Europe’s Biggest Bank Dares To Ask: Is The FedRes Preparing For A “Controlled Demolition” Of The Market

• For all those who thinks that the FedRes will never raise interest rates because it will collapse the world economy and financial system: I don’t think so. They forget history: the 1929 – 1933 Great Depression was caused by the FedRes. A “calculated ‘shearing’ of the public” as Curtis Dall puts it above. The next FOMC meeting is on 16-17 Sep 2015. There is every possibility that they will raise rates. Friendly advice, once again: Got physical gold/silver yet?
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• Remember the Hegelian Dialectic: they create the Problem and then ride in pretending to be saviors with their pre-planned Solution! The Illuminist (ie. Satanic) Order Out of Chaos philosophy.
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• Europe’s Biggest Bank Dares To Ask: Is The Fed Preparing For A “Controlled Demolition” Of The Market
  by Tyler Durden, www.zerohedge.com  
  … But it was the conclusion to Deutsche’s stream of consciousness that is the real shocker: in it DB’s Dominic Konstam implicitly ask out loud whether what comes next for global capital markets (most equity, but probably rates as well), is nothing short of a controlled demolition. A premeditated controlled demolition, and facilitated by the Fed’s actions or rather lack thereof: 
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  The more sinister undercurrent is that as the relationship between negative rates has tightened with weaker liquidity since the crisis, there is a sense that policy is being priced to “fail” rather than succeed. Real rates fall when central banks back away from stimulus presumably because they “think” they have done enough and the (global) economy is on a healing trajectory. This could be viewed as a damning indictment of policy and is not unrelated to other structural factors that make policy less effective than it would be otherwise – including the self evident break in bank multipliers due to new regulations and capital requirements.
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  What would happen then? Well, DB casually tosses an S&P trading a “half its value”, but more importantly, also remarks that what we have also said from day one, namely that “helicopter money” in whatever fiscal stimulus form it takes (even if it is in the purest literal one) is the only remaining outcome after a 50% crash in the S&P:
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  Of course our definition of “failure” may also be a little zealous. After all why should equities always rise in value? Why should debt holders be expected to afford their debt burden? There are plenty of alternative viable equilibria with SPX half its value, longevity liabilities in default and debt deflation in abundance. In those equilibria traditional QE ceases to work and the only road back to what we think is the current desired equilibrium is via true helicopter money via fiscal stimulus where there are no independent central banks. 
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  And there it is: Deutsche Bank saying, in not so many words, what Ray Dalio hinted at, namely that the Fed’s tightening would be the mechanistic precursor to a market crash and thus, QE4.
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  Only Deutsche takes the answer to its rhetorical question if the Fed is preparing for a “controlled demolition” of risk assets one step forward: realizing that at this point more QE will be self-defeating, the only remaining recourse to avoid what may be another systemic catastrophe would be the one both Friedman and Bernanke hinted at many years ago: the literal paradropping of money to preserve the fiat system for just a few more days (At this point we urge rereading footnote 18 in Ben Bernanke’s “Deflation: Making Sure “It” Doesn’t Happen Here” speech)
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  While we can only note that the gravity of the above admission by Europe’s largest bank can not be exaggerated – for “very serious banks” to say this, something epic must be just over the horizon – we should add: if Deutsche Bank (with its €55 trillion in derivatives) is right and if the Fed refuses to change its posture, exposure to any asset which has counterparty risk and/or whose value is a function of faith in central banks, should be effectively wound down.
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