Jim Willie: If Deutsche Bank Goes Under It Will be Lehman Times Five!

gold eventWith Euro-zone banks showing renewed signs of crisis (Deutsche Bank deleveraging by a massive €425 billion over the past year- the fastest pace since the 2011 near-Euro collapse, and Barclays admitting a £12.8bn capital shortfall Tuesday) and fundamental indicators in the gold market screaming financial crisis (GOFO rates remain negative for nearly 20 days and massive inventory draw-downs at the COMEX & LBMA), The Doc  spoke with Jim Willie Tuesday in an explosive MUST READ interview.

Willie, who recently stated that Deutche Bank is under major duress and could be the first major bank to collapse in the next stage of the banking crisis, informed The Doc that unlike the collapse of Lehman Brothers in 2008 which the Western Central banks were able to contain thanks to $13 T in bailout funds, a failure of Deutsche Bank would trigger a systemic banking contagion the likes of which the Western world has never seen.


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When asked by The Doc how Deutsche Bank differs from Lehman Brothers in 2008, and what events could lead to a renewed banking crisis, Willie responded:

My best German source informs me that 3 major banks are in trouble, and these 3 banks are fighting every single night to fight off insolvency and failure.  He says CitiGroup in New York, Barclays in London, and Deutsche Bank in Germany- every single night are in trouble.  

The important thing to keep in mind about Deutsche Bank is that it won’t go down alone if it goes down at all.  If it fails, it will take along with it 3,4,5,6 or 10, or 15 other banks!   It will be 1 or 2 quickly, then a 3rd and 4th a few weeks later, another, then before you know it, all of Italy and their major banks would be kaput.

My belief is that Deutsche Bank and its constant overnight risk of failure is somewhat tied to derivatives related to LIBOR, and also a risk related to their FOREX derivatives.   In other words, derivatives that the banks use to balance off the currencies.

Believe it or not, in the derivatives world, gold is treated like a currency.  Isn’t that ironic?
The FOREX derivatives that the banks are involved in are very much tied to gold.

The big immediate threat for Deutsche Bank though has to do with their problems in hiding debt for the Sovereign nations applying for the Eurozone.   For example, Greece and Italy couldn’t have their debt ratios over certain levels, so what Deutsche Bank did was they turned nice big chunks of Sovereign debt into currency swaps.
For an example of how this works: Suppose you have a $250,000 bad business loan that is stinking up your credit report.  So you call up your favorite Deutsche banker (or Goldman or Morgan- pick your criminal enterprise that is your personal favorite) and you tell him, look I have a $250,000 debt here and I want to make it go away.   They say OK, we can do something clever here.  We can pay off your debt so your credit report looks good, and we can establish this $250,000 Euro swap, and we’ll keep it off the books!

So you have this $250,000 bad loan stinking up your books, it goes away, and is replaced by something hidden- a euro currency swap!  That’s precisely what was done on a larger macro scale by Greece and Italy- and Deutsche Bank is involved with several of these, and the total that is becoming disclosed is $400 Billion.    Apply your typical ratios and you can conclude that they are $10, $15, $20 billion short for capital requirements!

The big banks are so criminal that they have converted fraud and criminal activity into a small cost of doing business!


When asked to clarify his statement that a failure of Deutsche Bank would likely result in a contagion of bank failures Jim Willie responded:

Deutsche Bank is in a slightly different situation than Barclays, even though Barclays just announced a 12.8 billion capital shortfall Tuesday.  The former Deutsche Bank CEO Ackermann was forced out last year.
Interpol came into Ackermann’s office and conducted a financial document raid.  There’s a new sheriff in town. Sources indicate that big, powerful Eastern interests hired Interpol to clean things up.

We had events in April, May, and June in which 5,000 metric tons of gold were lifted out of London.  Eastern entities were angry as hell that their gold had been leased and rehypothecated.  The London banks used the Easterners’ gold as equity for futures contracts that went bad- like in Spanish, Greek, and Italian debt. 

Deutsche Bank’s CEO could not withstand an assault on their office to retrieve data, even though he appealed to several high level politicians.

Fast forward to July 2013, and now we are seeing several Deutsche Bank Vice Presidents being indicted under various fraud charges, and they are almost all cooperating with Interpol!   They’ve flipped to cooperate with the serious fraud division of Interpol.

London and New York remain fortresses (for the cartel banksters), but Frankfurt might be in the process of being penetrated.

Getting back to your question as to why a Deutsche Bank failure would be different than Lehman Brothers, it’s because they are involved with all the different Sovereign bonds!   Spain, France, Italy, Greece, they’re involved with all of them and their balance sheet qualifications for the European Union! 

Deutsche Bank is involved very closely with all of the Eurozone currencies and bonds, and they have massive swaps interwoven with all the major Western banks.
I have a client informing me that Deutsche Bank has a bunch of swaps that they wrote against Detroit muni bonds!    Deutsche Bank has their fingers in alot of different pies!  Lehman Brothers was involved in numerous mortgage instruments.

Dont bet your money that Deutsche Bank will go down, but if it does, the next day its going to be Citi, Barclays, HSBC, Morgan Stanley, Soc Gen, and big threats to JP Morgan and Goldman Sachs! 

In conclusion, Deutsche Bank owns $25 trillion in OTC swaps with the Central banks and other major banks, so expect a daisy chain of derivative failures for the $1.6 quadrillion derivative market if it were to fail! 
Deutsche Bank cannot break down by itself.  It would result in the complete breakdown of the European Monetary Union!

In today’s world when a big bank dies, they merge them with another big bank.  Another European bank, potentially Barclays.   I think we are going to see massive amounts of money flooding into gold!

A bank failure contagion, that’s whats going to push gold way over $2,000/oz again.
Silver is going to be moving over $100 and gold is going over $5,000, I’m as certain of it as I am that the sun will rise in the east in the morning come January. 

Part 2 of Jim Willie’s explosive interview covers gold and the massive fundamental indicators screaming CODE RED in the gold market is AVAILABLE NOW by clicking here:

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  1. Willie is saying this matter is like pointing out “If the sun goes supernova, things will get very hot.”  It’s true and it might be fun to bandy the concept around, but he doesn’t expect it to happen anytime soon.  Look at how the title is worded – it’s NOT ‘WHEN Deutche Bank…’  Willie even says “Dont bet your money that Deutche Bank will go down…

    • That makes Willie somewhat smarter than Sinclair, doesn’t it? At least he’s not making silly predictions with exact dates as if it was all predicted in the Mayan calendar. Willie is also not the only one talking about this DB calamity. There are a few big names starting to run with it. I think Max Keiser was one of the early oracles on the subject.
      If HSBC goes down, I wonder whether the receivers will come after me for what I own on their card? Maybe I should run it to the limit purchasing silver bullion, and hope fo rthe best :)

  2. Letting the biggest banks in the Western banking system collapse is a choice, and the central bankers are not going to let that happen. JW wouldn’t buy put options on DB, he knows better, he is just talking about the risks in the system.
    Policy markers will paper over what ever is needed, they will nationlize what ever bank if needed. 
    It’s their banking system, they will make-up the rules as needed, they will do as needed to keep if alive, betting that it will collapse is silly.

    • Exactly, it’s a choice.  Lehman was allowed to fail.  Forced to fail by JPM.  In hindsight the purpose of taking Lehman down was to shift even more draconian power to the banksters.  Cost of doing business from their perspective.  Doubt if they have much to gain by letting DB go down at this time.

    • Not only that, UD, but the German government must see DB as a symbol of Germany and its industrial power.  They simply cannot allow it to fail.  If all other options were to fail, I can see Germany exiting the EU, going back to the DM currency, and printing whatever amount is needed to recapitalize DB.  Unlike the US, however, the Germans are likely to be very smart about how they do this and will receive a generous portion of DB stock in exchange for this loan.

  3. The world is turning Japanese.

  4. In other news, if my aunt had balls, she’d be my uncle. There are numerous black swans flying around. I just one would hurry up and land LOL!

    • Does Deutche Bank have a Bureau of DEBT? They have a bureau for everything else, such as assets (Fiat) I might say, but when the Rubber hits the road, it is going to Eviscerate all over people’s faces (bankers & customers), and anyone in lunging distance. `

      A Euro type MOPE might help, a firing squad, oh yeah, they tried that with Hitler, or people with an ability to patch things up with paper? Cut & Paste always seem work. The US is doing it. Does BIS, a western banking Collaborating with IMF,UN, or ECB have any cent’s, I mean financial backing in fiat?

      Do they have any gold left? If not, Its CURTAINS for Germany.

      Let us get some color on the market with Jim Comisky: http://youtu.be/b1nVdoLxjiw

      Should have backed it up with GOLD! They can only use so much money for so much gold. silly

      This Picture of a lady is one of the best person you will ever meet, I am just using her Comment as a follow up for past comments.

    • nice!!

  5. Waterfalls still running…

    • And all the while as the PM’s are getting crushed:

      CBOE Interest Rate 10-Year T-No (^TNX)
      -Chicago Options

      2.69 +0.08(3.15%) 11:23AM EDT

  6. Maybe bailing out distressed banks would be inflationary, thus good for PM’s,  maybe not.   
    What asset does the best in a banking crisis?  Cash, or mainly the US dollar, it won’t be any different if it happens again.

  7. Will be curiious to find out how much more gold just left the western vaults…….
    Its odd, it used to be they would smash gold at night. That appeared to be changing the last few weeks as gold was often marginally up in AM hours. only to get swatted down once the US markets open. Maybe they think a moving target is harder to hit.


    • Looking at the Kitco charts for 2000 – 2012, Silver ended the year lower (than in August) in only two of those years: 2008 & 2011.
      If 2013 turns out like the majority, then PM’s will be higher at year’s end.
      But if TSHTF like in 2008, then your prediction will be spot-on.

    • “But if TSHTF like in 2008, then your prediction will be spot-on.”
      Did TSHTF in 2008?  Hmmm… I must have a different idea of what constitutes a SHTF scenario.  IMO, 2008 was merely a poo hitting the fan scenario.  ;-)

  9. russia buying gold

  10. Caption for the above photo:
    “Почему слова сделаны в Китае штамп по этому поводу?”

    Translation: Why are the words ‘made in china’ stamped on this?
    Also, what is that brown stuff on the noses of those smiling toadies standing behind Putin?

  11. “Fast forward to July 2013, and now we are seeing several Deutche Bank Vice Presidents being indicted under various fraud charges, and they are almost all cooperating with Interpol!   They’ve flipped to cooperate with the serious fraud division of Interpol.”
    Yeah.  Like they have a choice if they EVER want to be out of jail again.
    “Deutche Bank cannot break down by itself.  It would result in the complete breakdown of the European Monetary Union!”
    So, then the question becomes, “Are the Germans more dedicated to Deutsche Bank or to the EU?”.  It is possible that they might have to make that choice someday.
    “In today’s world when a big bank dies, they merge them with another big bank.  Another European bank, potentially Barclays.   I think we are going to see massive amounts of money flooding into gold!”
    Possibly.  Unfortunately, the merger of Deutsche Bank and Barclays is more likely to sink both of them than it is to rescue either of them… unless, of course, a HUGE amount of cash is injected into the merged entity to make up for all of their losses.  On the other hand, when one is talking the equivalent of many trillions of dollars, such as we are in the derivatives market, the gold market is VERY tiny by comparison.  One cannot bail out the Titanic with a tea cup… even if it is made of gold.

  12. My emotions are a bit mixed on this DBank fiasco.  Over  a year ago Dexia failed;  went waffles up. It’s asset base was 1.5 times the GDP of Belgium. That’s like JPM with an asset base of $22 trillion.   One month before it failed it was touted as a well capitalized and very safe bank—until the ‘bang’ moment.  Willie made clear reference about mid 2012 that Morgan Stanley was going to fail within a few months, possibly due to its exposure to Greek bond derivatives and bad mortgages last year.  It was saved by the first  tranches of the $45 billion  MBS QE purchases by the Fed.  Right church, wrong pew for Willie. But the bail out was pretty obvious nonetheless.  MS could have easily failed if not assisted by the Fed.
    I have a lot of respect for Willie but I think he might not place enough faith in the Fed and other central banks in their fervor to save TBTF banks.
    Too Big to Fail means just that.
    And after losing Lehman, Wachovia, Fannie Freddie, WAMU, Ally Bank(Forgot former name) Bear Sterns, Merrill Lynch etc etc etc, the Fed is absolutely terrified of another banking failure debacle. Then the cost was about $750 billion. A rolling bank failure in Euro or the US could easily cost 5 times as much. No one will be willing to approve that due bill if it came knockng at the door.
    Whether the real power elites give a rat’s butt about whether one of our TBTF banks fails, Bernanke and his ilk want at least some accolades for saving the world with FIAT QE in 2008. Their legacy will be intact if they can get out of Dodge before something really terrible happens. Therefore, Draghi, Merkel, Monti, LeGard, Holland, Carney, Bernanke and Lew will not let Dbank and its ilk fail on their watch.
    The US banks are about $16 trillion in assets with a leverage of about 13 or 14 to 1.  Zombie banks filled with toxic waste, to be sure. Filled with Mortgages, Euro bonds, derivatives etc. but when compared to Euro banks with their $46 trillion asset base and 35 to 1 leverage (x the reallt bad loans and collateral which may make their leverage at 50 to 100, like some French banks) their vulnerabilities are legion.  Whether DBank fails, as Willie opines could happen,  or it is bailed-out or bailed-in due to some catastrophic and quickly unfolding event, its solvency exists in name only, a name perpetuate just like Dexia when it failed. I would suggest that the end is nigh when some top p-leader says DBank is the most solvent bank in history, kind of like Blarney Frank telling the world that Fannie and Freddie were great investments.
    There is good evidence that many banks are on the edge.  If Barclays has a $20 billion shortfall, that is $20 billion against a $600 billion asset base.  Every 3% hit to that bank’s capital base makes it insolvent again no matter how much capital it sells or how much capital is rotated in from the Central bank or some jackass swaps that conceal the junk in the portfolio.

    Last year German set aside a fund of 460 billion Euros, about $600 billion dollars, to help their banks weather an exit from the Euro and the hit that would surely be taken when the bonds and loans to the PIIGS go toes up or are written off, as they are right now. 
    That 460 billion Euro fund would do wonders to shore up the balance sheet of Dbank and other German mainline banks. If that warchest is still in place then DBank should not have many worries.
    Just sayin’ but Merkel did set that up last with some help from the IMF.  When the German elections are done about Sept 22 2013, we will see whether Merket cuts the ties to the Southern Euro, completely stops funding dead PIIGS and says Nein to most capital entreaties from the southern tier

    • UK single family median priced homes are well over 5 x average (median) salary. Ten to 20x in some areas. When the government’s desperate ‘help to buy’ scheme backfires, we’ll see the rest of the crash. UK house prices have another 30-40% to fall. Lets see what THAT does to the banks’ balance sheets. ;)

  13. Apart from the announcement about the shortfall, what evidence do we have that Barclays in London are in trouble?

    Sorry, I’ve been away from my computer for a couple of months.

  14. Timing of this will be interesting, can they string it out past the 2014 elections. If it goes down before the elections dems are cooked

  15. Tawnyard  I didn’t think about the price of gold if DBank fails.  My only reference to gold and silver prices was the drop we saw when Lehman failed and those price drops were mid double digits.  that lasted a short while but it was severe.  We’ve had a 60%  drop in silver and about 37% drop in gold since April 2011.  That is a very large drop and was not precipitated by bank failures. 
    If we see major bank failures it’s my opinion we could see a severe and short term drop in PM prices due to my phrase, a fear factor liquidation event
    As for home prices, when they are priced that high, the chances are they will break lower in price if you have troubles.  I am not able to guess what will happen to Barkleys Bank since I’ve not followed UK banks much except for the ones that have taken bond holders investments and used them for bail-ins, such as Northern Rock and RBS   I might have the names wrong but there was some news through Reggie Middleton about those bail-ins.

  16. dis is War!

  17. Ver is der Gold ?

  18. Slight correction:
    The title has it right, but the interview has it wrong:
    It’s “Deutsche”, not “Deutche”

  19. http://www.reuters.com/article/2013/07/31/israel-centralbank-leiderman-idUSL6N0G151N20130731
    So here’s one for the stand-up comics:
    Israel choice of a former JPMC guy to head the Bank of Israel failed when he got caught shoplifting in Hong Kong (….yes… big time ????????????????),
    so the new head of the Bank of Israel is not connected to JPMC, he’s a former head of emerging markets (…that seems smart to me… someone in Israel is paying attention to emerging markets) Deutsche Bank guy, who wants higher interest rates.
    Lol. How ironic.

  20. Do any of you guys actually think the Germans would let their Big bank fail leading up to the 22nd September election? I doubt it, unless Merkel thought she was going to lose then use the economic crisis to indefinitely postpone the election. Or after the election use the crisis to consolidate power and push through “temporary” measures like bail ins and credit controls or even go back to the deutsche mark? Interesting to think about 

  21. http://www.bloomberg.com/news/2013-06-17/deutsche-bank-leading-wall-street-rental-loans-mortgages.html
    Deutsche Bank Leading Wall Street Rental Loans: Mortgages
    Well this is why 85 Billion a month in MBS Purchases from the Fed. It always was a land grab.. Who where you kidding. Not this kid!

    • Netranger  this is a perfect example of the statement called Jefferson’s Prophesy
      He said  
       Well Net, there you have it.  DBank, rescued from the ashes of WWII, was probably financing the Nazi war machine,   is now loaning the funds to another private corporation  called Blackrock.  Blackrock is a $3 trillion equity firm reliant on and controlled by uber banks.  Blackrock  is now buying  the homes of our fathers to rent to our children using German bank monies.   WOW!! Renting is just one step from homeless when someone does not own their home.  The word Land Lord has teeth  Lord is the operant word
      Like Pat Fields said.  If Jefferson’s sons were alive today, they would be shooting.   The children are being turned into a nation of renters who could be turned out of their homes by these bastard bankers by nothing more than Praetorian in full battle rattle showing up with a writ depriving the renter of the roof over their heads. 
      Son of a bitch, this pisses me off.  
      And we wonder about the connection between the foreign banks and the Fed.  There are cities in California declaring eminent domain so that private equity firms and lenders can take private homes that are underwater in their loan to values.  These people are destined for homelessness too.  It’s just a matter of time.

    • AGXIIK! I read it loud and clear!

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