- ITM Trading
Slides and Links: https://www.itmtrading.com/blog/deuts…
Many people have been asking if Deutsche Bank (BD) has declared bankruptcy. Today, the formal answer is no, but a 94% price decline in the stock and the ongoing and growing losses, tell us YES. But, as a global universal bank, the death of DB is the death of the global financial system, so what we have is a Zombie Bank Walking. Therefore, the real question is “What would force a formal bankruptcy?” The answer is the same as it was for Lehman in 2008, loss of funding. When does that happen? When it becomes too expensive to prop up.
Central banks, who have used low interest rates to keep the other zombie banks and corporations appearing alive. But negative rates and bloated balance sheets mean that central banks have minimal fire power left to fight the escalating global slowdown. Would they squander it on Deutsche Bank? Would it be left to the German Central Bank? In 2017 Germany managed to repatriate their gold. The headlines asked if they know something we don’t. They do. Germany remembers the hyperinflation that gripped it between 1919 and 1923. They know that once hyperinflation begins there is no stopping it. And they know that only gold holds value when that happens. Like me, they’d rather be early than one second too late.
Other video to watch: How Deutsche Bank & High Risk Bets Can Cause the Collapse. https://youtu.be/TzOyVp_nLEE