Deutsche Bank
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Published 10-01-16
25 Minute Video
John Rubino and Gordon T Long discuss the unfolding mayhem in the European
banking sector and specifically what is behind the panic selling in Deutsche
Bank stock.
Deutsche Bank - .... then all of a sudden!
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Gordon T Long outlines:
"We have seen this coming for some time and is why in the spring
we issued a feature report entitled "Is Deutsche Bank EU's (Lehman + Bear
Stearns + Enron)**2? " We were pointing out that the Leverage at Lehman
Bros, the Bond Portfolio's at Bear Stearns and the Derivatives at Enron which
brought these corporations down, pales in comparison to Deutsche bank which
sits on all three of these potential Tipping Points which can cause lost
investor confidence and a bank run.
John Rubino says:
"We can stop watching the Italian Banks and start watching the
German Banks. Counter-Intuitively the most rock solid banks, in the most rock
solid country in Europe have become the biggest systemic risk in the global
economy! Part of the reason is the German Banks have been doing in effect
something called "Vendor Financing"!
"GERMANY IS ON THE HOOK FOR ITALY, SPAIN / PORTUGAL AND GREECE.
WHICH MEANS THE PERIPHERAL COUNTRIES IN THE EUROZONE WHICH CAN'T FUNCTION AS
CURRENTLY CONFIGURED ARE A MAJOR RISK FOR DEUTSCHE BANK".... It
is becoming increasingly evident the peripherals can't pay back their debts!
People are beginning to understand that the pillars of all this debt may
soon blow up!
What is looking like another European banking crisis could quickly become
a currency crisis as it is likely to impair the Euro. This is even a bigger
global issue as it would likely spill over into the bond market.
IMF Warning: "Central Banks Losing the Deflation Fight"
Since the derivatives book of Deutsche Bank is bigger than the entire
Eurozone economy it additionally means that deflationary pressures are going
to cause major disruptions at some point when the underlying loans begin to
default and debt rollover gets harder to secure.
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IMF
warns central banks could lose deflation fight
"It is clear what they do next, proposals are now coming out of
the woodwork from the easy money, Keynesian side of the spectrum which
involves massive increases in money creation and government fiscal
spending."
Why are Food Prices Suddenly Falling?
Grocery prices have fallen for nine straight months and might possibly be
a canary in the coal mine.
"Ultra easy money and ultra aggressive fiscal policy hasn't worked
and given us a 'rip roaring" inflationary boom that Keynesian economists
say you should get from negative interest rates and trillion dollar per year
government deficits. So if it hasn't worked yet and were already seeing
growing pockets rollover into deflation than threat is catastrophic for an
over leveraged society!"
When you owe huge amounts of money you want your currency to go down in
value so you can pay off your debts in a less valuable currency. That is what
the world's policy makers want.
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Prices
Are Plunging - Bloomberg
What is Happening is We are Creating Conditions Whereby We are in a
Trap We Can Never Get Out if Inflation Fails to Materialize. Debt Will Become
too Large and Expensive to Roll Over if We Fall into a Deflationary
Environment"
... there is much, much more in this 25 minute video discussion.