Deutsche Bank is the financial system’s “Hurt Locker” – Investment Research Dynamics/Kranzler Research
It’s been well documented that the $/yen has been the “lever” by which the Federal Reserve and the U.S. Treasury ( via its Working Group on Financial Markets) has been manipulating the stock market higher and keeping a cap on the price of gold. Craig Hemke of TFMetalsReport.com has done a brilliant job documenting and commenting on this dynamic: It’s All About The Yen. I would recommend looking at his archives to see the historical context of his work.
The yen has been depreciating vs the dollar at a rapid rate since October 2012. Not coincidentally the SPX embarked on a nearly uninterrupted upward move that took it from 1099 in early October to its all time high of 2130 in May 2015. The directional correlation between the USD/YEN and the SPX was highly conspicuous, if not an outright signal of official market market intervention.
Starting in early August, however, the $/yen began to break down technically, as the yen began to appreciate vs. the dollar – primarily in big “waterfall” chunks. Not coincidentally, the SPX began to “tip over” at about the same time. Yesterday the $/yen plunged briefly below the key 110 level, closing at 109.78.
Today (Wed, April 7th) the dollar crashed another 1.4% the yen. For clarification, a 1% move in a currency is considered to be a huge move. As you can see from the 1yr $/yen graph to the left, the $USD has depreciated in value quite rapidly vs. the yen. There has not been any event-specific news that would be causing the rapid depreciation of the dollar vs. the yen. In fact, the current narrative from the Fed, White House and media is that the U.S economy is doing well and the Fed intends to hike interest rates at twice in 2016. Conversely, Japan’s economy is contracting and Bank of Japan continues to flood the system with liquidity. If anything, the dollar should be rapidly appreciating vs. the yen.
The only conclusion we can draw from this is that something has blown up in the global financial system which caused unpredictable instability in – and loss of control over – the Fed’s manipulation mechanisms.
I believe the likely culprit is Deutsche Bank. As I have commented on several times previously, Deutsche Bank’s balance sheet is a ticking financial nuclear time bomb. It’s the financial system’s “Hurt Locker.” Since March 11, Deutsche Bank stock is down 25% despite the inexorable move higher by the S&P 500. DB is down 9% in four trading days this week. Despite the Fed’s attempts to monetize DB’s derivatives (I will document in another blog post), DB’s stock is telling us that DB’s financial condition is melting down.
This is likely the reason that gold has been a stellar performer for the past three weeks despite the general expectation that the bullion banks were in a position to smash the precious metals once again. But every attempted downward manipulative hit has been met with aggressive buying. What makes the trading action in gold all the more remarkable is the fact that India’s gold importing activities have ground to halt since the country’s jewelers went on strike March 1st.
This is an unmistakable message from the market that something potentially devastating has occurred behind the western Central Banking “curtain.”
And of course the cartel will keep playing bullshit poker since they have no other options but to bluff ’cause the real gold is done gone.
There has to be massive waves of public sector people retiring Dave. I think a lot of them would have to know there is no way the paper money system is gonna sustain their ridiculus pbenefit packages…I reckon the first wave of “getting into gold” has begun…could be wrong but…Now we just need the next wave of billionaires to realise 0000’s on a balance sheet may not mean purchasing power…
M. Armstrong has a couple blog posts on his web site today that indicate the Italian banks are in really really bad shape…
@Dave – Has there been any outcome yet, of the Police raid on DB some time ago??
Cuz i have a feeling it was a raid to cover up all the mess in DB’s derivatives under the pretext of an investergation that ofcourse is gonna turn out in favour of DB and show the probably was the victum if everything comes crashing down.
In the meantime certain dokuments from the raid will never see the light of day again in the name of national security.
No sure. Maybe that raid seized the documents which led to Anshu Jain being sacked
Puerto Rico Bonds Crash After “Moratorium” Raises Default Risk;
“As The NY Times reports, Gov. Alejandro García Padilla of Puerto Rico on Wednesday signed a bill that would allow him to declare a state of emergency and give him authority to halt payments on the island’s crushing $72 billion debt”
Any ideas on what precisely might be causing the meltdown at Deutsche?
I know we can say ‘derivatives’ or ‘loan losses’, but can you guess at anything more specific – such as oil derivatives gone sour, being on the wrong side of the Swiss Franc when it revalued, an exposure to Monte Paschi di Siena. Anything like that?
Deutsche is, like HSBC and J.P. Morgan, one of the mega institutions that the western Deep State uses to implement its policies and programmes. Its being in trouble is an immensely big deal.
Part of what horrifies and infuriates me, is that every day that the (US and EU and Japanese) Central Banks keep this zombie ponzi scheme alive, is yet another day in which everyone who owns REAL wealth (including tangible gold or silver) are having our wealth’s natural values and potential profits stolen from us.
I mean, WHEN the re-set of asset values comes, then we who possess physical gold and silver will receive SOME justice…
…BUT we’ll never receive TOTAL justice, because through the illegal suppressions of our assets’ values over the past few years, we will have lost what we rightfully, logically OUGHT to have been able to earn in interest! What the central bankers have been doing to decent, old fashioned savers of money, has been simply THEFT!
And that’s why I hate the bloody corrupt moneychangers as much as Jesus did. What Jesus – a Jew, and the true KING OF THE JEWS! – said to THEM, applies a thousandfold to the likes of Loyd Blankfein (of whom the Jewish John the Baptist would say: “Do not tell me you are sons of Abraham! God can turn these STONES into sons of Abraham!”:
They are literally destroyers…..while the average asshole is dobbing his neihgbors in for fencing violations tree branches…it will continue. What i love about the whole Trump dialogue is finally white, black, indian, chinese, mexican…you name it are saying hmmm do you think these parasites might be playing us? That is how it looks to me…
Usury/corruption=wrath of God. Time’s about up for the rentiers…
What the *^#@ happened to Eric Sprott’s “physical” silver ETF PSLV today? Silver spot price had a nice jump. But Eric Sprott made announcement of issuance of tons of new shares, corresponding to purchase of tons & tons of physical silver. In response, his PSLV ticker tanked by more than 3%, the explanation being given that existing PSLV ETF holders got diluted. Such a severe tanking is pretty bizarre to watch, considering how well the “fake paper” spot price for silver is doing.
Basically, Eric Sprott intends to purchase about 155 tons of new physical silver. Prior to his announcement, his ETF had been trading at premium to NAV. As a result of the dilution, ALL of that premium got wiped out & then some. It totally sucks for existing holders to have their premium to be wiped out so drastically due to the dilution…..Which works totally differently, compared to what typically happens when a stock splits or merges.
PSLV sold off on the misconception this was a dilutive secondary offering when in fact no new shares enter the aftermarket until after Sprott takes delivery of the silver. The trust can only offer new shares when it is trading at a substantial premium (about 5.5% at the time). Remember closed end funds can trade at a ridiculous premium or discount to NAV. This is a great time to buy PSLV as the premium to NAV is about breakeven with this price correction.
Yes, I had some locked in 2 physical gold funds – Eric Sprott’s PHYS & Axel Merk’s OUNZ. I sold off both of them & purchased PSLV with it on Friday due to the slam-down.
How do we know Japan is printing as they claim? I know the yen has gained strength – I took advantage of its weakness this past fall and travelled there. But how do we know they’re doing what they claimed?
Also, does anyone think we’ll get another 9/11 false flag here in the US to blame the next market crash on? I wish I could “invest” in that!