Deutsche Bank – The new Lehman Brothers?

www.armstrongeconomics.com

This rumor mill has been going on and it doesn’t stop. The crushing blow to Europe will be the failure of Germany’s biggest bank. Yes, Deutsche Bank is quietly being talked about in every circle that it is facing bankruptcy. Since March, the rumors have flown since Deutsche Bank had failed the US regulatory stress test which was followed by the resignation of its head in June. A collapse of the Deutsche Bank is profound and very likely to impact Europe to the point everyone is calling it behind the curtain a new Lehman Moment. Sources tie this with the Fed’s decision not to raise rates fearing they would be seen as the cause of its failure. Germany clearly faces a major shock and if this combines with Volkswagen for the turning point next week, well here we go again.

The potential financial chaos the other side of 2015.75 is just mind-numbing. Since Germany has been regarded as the primary driving force which has held the Euro and Europe together, one can only close your eyes to vision what comes in the aftermath. So pay attention here. These are critical indications within what is the core economy of Europe. We are not talking about Greece here. The structure of the Euro undermined the entire banking system of Europe far more profoundly than in the United States where reserves are only US federal debt not the debt of all member 50 states. This is the major difference between Europe banking and the US banking.

www.armstrongeconomics.com

Gold’s rally into the target weeks for the ECM appears to be linked to the potential crisis in European banking. This has nothing to do with the dollar, fiat, inflation, or whatever. This this the only reason gold rises – the hedge against real crisis and uncertainty.

Gold may not be sustainable. We really need to see a Weekly closing above 1188 to think that there is some sustainability short-term. We need that signal to reach the technical resistance in the mid 1200 level. We have a crisis in confidence and a crisis in German banking with the ECM on Sept 30th/October 1st will shake the tree of public confidence on a major global level.