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Thread: The Banks

  1. #1
    In Memory Fredkc's Avatar
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    The Banks

    Over on the Brexit thread I mentioned the financial condition of the EuroZone banks - the elephant in the room.

    The Brexit vote hits the EU in two ways:
    1. At a time when the EU needs to consolidate power, those crazy Brits... "Gasp! They said 'No!' They are leaving?" It's pretty hard to run rough shod over a whole bunch of governments, used to being "sovereign", when one votes with its hat. It puts it on & leaves. An important one, too. Because...

    2. Monetarily, the big three, in the EU are Germany, France, & the UK. And for things financial, this is Bad timing, too. While not necessary the "deciders", being the three largest in wealth, and banking capacity, they are the ones who decide what's offered as "possible".

    Remember what the EU went through concerning Greece? Well, they didn't "solve" Greece's problem, they just papered over it, and got them to keep quiet for awhile. Nothings fixed. Well, Italy is about to become the "next Greece". Same problem. And... Spain is right behind them.

    So Brexit made the EU look weak, politically. And when financial types, saw that, and looked down the road at what troubles are coming money-wise, they got real long faced.

    First story I saw on their reaction was this one:
    World's Biggest Asset Manager Downgrades European Banks To Sell, Expects Global Slowdown
    by Tyler Durden
    Jul 6, 2016 9:43 AM

    He said:
    Blackrock also notes that since "there’s limited scope for monetary policy to reflate the global economy, however, and much-needed fiscal stimulus and structural reform progress looks unlikely over the coming months" it has in response "downgraded European stocks to underweight, with a negative view of the Eurozone banking sector."
    The important word here is :Sell".

    Who is BlackRock? Well, they're the biggest Mutual fund/Investment handlers in the world. And what they did was mark down their estimation of the big banks in the EU, to "Sell status". It's the polite way of saying, "Run like hell!"

    To explain why, heres what they said on a front page article, on their site:
    None of the Big Four countries will be in a position to push forward a pan-European growth and reform agenda over the coming 15 months.

    So it will be urgent that newly elected or comforted governments change gear and implement deep reforms, both nationally and at the European level. Specifically, we are looking for completion of the single market for services, product market reform, labor market liberalization and completion of fiscal and banking union.

    Nice that they said they want to see, "governments change gear and implement deep reforms", but don't get excited, yet. Because they also said what needs to happen is, "we are looking for completion of the single market for services, product market reform, labor market liberalization and completion of fiscal and banking union."

    What they're looking for is an increase in the EU's central power, all of the member countries, to fall in line with the kind of banking, labor, and market reforms that nearly every country's people don't want.

    Greece didn't. Italy & Spain won't either, and the UK just said, "Screw you! We're outa here!".

    So, the biggest investment firm in the world looked at all of this, including the state of their individual, and collective financial positions, and said, "Run like hell!"

    The banks, who are supposed to be the bedrock of all this activity, are broke. They have built a house of cards called the Derivatives market, and they're in it so deep it defies belief.

    Lemme go collect some more stuff, and come back.
    Fred
    Last edited by Fredkc; 07-08-2016 at 02:17 PM.
    "Life IS mystical! Its just that we're used to it." - Wolf, the movie
    "Dad, if God is everywhere then, when he's in a piece of paper, is he squished?" - My daughter, age 7

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    Adam Bomm (07-08-2016),Jenci (07-08-2016),Ross (07-08-2016)

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    Senior Member Adam Bomm's Avatar
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    Re: The Banls

    Hey Mr. Fred,

    Off topic but it seems (always has) that some of the older threads disappear from the main page too quickly. e.g. I wanted to respond to your post about the 911 vaults but it disappeared and i'm just too lazy to go looking for it. By the way, the smilies don't seem to be working is that my browser or a site problem.

    thanks

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    Senior Member Jenci's Avatar
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    Re: The Banls

    Soros bets 100 million Euros on the fall of Deutsche bank.
    http://www.express.co.uk/news/world/...erendum-Brexit

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    Ross (07-08-2016)

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    Re: The Banls

    Quote Originally Posted by Adam Bomm View Post
    By the way, the smilies don't seem to be working is that my browser or a site problem.
    Seems to be a software prob within the site...no biggie and will get to it.

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    Re: The Banls

    Quote Originally Posted by Jenci View Post
    Soros bets 100 million Euros on the fall of Deutsche bank.
    Lo and behold. Yesterday was big news of a sort. Not the kind the MSM talks about, but...

    Duetsche Bank is now refusing to redeem for gold.

    Deutsche Boerse Responds
    To Deutsche Bank's Failure To Deliver Physical Gold
    by Tyler Durden
    Sep 1, 2016 4:54 PM
    In the latest stunning development involving a documented failure of a bank
    to deliver physical gold when demanded, yesterday we reported that according to
    German website godmode-trader.de, a client of the Xetra-Gold Exchange-Traded
    Commodity was told the fund's designated sponsor, Deutsche Bank, would be
    unable to deliver the requested gold.


    This was contrary to the explict reps and warranties made explicitly in the Xetra-
    Gold's prospectus, which said that investors are entitled to the delivery of
    the certified amount of physical gold at any time, and proudly added that "since
    the introduction of Xetra-Gold in 2007, investors have exercised this right 900 times,
    with a total of 4.5 tons of gold delivered."

    As the German article concluded: anyone who wants to easily convert their
    Xetra-Gold holdings into physical gold - at least for clients of Deutsche Bank
    - can do so only by selling their shares, and then buying gold coins or bars
    directly elsewhere. Which leads the author to the logical question:

    what is the worth of the Xetra-Gold service, which certifies the right to redeem
    physical gold, if said delivery is no longer possible? In other words, what was
    supposedly an ETC which promised physical delivery upon demand,
    is nothing more than yet another "paper only" play.

    We asked another, more nuanced question: is the inability to deliver physical gold
    an issue with Xetra-Gold, or with the company's "designated sponsor", Deutsche
    Bank, and if the latter is suddenly unable to satisfy even the smallest of delivery
    requests by retail clients, just how pervasive is the global physical gold shortage?

    And, as we learned last night, it does appear that if the delivery is requested at
    a Deutsche Bank branch, the answer is no.

    But this is where it gets even worse. As Baron adds, in a telephone conversation
    with the author, the Deutsche Boerse Commodities exchange was unwilling to
    supply further information to Godmode traders whether physical delivery
    is generally feasible at most bank branches or not.

    And worst of all,
    "the exchange was unable to name any bank which is in
    a position to deliver physical gold without problems."


    Baron's conclusion: "the "right" for actual delivery at Xetra-Gold is theoretical:
    physical delivery is only possible if the respective bank branch also cooperates.
    Suspicious gold investors should consider Xetra-Gold as another form of paper gold
    and not as a physical gold investment."

    Our take is slightly different: while we already know that physical delivery
    at Deutsche Bank appears to have been compromised, according to
    the Deutsche Boerse response, the ability of any and every other bank
    in Germany to deliver gold is now likewise questionable.

    Which begs the question: where is all the physical gold?

    http://www.marketwatch.com/story/why...old-2016-08-01
    LONDON (MarketWatch) — The good news for gold enthusiasts is that China and Russia, the world’s No. 1 and No. 3 producers, are catching up to the big industrial countries in stocks of bullion in their official reserves.

    The bad news is that, on present “steady-as-she goes” monthly gold accruals, it will take China and Russia — No. 6 and 7 in the world ranking of global gold reserves — about six years to draw level with the fourth- and fifth-placed countries, France and Italy.

    Beijing and Moscow are building up gold stocks for a variety of reasons, ranging from unease about undue dependence on the dollar, particularly acute in Russia’s case, in view of U.S.-led sanctions over the invasion of Crimea, to distaste at the low or negative returns on Europe currency holdings, especially the euro.

    Moreover, China’s state-owned ICBC Standard Bank, ranked the world’s biggest bank by assets, has agreed to buy Barclays’ metals-storage business, including its modern facility in London —signalling China’s interest in becoming not just a trader in gold but a third-party depository for other official and private holders.

    Also from MArketWatch:
    May 25, 2016 - China is the world's largest miner and importer of gold. So, it only makes sense that it wants to have more influence over the precious metal's price. In the past, the world's daily gold prices have been set in London, but China recently launched a new yuan-based benchmark for gold bullion.
    __________________________________________________ _____

    No, China, & Russia's buying didn't make gold scarce. They're not buying at that level yet.

    But here are a couple of reasons why they're doing it:
    1. Their joint venture aimed at replacing the IMF will require the added gold reserve.
    2. They're doing this because they're now certain some form of bank collapse, in the west, is imminent. They're hedging their bets.

    Actually, it accomplishes both goals. Kinda like chicken soup... "couldn't hurt".
    "Life IS mystical! Its just that we're used to it." - Wolf, the movie
    "Dad, if God is everywhere then, when he's in a piece of paper, is he squished?" - My daughter, age 7

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