I find this Zero Hedge article of great interest:
So, in what may have been DB’s loudest cry for help against the ECB’s unwavering commitment to rock-bottom interest rates, the bank’s CEO, John Cryan, warned in a guest commentary ahead of the Handelsblatt Banking Summit titled, appropriately enough “Banks in Upheaval”, to be held in Frankfurt on August 31 and September 1, that “monetary policy is now running counter to the aims of strengthening the economy and making the European banking system safer.”
However, his most striking warning was not aimed at Mario Draghi, but at Germany itself – and ostensibly his own clients – implicitly suggesting that if Deutsche Bank goes down it is taking everyone down with it, when, as cited by Bloomberg, he warned of “fatal consequences” for savers and pension plans while “companies refrain from investments due to ongoing uncertainty and demand less loans.”
End of quote.
Now, none of this is new. The impact of Zero Interest Rate Policies (ZIRP) on creditors is self-evident.
But what this article triggered for me was the realisation that the “main street” banks’ traditional business of seeking deposits from creditors and lending it out (forgetting fractional reserve lending for the moment) is being dismantled by ZIRP. It means they are even more dependent upon the washing machine derivatives game for their profits. And when the plug gets pulled on the washing machine…
So, is part of the ZIRP plan to effectively destroy the main street banks, again as part of the move to a new global “lifesaving” currency?
Ohhh… and there is yet another update in the article of the inexorable decline of the Deutsche bank share price as it swirls around the toilet bowl…
I wonder if it’ll hold together until the Shemitah date of October 2nd? If you use the Lehman Brothers graph is a predictor, it’s almost bang on target.
The fallout of Deutsche Bank’s failure will be hard to imagine and impossible to contain.
We do, indeed, live in interesting times…
Richard
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