according to an article at Zero Hedge.
We’ve featured several videos here that talked about Deutsche bank’s manipulation of the silver market in conjunction with other major banks. What was really surprising given how long this theft went on was that Deutsche Bank admitted their role. As part of the settlement gave up 35,000 pages of documents that exposed the other banks that participated in the silver manipulation.
So now we have some insight into the why their settlement and they why they exposed all their co-conspirator banks in the scheme – there were no profits and in that sense they were broke.
So although this is a bad news story for Deutsche Bank it is actually a good news story for the precious metals markets. Now that the manipulation schemes of the banks are exposed there might just be a chance for true market price discovery. Now what has to happen is that all of the other co-conspirator banks in the silver manipulation scheme that were exposed in those 35,000 pages of documents need to be prosecuted.
But one of the things that made this article really interesting and caught my notice was the first sentence in the Zero Hedge article and the reason given for Deutsche Bank’s drop in profit:
“The latest confirmation that Germany’s troubled banking giant Deutsche Bank is unable to navigate the troubled waters of NIRP came on Wednesday when the bank announced that its second-quarter net income fell 98% from a year earlier”
In case you are not up on banking sector acronyms NIRP stands for Negative Interest Rate Policy. But wait a minute, isn’t that what other world banks like Japan have been dealing with? Could it be that other banks worldwide are seeing their profits shrivel because of either zero or near zero interest rates. Well it turns out that other banking systems are having problems with Negative Interest Rate Policy aka NIRP too. The Wall Street Journal featured an articleJapan’s Negative Rate Experiment is Floundering A lot of the language Japan’s central bank used in justifying the NIRP are eerily similar to FED speak we have heard from our own FED leaders.
Now US has had a zero interest rates since 2008. The FED raised the current FED fund to a whopping three quarters of one per cent! Which got me to thinking about the effects of low interest rates on the banks themselves. I would think a bank would be able to skim a lot more money(aka profit) in making a loan at say 8% than in making a loan a 3%. So I would speculate that the profits of a lot more banks will fall. What do you think?
That’s what makes this Bad News story for Deutsche banks a double benefit story for precious metals.
First there is the exposure of the silver manipulation scheme coordinated by major banks around the world.
Secondly banks throughout the world which were viewed as havens for safety and a place to put your money their for safe keeping may actually be in trouble. Banks, which many saw as a haven of safety, may actually be a port of risk. Just ask the bank depositors in Greece whose deposits took a “haircut” losing part of their deposit. Or read about the many new bank “bail in” provisions where depositors money is now considered part of the bank pool of money the bank can tap if they get into trouble.