Is This Why Germany Repatriated 583 Tons Of Gold?

Authord by Tom Lewis via,

Before declaring bankruptcy, Lehman Bros. had $639 billion in assets. It was thought to be too big to fail. Currently, Deutsche Bank has almost triple those assets, $1.7 trillion, but its future is in question. The bank’s net income plummeted by 80 percent from its 2017 level. The Federal Reserve has labeled Deutsche Bank’s US operation as troubled. And that might be an understatement.

The growing problems at Deutsche Bank, combined with unprecedented global debts, could spell economic and financial chaos. Deutsche Bank is only one of the major banks in trouble. Others are nipping at its heels.

Mismanagement has plagued Deutsche Bank’s U.S. operations for years. The Federal Reserve criticized it in 2014 for inaccurate reporting and regulatory violations. In 2015, 2016, and 2017, the Federal Reserve demanded corrections, but Deutsche Bank did not comply.

When Deutsche Bank’s stocks crashed, S&P downgraded the bank from A- to BBB+, a rating not far from junk. One of the problems cited by S&P was unstable and shifting leadership and generally poor performance.

Deutsche Bank is far from acknowledging any problems. Its new CEO Sewing spoke to his staff after the rating downgrade and reassured them of the bank’s inherent strength and future strategies. Following this speech, Deutsche Bank was forced to report a drop in revenues of 5 percent, and a decrease in income of 79 percent. Could Sewing have been a tad optimistic?

Its losses for 2017 were reported at 497 million euros, compared to the 290 million euros predicted by Reuters analysts. If Deutsche Bank is to survive, significant changes will have to be implemented. And so far, it’s not even acknowledging it has a problem.

While Deutsche Bank appears to be following in the footsteps of Lehman Bros., a comparison to Fannie Mae or Freddie Mac may be more accurate. So far, the German government has denied any plans to bail out trouble Deutsche Bank, but this is likely change. Germany’s largest bank is more critical to its economy than Fannie Mae and Freddie Mac were to the US. In addition, the German government would acquire Deutsche Bank’s assets at a fraction of their value. It is doubtful that Chancellor Merkel will be able to resist such temptation. Besides, allowing Deutsche Bank to fail could have catastrophic consequences for Germany and a bad effect on the global economy.

With a possible financial crisis looming, Germany has shown a renewed interest in gold. Gold has historically been the most reliable hedge against inflation, and Germany’s central bank, the Bundesbank, has repatriated583 tonnes, or $31 billion worth, of gold recently, years ahead of schedule.

Deutsche Bank is not the only European bank with overvalued assets. If Deutsche Bank continues its path to a destructive downfall, other banks will be affected. That is the reason gold is looking like an excellent investment against any future financial ripple effect.

Deutsche Bank is suffering from a lack of faith for a reason. Gold could put investors’ minds at ease.


BaBaBouy Fri, 06/22/2018 - 09:21 Permalink

Bring Back The Phyz GOLD...

MeanWhile Back At The (Fiats) Ranch ~

""As stated last week, though EFP use between Bullion Banks in New York and London has grown over the past several years, the ongoing spike in use has caught our attention. At the current run rate, total volume of COMEX contracts "exchanged for physical" in London looks to exceed 8,500 metric tonnes for calendar year 2018. Again, that's 8,500 metric tonnes. For perspective, the entire world will only mine about 2,800 metric tonnes this year, and the entire LBMA vault system—once you exclude Bank of England gold and gold pledged to ETFs—only holds 858 metric tonnes.

What's clear is that there is no "physical" involved in these transactions at all. The sheer volume alone makes that obvious. No doubt these transactions are only settled by exchanging futures positions for unallocated, leveraged and hyper-hypothecated "gold". Thus, going forward, we shall refer to these shenanigans as "exchanges for paper" instead, as there is clearly no real, unencumbered physical metal involved in the process.""

hedgeless_horseman BaBaBouy Fri, 06/22/2018 - 09:24 Permalink


Its new CEO Sewing spoke to his staff after the rating downgrade and reassured them of the bank’s inherent strength and future strategies. 

Say auf wiedersehen to zee bonus pool, bitchezzz!!!

Start pumping zee Spiderman towels!


In reply to by BaBaBouy

el buitre pods Fri, 06/22/2018 - 12:58 Permalink

The link in this article to 583 tons repatriated is dated Feb 2017 and from CNBC.  Nuff said.  The highly touted withdrawal of gold back from 33 Liberty Street to the Bundesbank a couple of years ago, by memory about 340 tons,  amounted to only 20% of their purported holdings at the NY Fed.  When the Bundesbank asked the NY Fed for permission to send in their auditors to check their holdings, they were told to fuck off.  Check it out for yourself.

In reply to by pods

hedgeless_horseman TheSilentMajority Fri, 06/22/2018 - 09:36 Permalink


10 cents?


The ECB reserve ratio is 1%.

The bank will now accept certain asset-backed securities with the "second best rating" as collateral for bank loans. It will also cut its reserve ratio requirement for banks to 1% from 2% to free up capital and boost lending.…

That is 1 cent in reserve per Euro on deposit.

When the ship hits the iceberg, 99% of the depositors are going for a cold swim.


In reply to by TheSilentMajority

hongdo el buitre Fri, 06/22/2018 - 14:39 Permalink

I think so.  But the main change in the US was when Glass-Stegall was abolished by Clinton, BofA moved something like $50T in derivative liabilities to their commercial division that included customer deposits.  Clearly with derivatives having seniority over savings deposits (unsecured loans) the savers would be toast.  This was not allowed under Glass-Stegall until Clinton abolished it allowing banks to combine speculative investing and commercial accounts.  I moved everything out of BofA except enough to cover monthly cash flow.  I have very little bank exposure now and will probably move even that to a credit union.

The big change in europe was allowing bank bail-ins where a bank could confiscate deposits or convert to stock in order to meet reserve requirements as happened in Cyprus. I suppose if the bank lost a lot of money on derivatives (or any other reason)  they could bail-in depositors to increase reserves.  The US then followed europe as part of Dodd-Frank under Obama.

edit - I may have this timeline wrong.  Feel free to correct it if so.

In reply to by el buitre

TheBigOldDog Fri, 06/22/2018 - 09:27 Permalink

Gee, what are the odds that this:

"so far, it’s not even acknowledging it has a problem."

is due to this:

"Allowing Deutsche Bank to fail could have catastrophic consequences for Germany"

Fear of death [bankruptcy] is healthy. Remove it, and see how people [companies] behave

gregga777 TheBigOldDog Fri, 06/22/2018 - 09:53 Permalink

Can anyone point to a good short summary of why Deutsche Bank is in such bad shape - the root causes? 

Easy: Liabilities, especially in derivatives, that exceed liquid assets by gargantuan orders of magnitude in the event of a seizure in the world wide collateral chains. Essentially a loss of trust with their counter-parties causing all financial flows to stop. Sort of like a financial avalanche. All the rest of the explanantions are just filling in the details. 

Even easier: fractional reserve banking. 

In reply to by TheBigOldDog

Joe A Arnold Fri, 06/22/2018 - 10:46 Permalink

The reunification was paid for by the German tax payers. The reunification tax actually continued after the reunification was paid for. That is why the coffers of the German state and German financial institution got filled at the expense of the German tax payers. That money was then subsequently loaned to countries and people in Europe that wanted to buy "Made in Germany".

In reply to by Arnold

Cashboy Fri, 06/22/2018 - 09:35 Permalink

Am I reading this correctly?
"has repatriated 583 tonnes, or $31 million worth, of gold recently"
I will give US$32 million for the 583 tonnes !!
583 tonnes = 583,000 kilos x US$40,000/kilo = US$23,320,000,000 => US$23 billion ??

Chief Joesph Fri, 06/22/2018 - 10:07 Permalink

"The Federal Reserve has labeled Deutsche Bank’s US operation as troubled".  Another case of the pot calling the kettle black.  If anyone has troubles, it is the Fed.  Let's not forget who has the $21.5 trillion debt!  Germany has nowhere near that, but rather at $2.4 trillion.  Germany is wise for repatriating its gold. Would you allow someone who is terribly in debt, and has a terrible track record of managing it, hold your money?   

tangent Fri, 06/22/2018 - 10:13 Permalink

This article uses questionable tactics. The chart of Lehman vs. Deutsche bottoms at $0 with Lehman but at $6 with Deutsche. Clearly they adjusted that number to make the graphs have more of an overlap!