just aren’t being bold enough in their borrowing and money printing — and that with just a few little tweaks to our notions of personal freedom (the war on cash) and common sense (greatly expanded government borrowing on top of record debt loads), our problems will vanish.

panduranghari · Post by **panduranghari** » 23 Sep 2015 18:14

For those in US, try using www.bitgold.com

panduranghari · Post by **panduranghari** » 23 Sep 2015 18:27

47 TONS of Indian gold in BOE vaults.

TSJones · Post by **TSJones** » 23 Sep 2015 23:02

that's about $1.5 billion at today's prices.

not that much compared to a total of $18 billion in RBI's gold reserves.

https://www.rbi.org.in/scripts/WSSView.aspx?Id=20094

and definitely not much compared to $328 billion in foreign currency assets.

JE Menon · Post by **JE Menon** » 24 Sep 2015 10:03

Is part of that what we had to transfer in 1991, the inflexion point for the changes since? Would be a nice marker for what has happened in the years since then.

panduranghari · Post by **panduranghari** » 24 Sep 2015 12:28

Or it could be Loco gold? Dont know. Or it could be the gold we bought from IMF. But then we did buy 100 tons in 2011. So just 53 missing from there which must be in RBI vault in Nagpur perhaps?

http://forums.bharat-rakshak.com/viewto ... 0#p1698680

On page 134 of this document, the Venn Diagram indicates BOE stores gold for 72 of the world central banks as a custodian. Not specified which countries do that however.

More digging indicates, the plan for NaMo govt. is to eliminate the 80-20 rule. The rule for those unaware is out of 100% gold imported, 80 can be kept within India while 20 has to be compulsorily exported.

It explains why the government is doing this loco swap.

To understand a loco swap, here is an example from the Perth Mint website;
I am substituting perth mint for RBI

The RBI records loco swap trades as linked buy and sell trades. For example, a mining companying swapping its RBI gold for London gold would be entered as (assuming a gold price of $1000 and a loco RBI discount of $1.00):

Trade Number 1 2
RBI is Buying Selling
Metal Gold Gold
Currency USD USD
Price $1000.00 $1001.00
Ounces 100.000 100.000
Loco Mumbai London
Trade Value $100,000.00 100,100.00

While there are two separate trades, on settlement the USD trade values are netted against each other and the mining company pays the RBI $100.00. The metal values however are settled independently as they are for different locos - the RBI would deposit 100oz into the mining company's London metal account and withdraw 100oz from its metal account with the RBI.

panduranghari · Post by **panduranghari** » 25 Sep 2015 11:12

John Maynard Keynes in 1941. Photo: Bettmann/CORBIS

By
Richard Hurowitz

Sept. 20, 2015 6:37 p.m. ET
As the Federal Reserve continues to struggle with when to place its foot ever so slightly on the brakes of a historic monetary expansion, I’m reminded of Richard Nixon’s words in 1971 when closing the gold window in the face of a run on the dollar. Of this dramatic repudiation of gold as a monetary metal Nixon famously declared, “I am now a Keynesian,” more often misquoted as “We are all Keynesians now.”

British economist John Maynard Keynes probably would have been horrified by this attribution. Nixon’s announcement was, after all, a coup de grâce delivered to Bretton Woods, the international monetary system of which Keynes was a principal architect. More important, he would never have thought desirable a world where currencies are backed by nothing more than a governmental promise to pay while the printing presses whirled unchecked.

Policy makers today wrap themselves in the legitimizing mantle of Keynes in much the way many politicians claim the legacy of Ronald Reagan. But while the idea of increased government spending to counteract the business cycle hails directly from Keynes, he would have considered quantitative easing’s frenzied asset buying beyond the pale and been puzzled that his theories are associated with aggressive currency debasement and a rabid hostility to gold.

Keynes’s supposed antagonism toward bullion arises from a misunderstanding of his famous statement in 1924 that the “gold standard is already a barbarous relic.” Many take this pithy remark to mean Keynes wanted to discard gold entirely from the international monetary framework. However, Keynes was actually against the economic pain often caused by the strict gold-standard system that had governed international monetary exchange for two centuries leading up to World War I. That regime did an excellent job of maintaining price stability, but its automatic mechanism for correcting economic imbalances through domestic deflation and unemployment spikes flew in the face of Keynes’s vision for smoothing out booms and busts.

But for Keynes, gold itself—and the importance of sound money—was a different story. So was exchange-rate stability, which went out the window between the world wars as the major powers used competitive “beggar-thy-neighbor” devaluations that wreaked havoc on global trade and prosperity. Germany and France suffered currency collapses, Britain catastrophically overvalued sterling, and Franklin Roosevelt set the gold price of the dollar each morning from his bed, on at least one occasion based on his lucky number. The result was disastrous.

Keynes outlined his ideal postwar monetary system in December 1941, and his ideas bore fruit at the international conference in Bretton Woods, N.H., in 1944. He envisioned a system where exchange rates were fixed against each other (and gold), and the international community would deal with imbalances through a new clearing union. Only in extreme cases would there be a managed devaluation. Keynes also envisioned a common world currency he called bancor—literally “bank gold”—which would also be fixed against bullion and all other currencies and used to settle governmental balances.

Keynes and his contemporaries recognized that gold has been valued as a monetary metal for millennia in virtually every human civilization, and its universal appeal was why he wanted it as part of his system. “We do not take any action injurious to the position of gold,” he assured European allies in a speech in 1943 to rally support for his plan. “The world being what it is, it is likely the confidence gold gives can still play a useful part.”

Keynes understood that sound money and stable exchange rates were necessary conditions for world prosperity and peace. Contrary to popular belief, he believed that in most cases currency devaluations were counterproductive, their benefits often outweighed by increased domestic costs and the undermining of sovereign credit. “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency,” Keynes observed in 1919. He consistently argued that a sound currency was critical to a functioning free economy. He understood that such a currency would ultimately create much greater wealth than the endless and vicious cycle of improvisational debasement we see playing out globally today.

Were Keynes alive today, he would likely be arguing along with German Chancellor Angela Merkel for more monetary discipline and a return to a more balanced international system. No doubt, however, his neo-Keynesian acolytes would be dismissing his concerns as hopelessly outdated and reactionary.

Keynes was an economic theorist, but he was also a clear-eyed market analyst, and a passionate and committed speculator for his own account and for Cambridge University. If he took in today’s economic vista of near-zero interest rates and quantitative easing, it is clear that he would be buying gold hand over fist—regardless of what his disciples might think.

Mr. Hurowitz is an investor and the publisher of the Octavian Report.

http://www.wsj.com/article_email/what-k ... 8-73133529

Austin · Post by **Austin** » 26 Sep 2015 10:44

3 Ways to Measure Sovereign Debt

Austin · Post by **Austin** » 26 Sep 2015 15:35

Nice Speech usual Peter Schiff

Austin · Post by **Austin** » 27 Sep 2015 10:22

US Supports Renminbi Reserve Currency Bid as China Progresses on Reform

panduranghari · Post by **panduranghari** » 28 Sep 2015 17:05

If Deutsche Bank Goes Under It Will be Lehman Times Five!

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.

The big immediate threat for Deutsche Bank though has to do with their problems in hiding debt for the Sovereign nations applying for the Eurozone. For example, Greece and Italy couldn’t have their debt ratios over certain levels, so what Deutsche Bank did was they turned nice big chunks of Sovereign debt into currency swaps.
For an example of how this works: Suppose you have a $250,000 bad business loan that is stinking up your credit report. So you call up your favorite Deutsche banker (or Goldman or Morgan- pick your criminal enterprise that is your personal favorite) and you tell him, look I have a $250,000 debt here and I want to make it go away. They say OK, we can do something clever here. We can pay off your debt so your credit report looks good, and we can establish this $250,000 Euro swap, and we’ll keep it off the books!

So you have this $250,000 bad loan stinking up your books, it goes away, and is replaced by something hidden- a euro currency swap! That’s precisely what was done on a larger macro scale by Greece and Italy- and Deutsche Bank is involved with several of these, and the total that is becoming disclosed is $400 Billion. Apply your typical ratios and you can conclude that they are $10, $15, $20 billion short for capital requirements!

The big banks are so criminal that they have converted fraud and criminal activity into a small cost of doing business!

panduranghari · Post by **panduranghari** » 28 Sep 2015 17:13

Meanwhile, those who listened to our reco to buy Glencore CDS at 170 bps in March 2014 can take the rest of the year off. As of this moment, GLEN Credit Default Swap were pushing on 600 bps, 4 times wider, and on pace to take out the 2011 liquidity crunch highs.

The end game has well and truly begun. Buy whatever gold you can. You wont get it this cheap ever again in your lifespan.