Armstrong Economics Blog/Banking Crisis
Re-Posted Jun 1, 2018 by Martin Armstrong
Deutsche Bank has now been classified as a problem bank by FDIC and has been included in a list of banks to be watched. This is the biggest bank in Europe. It cannot be merged within Germany with Commerce Bank for there is just not enough equity to overcome the derivative losses. The only other candidate is BNP, but that is a French bank. This is where the fairytale of Euroland ends. They wanted to create a single currency, but they were unwilling to actually merge the economies. This is why our sources in Italy argue they are now an occupied country. They are dictated to but and request for help is rejected. This is what the “remain” crowd argue for against BREXIT?
A merger of BNP with Deutsche Bank would mean Germany is subservient to France. That is not “politically” acceptable. The entire “BAIL-IN” scheme was NOT because the government wanted to hold banks “responsible” but because a bailout of banks in one country would be seen as a transfer of money from one country to another. This exposes why the Euro is in serious trouble. There is ONLY the idea of a single currency and then Brussels will dictate what everyone else must do, but Brussels refuses to take responsibility for the debt and banking system of all of Europe.
From the very beginning when the committee in charge of creating the Euro came to our WEC in London, I warned that (1) there would be no single interest rate, and (2) without a debt-consolidation, the Euro would NEVER compete with the dollar and ultimately fail. The success of the USA was primarily (1) a single language, and (2) Alexander Hamilton consolidated all the debts of the member states making it the national debt federally. ONLY federal debt is at reserve status. Whatever California does is on them. Their bankruptcy does not threaten the entire country or the status of the dollar. California is no different from Bangladesh who also can issue debt in dollars. This proves the issue is NOT a single currency. The issue is the STRUCTURE!
In the EU, because the debts were never consolidated, then the failure of one brings down the whole because each member state is RESERVE status. The 50 states and municipalities in the USA can issue whatever debt they want in dollars and their status economically is no different than Bangladesh, Brazil, of Beruit issuing its debt in dollars.
There is the EURO CRISIS as Brussels has tried to be half-pregnant. That is why the Euro is doomed! It is STRUCTURE one for all (sometimes to a point) but one can take down all