Central Banks Will Create A Historical Gold Rush – Von Greyerz

Monday, August 1, 2016
By Paul Martin

August 1, 2016

The central banks are leading the world into a black hole and have NO IDEA what a disaster they have created.
What initially seemed like a nice money spinner for the private bankers in 1913 when the Fed was set up has resulted in a $2 quadrillion (at least) monster that is now totally out of control…

By Egon Von Greyerz, Gold Switzerland:

Banks and central banks are experts at forging money
During the last hundred years, the Ponzi scheme seemed to work beautifully under the guise of Keynesianism. So whenever there was a problem in any economy in the world, all that was needed was some stimulus in the form of credit or forged money creation. And there are so many ways to forge money.Through the unlimited flexibility of the fractional banking system, money printing became the most perfect perpetual motion system whereby the more credit that was created the more credit and paper money could be issued by the banks. There is absolutely no limit to how much money could be printed.

So banks and central banks have been in collusion to print or forge paper money which has no value and no asset banking. Any private individual doing the same would spend the rest of his days in jail. But when the bankers do it, it creates massive wealth and respectability for them since they have the full backing of governments. What a rotten world!

Can Deutsche Bank survive?
Thus, it is a fallacy to believe that governments and central banks are the only money printers. Most of the false wealth is created by commercial banks that blow up their balance sheets 10 to 50 times. And if derivatives are included the bank’s exposure can be over 100 times the equity. Take Deutsche Bank for example; the total balance sheet exposure is 25 times equity. Adding their derivatives exposure of €68 trillion, Deutsche’s leverage is 100 times share capital and reserves. This means that a depositor hoping to get his money back from the bank should be aware that any loss above 1% of Deutsche’s assets would make them bankrupt. There is obviously no question that Deutsche will lose only 1%. They are virtually guaranteed to lose more than 10% and probably at least 50% of total assets which means that if you are a depositor you will definitely not get your money back. Most European banks are in a similar position and so are many US banks including JP Morgan, Bank of America and Citigroup. And don’t believe that Japanese, Chinese or Emerging Market banks are in a better position. This is of course the reason why most major banks’ share prices have fallen 75-95% since 2006.

Central banks’ balance sheets have exploded since 2006

The Rest…HERE

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