 Is Deutsche Bank the next Lehman?

[Robert24]

the answer is no. Deutsche Bank won't be the next Lehman. And even if they would get in trouble, the German government would bail them out which obviously didn't happen in Lehman's case.

[manarak]

First what you financially illiterate guys need to understand is that a derivatives position has a "worth" of 0, plus minus the current marked to market profit or loss.

So... 75 trillion... what does this figure represent if derivatives have no intrinsic value ? Then, how does a loss of 7% of one year derivative positions look like ?

These figures are all nonsense.

The two main sources of risk are market risk and counterparty risk.

* Market risk depends on asset prices, i.e. what is my profit/loss if the asset prices move by X. Figures called "Value at Risk" represent how much risk is taken, when the market moves are within standard deviation, 2 times standard deviation, 3 times etc. 99% probability is a standard indicator, but financial institutions calculate a lot of other scenarios because of non-linearity.

Today, market risk still isn't well understood by many Bank top executives, especially those without education in financial mathematics.

https://en.wikipedia.org/wiki/Value_at_risk

If one don't understand the above link, one is not qualified to make any statement about market risks.

* Counterparty risk is totally different.

In short, counterparty risk for derivatives is the risk that the other side of the derivatives deal will default.

Figures for counterparty risk are Credit Exposure, Expected Exposure and Potential Future Exposure.

A good article explaining counterparty risk:

http://www.investopedia.com/articles/optioninvestor/11/understanding-counterparty-risk.asp

Risk concentration, as well as risk correlation can cause a "domino effect" among financial institutions, because most financial transactions are made between financial institutions themselves, so, if a large institution has major problems, the crisis is likely to expand to other institutions, as was the case with Lehman.

But contrary to what public opinion believes, Lehman did not default on derivatives. The positions were either unwinded or transferred to other institutions.

The real default shock from Lehman was due to its default on loans and bonds, not directly because it couldn't honor derivatives contracts.

So a figure of "75 trillion of derivative bets", whatever that means, is not worrying in itself, it is more an illustration of what "too big to default" means.

Indeed, I think if DB files for bankruptcy, it will be much too big to be allowed to fail. The bank would still go down and its investors and lenders would take a big hit, but I am very confident the bank would first be put under state administration before being either restructured or liquidated, so that its downfall doesn't cause the rest of the market to follow.

manarak why do you feel the need to blind us with science to try to mask the concerns of the author of this article? If you are correct about downplaying any risk then why did the New York Fed slam Deutsche bank and accuse it of “ significant operational risk “ for having such massive exposure to derivatives? Are people at the NY Fed financially illiterate also?

And if it makes you feel better to accuse me of being financially illiterate because I may not understand the mathematical technicalities of these " financial instruments " – which incidentally even Warren Buffett described as as "financial weapons of mass destruction" (and I don’t think you could say he is financially illiterate ) then go ahead and do so if it makes you feel better.

I have no idea why you seem so anxious to deflect concern away from the danger of derivatives? The fact that you seem to consider yourself to have superior knowledge in this field to me suggests you are or were once part of these activities yourself ? I see no other motive for you to so vociferously defend the actions of the banksters in this field who have hardly shown an ability to act in good faith over recent years. And why do they still so vigourously resist transparency with derivatives if there nothing to worry about?

Anyway for me I find the grave concerns expressed by other well-known personalities in the financial world far more credible than what you have written (not only from the author of the article in the original post that you denigrated so unfairly and unjustifiably ) but even including the likes of Naomi Prins who was a managing director at Goldman-Sachs or billionaires Hugo Salinas Price and Eric Sprott or Elliott Management's Paul Singer. The list goes on and on.

Surely you can’t be suggesting that manarak is right and they are all wrong?

I'm not blinding anyone and certainly not saying DB is safe, and I am also not saying there isn't another crisis looming somehwere.

I'm just saying diabolizing derivatives and quoting huge meaningless figures that have only a very remote link to a possible crisis is not the right way to make a point.

How about Tavakoli and I are right ?

She certainly wouldn't say anything I have written is wrong.

You said "Janet Tavakoli believes due to endemic control fraud derivatives represent a truly potentially frightening financial time bomb. "

If this is true (I have no idea since I left banking years ago), then there is indeed a problem.

If you want my opinion, I believe a fundamental problem lies in how re-securitisation of assets is used to increase leverage.

I think that is the root of the problem, there should be regulations limiting re-securitization.

"If you want my opinion, I believe a fundamental problem lies in how re-securitisation of assets is used to increase leverage.

I think that is the root of the problem, there should be regulations limiting re-securitization."

But manarak isn't that essentially the whole point regarding being very concerned as at 2015? How can the most brilliant understanding of all the mathematical intricacies behind these instruments mean anything at all if they are all corrupted with criminality behind the scenes?

I mean if Jain’s raison d’etre was caught with his hand in the cookie jar for improperly valuing its risk exposure how can anyone have any trust in any of these activities?

Agreed.

But it seems now we are approaching a rational discussion - about DB managers potentially, intentionally misrepresenting the Bank's risks instead of just throwing big scary but meaningless figures around and predicting the end of the world.

I have been saying for a long time that what's needed in bank management is increased personal responsibility - mismanagement/criminal negligence in companies should potentially have seizure of managers' private assets as a consequence.

[Naam]

misrepesenting, blowing out of proportion, lack of detailed research and suppressing major facts are the strong points of all gloom&doomers. impressed are only scared little men who think their ricefields (which legally belong to a Thai partner) are the non-plus-ultra of investing and preserving "wealth".

the case of Deutsche Bank goes back to 2008/2009 and the result was the recent peanuts fine of 55mm.

for those who are interested to read the boring details presented by the SEC:

57. Deutsche Bank’s IPV function was performing no testing with respect to Deutsche
Bank’s Gap Risk in the LSS Positions. Indeed, as early as July 2008, IPV’s monthly control report noted that “LSS gap [risk] [is] not price tested. Methodology is under review.” Throughout the remainder of 2008 and the first quarter of 2009, Deutsche Bank’s Gap Risk in the LSS Positions remained untested by IPV.

58. As a result of the above, from at least January 2008 through at least March 2009,
Deutsche Bank’s internal accounting controls were inadequate.

https://www.sec.gov/litigation/admin/2015/34-75040.pdf

[Naam]

Agreed.

But it seems now we are approaching a rational discussion - about DB managers potentially, intentionally misrepresenting the Bank's risks instead of just throwing big scary but meaningless figures around and predicting the end of the world.

I have been saying for a long time that what's needed in bank management is increased personal responsibility - mismanagement/criminal negligence in companies should potentially have seizure of managers' private assets as a consequence.

and that during the peak months of the Lehman induced crisis!

[fvw53]

Agreed.

But it seems now we are approaching a rational discussion - about DB managers potentially, intentionally misrepresenting the Bank's risks instead of just throwing big scary but meaningless figures around and predicting the end of the world.

I have been saying for a long time that what's needed in bank management is increased personal responsibility - mismanagement/criminal negligence in companies should potentially have seizure of managers' private assets as a consequence.

and that during the peak months of the Lehman induced crisis!

I quote from manarak : ..." should potentially have seizure of managers' private assets as a consequence" ...yes indeed...but in the end criminal investigations and eventually prosecutions must take place.

Otherwise the crooks will easily start it all over with a smile.

[midas]

misrepesenting, blowing out of proportion, lack of detailed research and suppressing major facts are the strong points of all gloom&doomers. impressed are only scared little men who think their ricefields (which legally belong to a Thai partner) are the non-plus-ultra of investing and preserving "wealth".

the case of Deutsche Bank goes back to 2008/2009 and the result was the recent peanuts fine of 55mm.

for those who are interested to read the boring details presented by the SEC:

57. Deutsche Bank’s IPV function was performing no testing with respect to Deutsche

Bank’s Gap Risk in the LSS Positions. Indeed, as early as July 2008, IPV’s monthly control report noted that “LSS gap [risk] [is] not price tested. Methodology is under review.” Throughout the remainder of 2008 and the first quarter of 2009, Deutsche Bank’s Gap Risk in the LSS Positions remained untested by IPV.

58. As a result of the above, from at least January 2008 through at least March 2009,

Deutsche Bank’s internal accounting controls were inadequate.

https://www.sec.gov/litigation/admin/2015/34-75040.pdf

" the case of Deutsche Bank goes back to 2008/2009 and the result was the recent peanuts fine of 55mm."

Why you are evidently so anxious to portray this organisation as a pillar of virtuosity sure beats me

That fine was followed by a $2.5 billion fine for manipulating the Libor benchmark interest rate.because criminality seems to be part of their culture. In fact Deutsche Bank has spent €7.1 billion on litigation just in the past three years.

And they still face further legal challenges including probes into foreign exchange, mortgage- and asset-backed securities dealings and alleged US sanctions violations.

http://www.scmp.com/business/banking-finance/article/1774799/deutsche-bank-pay-record-us25-billion-resolve-libor-probes

Edited June 15, 2015 by midas

[Robert24]

@midas: Those legal charges are perfectly normal for most banks. All bigger investment banks had to pay such fines, whether it is Barclays, JPM, Bank of America, UBS, GS, etc. You can argue whether those fines have a good effect and also whether it is good that all those things are settled out of court and most individuals are not being pursued.

But in terms of DB's balance sheet and them going bust very soon, you are certainly dreaming. They will fix things under the new CEO and won't need any bail out from the German government. But in case something really bad happens, you can bet they will be bailed out by the German government.

[Naam]

misrepesenting, blowing out of proportion, lack of detailed research and suppressing major facts are the strong points of all gloom&doomers. impressed are only scared little men who think their ricefields (which legally belong to a Thai partner) are the non-plus-ultra of investing and preserving "wealth".

the case of Deutsche Bank goes back to 2008/2009 and the result was the recent peanuts fine of 55mm.

for those who are interested to read the boring details presented by the SEC:

57. Deutsche Bank’s IPV function was performing no testing with respect to Deutsche

Bank’s Gap Risk in the LSS Positions. Indeed, as early as July 2008, IPV’s monthly control report noted that “LSS gap [risk] [is] not price tested. Methodology is under review.” Throughout the remainder of 2008 and the first quarter of 2009, Deutsche Bank’s Gap Risk in the LSS Positions remained untested by IPV.

58. As a result of the above, from at least January 2008 through at least March 2009,

Deutsche Bank’s internal accounting controls were inadequate.

https://www.sec.gov/litigation/admin/2015/34-75040.pdf

" the case of Deutsche Bank goes back to 2008/2009 and the result was the recent peanuts fine of 55mm."

Why you are evidently so anxious to portray this organisation as a pillar of virtuosity sure beats me

That fine was followed by a $2.5 billion fine for manipulating the Libor benchmark interest rate.because criminality seems to be part of their culture. In fact Deutsche Bank has spent €7.1 billion on litigation just in the past three years.

And they still face further legal challenges including probes into foreign exchange, mortgage- and asset-backed securities dealings and alleged US sanctions violations.

http://www.scmp.com/business/banking-finance/article/1774799/deutsche-bank-pay-record-us25-billion-resolve-libor-probes

why you talk continously bullshit as well as presenting assumptions as far as my motives are concerned is beyond my grasp. i mentioned the peanuts amount because 55mm is peanuts compared what Deutsche and other multinational banks have paid and most probably will pay in future.

personally i couldn't care less what they will pay, whether they go belly-up or being bailed out by the German taxpayer.

i don't pay German taxes and my investments are not more tied to Deutsche Bank than your sorry rice fields and gold which you were promoting umpteen times during years in another gloom&doom Thaivisa thread trying to ridicule those who hold "worthless fiat money".

actually i'd be happy if a nice shake-up like 2008/2009 happens. investing in high yield / high risk assets has become hard and frustrating work because it takes nowadays a microscope and many hours of research instead of just a magnifying glass to identify distressed debt with an interesting and positive risk/reward ratio.

p.s. counted any rice grains lately instead of beans?

[green job]

misrepesenting, blowing out of proportion, lack of detailed research and suppressing major facts are the strong points of all gloom&doomers. impressed are only scared little men who think their ricefields (which legally belong to a Thai partner) are the non-plus-ultra of investing and preserving "wealth".

the case of Deutsche Bank goes back to 2008/2009 and the result was the recent peanuts fine of 55mm.

for those who are interested to read the boring details presented by the SEC:

57. Deutsche Bank’s IPV function was performing no testing with respect to Deutsche

Bank’s Gap Risk in the LSS Positions. Indeed, as early as July 2008, IPV’s monthly control report noted that “LSS gap [risk] [is] not price tested. Methodology is under review.” Throughout the remainder of 2008 and the first quarter of 2009, Deutsche Bank’s Gap Risk in the LSS Positions remained untested by IPV.

58. As a result of the above, from at least January 2008 through at least March 2009,

Deutsche Bank’s internal accounting controls were inadequate.

https://www.sec.gov/litigation/admin/2015/34-75040.pdf

" the case of Deutsche Bank goes back to 2008/2009 and the result was the recent peanuts fine of 55mm."

Why you are evidently so anxious to portray this organisation as a pillar of virtuosity sure beats me

That fine was followed by a $2.5 billion fine for manipulating the Libor benchmark interest rate.because criminality seems to be part of their culture. In fact Deutsche Bank has spent €7.1 billion on litigation just in the past three years.

And they still face further legal challenges including probes into foreign exchange, mortgage- and asset-backed securities dealings and alleged US sanctions violations.

http://www.scmp.com/business/banking-finance/article/1774799/deutsche-bank-pay-record-us25-billion-resolve-libor-probes

why you talk continously bullshit as well as presenting assumptions as far as my motives are concerned is beyond my grasp. i mentioned the peanuts amount because 55mm is peanuts compared what Deutsche and other multinational banks have paid and most probably will pay in future.

personally i couldn't care less what they will pay, whether they go belly-up or being bailed out by the German taxpayer.

i don't pay German taxes and my investments are not more tied to Deutsche Bank than your sorry rice fields and gold which you were promoting umpteen times during years in another gloom&doom Thaivisa thread trying to ridicule those who hold "worthless fiat money".

actually i'd be happy if a nice shake-up like 2008/2009 happens. investing in high yield / high risk assets has become hard and frustrating work because it takes nowadays a microscope and many hours of research instead of just a magnifying glass to identify distressed debt with an interesting and positive risk/reward ratio.

p.s. counted any rice grains lately instead of beans?

Yaaaaaawn the same old crap day in day out. It would not be so bad,if you did not go out of your way to offend people. What you call assumptions,are mostly

the truth all money is now no longer such, we only have currency,and that is printed. Now climb down from your high horse and face the facts,If you do not

physically own Gold,Silver Gems etc etc you are fxxkt. As in a few years ALL of the Fiat currencys WILL collapse,together with the Euro and EU.

There are hard times ahead, and the people with most of their assets in the bank WILL lose them,and it will hit the bigest bull sxxxxrs the most

[Naam]

Yaaaaaawn the same old crap day in day out. It would not be so bad,if you did not go out of your way to offend people. What you call assumptions,are mostly

the truth all money is now no longer such, we only have currency,and that is printed. Now climb down from your high horse and face the facts,If you do not

physically own Gold,Silver Gems etc etc you are fxxkt. As in a few years ALL of the Fiat currencys WILL collapse,together with the Euro and EU.

There are hard times ahead, and the people with most of their assets in the bank WILL lose them,and it will hit the bigest bull sxxxxrs the most

"as in a few years, any time from now, the sky will fall, worthless fiat money, only printed paper, you will lose everything, your assets are only paper..." is the talk of little men who are full with envy and have nothing to lose.

best quote in TV thread "Financial Crisis" six years ago was:

...and your footman will render your fat in your pool.

[midas]

The number of senior executives departing almost simultaneously also seems to lend credence to the idea that Deutsche Bank may be in trouble.

Deutsche Bank head of structured finance Elad Shraga left one month ago.

Then last week James Malcolm, a foreign-exchange strategist at Deutsche Bank left to join Caxton Associates in London.

And now Jonathan Pollack, global head of Deutsche Bank commercial real estate group has left the bank after 16 years with the company.

http://www.bloomberg.com/news/articles/2015-06-12/deutsche-bank-s-pollack-leaves-as-real-estate-head-post

http://www.bloomberg.com/news/articles/2015-06-15/deutsche-bank-s-james-malcolm-joins-caxton-hedge-fund-in-london

[AyG]

The number of senior executives departing almost simultaneously also seems to lend credence to the idea that Deutsche Bank may be in trouble.

Deutsche Bank head of structured finance Elad Shraga left one month ago.

Then last week James Malcolm, a foreign-exchange strategist at Deutsche Bank left to join Caxton Associates in London.

And now Jonathan Pollack, global head of Deutsche Bank commercial real estate group has left the bank after 16 years with the company.

http://www.bloomberg.com/news/articles/2015-06-12/deutsche-bank-s-pollack-leaves-as-real-estate-head-post

http://www.bloomberg.com/news/articles/2015-06-15/deutsche-bank-s-james-malcolm-joins-caxton-hedge-fund-in-london

Three people leave out of the many, many thousands they employ, and you read something into it? Seriously?

[midas]

The number of senior executives departing almost simultaneously also seems to lend credence to the idea that Deutsche Bank may be in trouble.

Deutsche Bank head of structured finance Elad Shraga left one month ago.

Then last week James Malcolm, a foreign-exchange strategist at Deutsche Bank left to join Caxton Associates in London.

And now Jonathan Pollack, global head of Deutsche Bank commercial real estate group has left the bank after 16 years with the company.

http://www.bloomberg.com/news/articles/2015-06-12/deutsche-bank-s-pollack-leaves-as-real-estate-head-post

http://www.bloomberg.com/news/articles/2015-06-15/deutsche-bank-s-james-malcolm-joins-caxton-hedge-fund-in-london

Three people leave out of the many, many thousands they employ, and you read something into it? Seriously?

Not in isolation but when you read in the Bloomberg article that he declined to comment (I mean most people can come up with some comments as to why they’re leaving their employer after16 years) and didn’t even return phone calls that sounds fishy on top of the fact that only last week German prosecutors raided Deutsche Bank in a search for evidence related to client securities transactions.

http://www.reuters.com/article/2015/06/09/us-deutsche-bank-raid-idUSKBN0OP0VU20150609

[SheungWan]

This is a trailer for 'buy gold', right?

[NeverSure]

the truth all money is now no longer such, we only have currency,and that is printed. Now climb down from your high horse and face the facts,If you do not

physically own Gold,Silver Gems etc etc you are fxxkt. As in a few years ALL of the Fiat currencys WILL collapse,together with the Euro and EU.

There are hard times ahead, and the people with most of their assets in the bank WILL lose them,and it will hit the bigest bull sxxxxrs the most

I have heard this line since 1973 and I was a banker. The president of the bank assured me that the USD could last no time because it had gone off the gold standard.

I have asked gloom and doom gold bugs many times, but none will answer: "If there is a worldwide collapse of fiat money that's as bad as they predict, why would a hungry man trade his loaf of bread for one kilo of gold?" What is the real value of gold when people are hungry?

[green job]

the truth all money is now no longer such, we only have currency,and that is printed. Now climb down from your high horse and face the facts,If you do not

physically own Gold,Silver Gems etc etc you are fxxkt. As in a few years ALL of the Fiat currencys WILL collapse,together with the Euro and EU.

There are hard times ahead, and the people with most of their assets in the bank WILL lose them,and it will hit the bigest bull sxxxxrs the most

I have heard this line since 1973 and I was a banker. The president of the bank assured me that the USD could last no time because it had gone off the gold standard.

I have asked gloom and doom gold bugs many times, but none will answer: "If there is a worldwide collapse of fiat money that's as bad as they predict, why would a hungry man trade his loaf of bread for one kilo of gold?" What is the real value of gold when people are hungry?

WOW and that comment made by an ex banker!! Well Well Well!

[Naam]

the truth all money is now no longer such, we only have currency,and that is printed. Now climb down from your high horse and face the facts,If you do not

physically own Gold,Silver Gems etc etc you are fxxkt. As in a few years ALL of the Fiat currencys WILL collapse,together with the Euro and EU.

There are hard times ahead, and the people with most of their assets in the bank WILL lose them,and it will hit the bigest bull sxxxxrs the most

I have heard this line since 1973 and I was a banker. The president of the bank assured me that the USD could last no time because it had gone off the gold standard.

I have asked gloom and doom gold bugs many times, but none will answer: "If there is a worldwide collapse of fiat money that's as bad as they predict, why would a hungry man trade his loaf of bread for one kilo of gold?" What is the real value of gold when people are hungry?

WOW and that comment made by an ex banker!! Well Well Well!

thanks for your valuable insights

[NeverSure]

I have heard this line since 1973 and I was a banker. The president of the bank assured me that the USD could last no time because it had gone off the gold standard.

I have asked gloom and doom gold bugs many times, but none will answer: "If there is a worldwide collapse of fiat money that's as bad as they predict, why would a hungry man trade his loaf of bread for one kilo of gold?" What is the real value of gold when people are hungry?

WOW and that comment made by an ex banker!! Well Well Well!

The bankers I've known are just people, believe it or not.

As for the gold, If there is a societal collapse and all fiat money is worthless and as they say, the sh1t has hit the fan, I would think that a pound of bread would be worth more than a pound of gold at the daily exchange. Not once have I ever understood why gold is valuable other than as decorative jewelry and a great electrical conductor for thing like computers. It may or may not even be a hedge against inflation.

Just like fiat money there is an international understanding that gold has value and there is a market function to state a value. But value in what? If fiat money is no good, why would gold be? You can't eat either one nor can you power your car with them. I understand the value of oil because it has units of work stored in it. It also has things like plastics, butyl and medicines stored in it. How much work can gold do? What medicine comes from gold?

I think a real unit of value is good farm land. It can produce life sustaining food. They aren't making more of it either as the population grows. I understand the value of good farm land but not at all gold.

I was raised as a rancher and I get it how the farm or ranch produces new wealth in the form of crops and animals. I don't understand how gold produces new wealth. Just as a new farm tractor depreciates but oxen or horses or mules for plowing actually reproduce themselves (can a John Deere do that?) multiplying and bringing new wealth, I see gold as a depreciating asset. It's a lump that can't produce anything new including reproducing itself like a good milk cow can.

Cheers

[green job]

I have heard this line since 1973 and I was a banker. The president of the bank assured me that the USD could last no time because it had gone off the gold standard.

I have asked gloom and doom gold bugs many times, but none will answer: "If there is a worldwide collapse of fiat money that's as bad as they predict, why would a hungry man trade his loaf of bread for one kilo of gold?" What is the real value of gold when people are hungry?

WOW and that comment made by an ex banker!! Well Well Well!

The bankers I've known are just people, believe it or not.

As for the gold, If there is a societal collapse and all fiat money is worthless and as they say, the sh1t has hit the fan, I would think that a pound of bread would be worth more than a pound of gold at the daily exchange. Not once have I ever understood why gold is valuable other than as decorative jewelry and a great electrical conductor for thing like computers. It may or may not even be a hedge against inflation.

Just like fiat money there is an international understanding that gold has value and there is a market function to state a value. But value in what? If fiat money is no good, why would gold be? You can't eat either one nor can you power your car with them. I understand the value of oil because it has units of work stored in it. It also has things like plastics, butyl and medicines stored in it. How much work can gold do? What medicine comes from gold?

I think a real unit of value is good farm land. It can produce life sustaining food. They aren't making more of it either as the population grows. I understand the value of good farm land but not at all gold.

I was raised as a rancher and I get it how the farm or ranch produces new wealth in the form of crops and animals. I don't understand how gold produces new wealth. Just as a new farm tractor depreciates but oxen or horses or mules for plowing actually reproduce themselves (can a John Deere do that?) multiplying and bringing new wealth, I see gold as a depreciating asset. It's a lump that can't produce anything new including reproducing itself like a good milk cow can.

Cheers

For Fxxks sake,,,, This is now starting to sound like a kindergarten.Did you not learn anything at school?

[green job]

I have heard this line since 1973 and I was a banker. The president of the bank assured me that the USD could last no time because it had gone off the gold standard.

I have asked gloom and doom gold bugs many times, but none will answer: "If there is a worldwide collapse of fiat money that's as bad as they predict, why would a hungry man trade his loaf of bread for one kilo of gold?" What is the real value of gold when people are hungry?

WOW and that comment made by an ex banker!! Well Well Well!

The bankers I've known are just people, believe it or not.

As for the gold, If there is a societal collapse and all fiat money is worthless and as they say, the sh1t has hit the fan, I would think that a pound of bread would be worth more than a pound of gold at the daily exchange. Not once have I ever understood why gold is valuable other than as decorative jewelry and a great electrical conductor for thing like computers. It may or may not even be a hedge against inflation.

Just like fiat money there is an international understanding that gold has value and there is a market function to state a value. But value in what? If fiat money is no good, why would gold be? You can't eat either one nor can you power your car with them. I understand the value of oil because it has units of work stored in it. It also has things like plastics, butyl and medicines stored in it. How much work can gold do? What medicine comes from gold?

I think a real unit of value is good farm land. It can produce life sustaining food. They aren't making more of it either as the population grows. I understand the value of good farm land but not at all gold.

I was raised as a rancher and I get it how the farm or ranch produces new wealth in the form of crops and animals. I don't understand how gold produces new wealth. Just as a new farm tractor depreciates but oxen or horses or mules for plowing actually reproduce themselves (can a John Deere do that?) multiplying and bringing new wealth, I see gold as a depreciating asset. It's a lump that can't produce anything new including reproducing itself like a good milk cow can.

Cheers

For Fxxks sake,,,, This is now starting to sound like a kindergarten.Did you not learn anything at school?

I dont see what this has to do with Food bread etc. We are talking about Paper currency that has no backing,and no value,just promises. Money is another thing.as it is backed by assets,That is normaly Gold Silver , do you know what an ASSET is?

Tell me are you all like this on the ranch? I will tell you,that on the farm in the UK we have a completly different point of veiw.

[manarak]

I dont see what this has to do with Food bread etc. We are talking about Paper currency that has no backing,and no value,just promises. Money is another thing.as it is backed by assets,That is normaly Gold Silver , do you know what an ASSET is?

Tell me are you all like this on the ranch? I will tell you,that on the farm in the UK we have a completly different point of veiw.

I hear you and my opinion is that a currency should be backed by a constant basket of commodities.

[NeverSure]

I dont see what this has to do with Food bread etc. We are talking about Paper currency that has no backing,and no value,just promises. Money is another thing.as it is backed by assets,That is normaly Gold Silver , do you know what an ASSET is?

Tell me are you all like this on the ranch? I will tell you,that on the farm in the UK we have a completly different point of veiw.

Do you realize that you haven't made a single cogent argument here? Personal insults won't win anything. Is that all you have?

If gold is currency as some claim, and fiat money isn't, then gold should be readily exchangeable for food and other necessities. There was a time when it was, but only because people agreed that it was. The same is true of fiat currency.

Unless you have a currency, be it paper or gold, that someone wants more than he wants his service or commodity, then you don't have any money.

I am still waiting for someone to tell me why, "when the SHTF", a man would trade his food, firewood or labor for gold. Hungry and cold people don't need gold; they need food and firewood.

The only reason people perceive gold as having a lot of value is because people perceive that it does and there's the vicious circle.

Perhaps Shakespeare understood why something might be valuable at any moment. "A horse! A horse! My kingdom for a horse!"

[Naam]

I dont see what this has to do with Food bread etc. We are talking about Paper currency that has no backing,and no value,just promises. Money is another thing.as it is backed by assets,That is normaly Gold Silver , do you know what an ASSET is?

Tell me are you all like this on the ranch? I will tell you,that on the farm in the UK we have a completly different point of veiw.

always the same irrelevant and irrational yada-yada "paper has no value" from people who try to convince others that a dreamworld exists where solid gold coins and silver bars are used to pay for any expenses. these times existed once but are long gone and those who are in power and have all the clout will make sure that they'll never return.

[green job]

I dont see what this has to do with Food bread etc. We are talking about Paper currency that has no backing,and no value,just promises. Money is another thing.as it is backed by assets,That is normaly Gold Silver , do you know what an ASSET is?

Tell me are you all like this on the ranch? I will tell you,that on the farm in the UK we have a completly different point of veiw.

always the same irrelevant and irrational yada-yada "paper has no value" from people who try to convince others that a dreamworld exists where solid gold coins and silver bars are used to pay for any expenses. these times existed once but are long gone and those who are in power and have all the clout will make sure that they'll never return.

So Herr Naam,where is all the gold? And all the gold tooth fillings ? I know and they will have you all in the end.

[Naam]

I dont see what this has to do with Food bread etc. We are talking about Paper currency that has no backing,and no value,just promises. Money is another thing.as it is backed by assets,That is normaly Gold Silver , do you know what an ASSET is?

Tell me are you all like this on the ranch? I will tell you,that on the farm in the UK we have a completly different point of veiw.

always the same irrelevant and irrational yada-yada "paper has no value" from people who try to convince others that a dreamworld exists where solid gold coins and silver bars are used to pay for any expenses. these times existed once but are long gone and those who are in power and have all the clout will make sure that they'll never return.

So Herr Naam,where is all the gold? And all the gold tooth fillings ? I know and they will have you all in the end

some of the gold is in my mouth, some of the gold we own is stashed away and some of the gold is worn by my wife.

however i have no idea who "they" are who will have "me all in the end"

[midas]

I have heard this line since 1973 and I was a banker. The president of the bank assured me that the USD could last no time because it had gone off the gold standard.

I have asked gloom and doom gold bugs many times, but none will answer: "If there is a worldwide collapse of fiat money that's as bad as they predict, why would a hungry man trade his loaf of bread for one kilo of gold?" What is the real value of gold when people are hungry?

WOW and that comment made by an ex banker!! Well Well Well!

The bankers I've known are just people, believe it or not.

As for the gold, If there is a societal collapse and all fiat money is worthless and as they say, the sh1t has hit the fan, I would think that a pound of bread would be worth more than a pound of gold at the daily exchange. Not once have I ever understood why gold is valuable other than as decorative jewelry and a great electrical conductor for thing like computers. It may or may not even be a hedge against inflation.

Just like fiat money there is an international understanding that gold has value and there is a market function to state a value. But value in what? If fiat money is no good, why would gold be? You can't eat either one nor can you power your car with them. I understand the value of oil because it has units of work stored in it. It also has things like plastics, butyl and medicines stored in it. How much work can gold do? What medicine comes from gold?

I think a real unit of value is good farm land. It can produce life sustaining food. They aren't making more of it either as the population grows. I understand the value of good farm land but not at all gold.

I was raised as a rancher and I get it how the farm or ranch produces new wealth in the form of crops and animals. I don't understand how gold produces new wealth. Just as a new farm tractor depreciates but oxen or horses or mules for plowing actually reproduce themselves (can a John Deere do that?) multiplying and bringing new wealth, I see gold as a depreciating asset. It's a lump that can't produce anything new including reproducing itself like a good milk cow can.

Cheers

" The bankers I've known are just people, believe it or not. "

It seems like you are implying they are ordinary folks. But they are " just people " without any social conscience. How can you go home with these obscene amounts of money knowing it was earned through fraud ?

Deutsche Bank’s $96 Million Banker Bonus at Center of Lawsuit

http://www.bloomberg.com/news/articles/2015-06-18/deutsche-bank-s-96-million-banker-bonus-at-center-of-lawsuit

Edited June 19, 2015 by midas

[Naam]

I have heard this line since 1973 and I was a banker. The president of the bank assured me that the USD could last no time because it had gone off the gold standard.

I have asked gloom and doom gold bugs many times, but none will answer: "If there is a worldwide collapse of fiat money that's as bad as they predict, why would a hungry man trade his loaf of bread for one kilo of gold?" What is the real value of gold when people are hungry?

The bankers I've known are just people, believe it or not.

As for the gold, If there is a societal collapse and all fiat money is worthless and as they say, the sh1t has hit the fan, I would think that a pound of bread would be worth more than a pound of gold at the daily exchange. Not once have I ever understood why gold is valuable other than as decorative jewelry and a great electrical conductor for thing like computers. It may or may not even be a hedge against inflation.

Just like fiat money there is an international understanding that gold has value and there is a market function to state a value. But value in what? If fiat money is no good, why would gold be? You can't eat either one nor can you power your car with them. I understand the value of oil because it has units of work stored in it. It also has things like plastics, butyl and medicines stored in it. How much work can gold do? What medicine comes from gold?

I think a real unit of value is good farm land. It can produce life sustaining food. They aren't making more of it either as the population grows. I understand the value of good farm land but not at all gold.

I was raised as a rancher and I get it how the farm or ranch produces new wealth in the form of crops and animals. I don't understand how gold produces new wealth. Just as a new farm tractor depreciates but oxen or horses or mules for plowing actually reproduce themselves (can a John Deere do that?) multiplying and bringing new wealth, I see gold as a depreciating asset. It's a lump that can't produce anything new including reproducing itself like a good milk cow can.

Cheers

" The bankers I've known are just people, believe it or not. "

It seems like you are implying they are ordinary folks. But they are " just people " without any social conscience. How can you go home with these obscene amounts of money knowing it was earned through fraud ?

Deutsche Bank’s $96 Million Banker Bonus at Center of Lawsuit

http://www.bloomberg.com/news/articles/2015-06-18/deutsche-bank-s-96-million-banker-bonus-at-center-of-lawsuit

in principle i agree with you even though i consider the comment "how can you go home with..." as extremely naïve

but i find it strange that you condemn one fraud (LIBOR rigging) because it suits your agenda and applauding another fraud, even call it "admirably" as you did repeatedly when Iceland and its banks defrauded thousands of mainly British and Dutch small investors by defaulting on bonds as well as on cash fixed deposits a few years ago.

Hundreds of thousands of ordinary British and Dutch savers had previously switched their savings into online Icesave accounts, attracted by market-beating interest rates and promises that: "You can also rest assured that with Icesave you are offered the same level of financial protection as every bank in the UK."

When the crash came, however, Iceland's deposit guarantee proved worthless, forcing the UK and the Netherlands to use their own taxpayer funds to compensate ordinary savers and sparking a poisonous diplomatic row.

http://www.theguardian.com/world/2013/oct/06/iceland-financial-recovery-banking-collapse

[midas]

The bankers I've known are just people, believe it or not.

As for the gold, If there is a societal collapse and all fiat money is worthless and as they say, the sh1t has hit the fan, I would think that a pound of bread would be worth more than a pound of gold at the daily exchange. Not once have I ever understood why gold is valuable other than as decorative jewelry and a great electrical conductor for thing like computers. It may or may not even be a hedge against inflation.

Just like fiat money there is an international understanding that gold has value and there is a market function to state a value. But value in what? If fiat money is no good, why would gold be? You can't eat either one nor can you power your car with them. I understand the value of oil because it has units of work stored in it. It also has things like plastics, butyl and medicines stored in it. How much work can gold do? What medicine comes from gold?

I think a real unit of value is good farm land. It can produce life sustaining food. They aren't making more of it either as the population grows. I understand the value of good farm land but not at all gold.

I was raised as a rancher and I get it how the farm or ranch produces new wealth in the form of crops and animals. I don't understand how gold produces new wealth. Just as a new farm tractor depreciates but oxen or horses or mules for plowing actually reproduce themselves (can a John Deere do that?) multiplying and bringing new wealth, I see gold as a depreciating asset. It's a lump that can't produce anything new including reproducing itself like a good milk cow can.

Cheers

" The bankers I've known are just people, believe it or not. "

It seems like you are implying they are ordinary folks. But they are " just people " without any social conscience. How can you go home with these obscene amounts of money knowing it was earned through fraud ?

Deutsche Bank’s $96 Million Banker Bonus at Center of Lawsuit

http://www.bloomberg.com/news/articles/2015-06-18/deutsche-bank-s-96-million-banker-bonus-at-center-of-lawsuit

in principle i agree with you even though i consider the comment "how can you go home with..." as extremely naïve

but i find it strange that you condemn one fraud (LIBOR rigging) because it suits your agenda and applauding another fraud, even call it "admirably" as you did repeatedly when Iceland and its banks defrauded thousands of mainly British and Dutch small investors by defaulting on bonds as well as on cash fixed deposits a few years ago.

Hundreds of thousands of ordinary British and Dutch savers had previously switched their savings into online Icesave accounts, attracted by market-beating interest rates and promises that: "You can also rest assured that with Icesave you are offered the same level of financial protection as every bank in the UK."

When the crash came, however, Iceland's deposit guarantee proved worthless, forcing the UK and the Netherlands to use their own taxpayer funds to compensate ordinary savers and sparking a poisonous diplomatic row.

http://www.theguardian.com/world/2013/oct/06/iceland-financial-recovery-banking-collapse

Don’t be ridiculous! There is no comparison between a newly elected group of politicians making that decision in Iceland following the “ Pots and pans revolution “. They simply listened to what the Icelandic people demanded. Please explain how that can be labelled as being " fraud "?

But I doubt if anyone would have democratically applauded the actions of the banksters lining their pockets knowing the proceeds were gained through criminal activities.

[Naam]

Don’t be ridiculous! There is no comparison between a newly elected group of politicians making that decision in Iceland following the “ Pots and pans revolution “. They simply listened to what the Icelandic people demanded. Please explain how that can be labelled as being " fraud "?

But I doubt if anyone would have democratically applauded the actions of the banksters lining their pockets knowing the proceeds were gained through criminal activities.

you sure have no shame presenting bullshite² arguments to ridicule yourself! defrauding creditors' of money and assets because "the people demanded it from a newly elected government" is justified?

rest in peace little confused man!

[midas]

you sure have no shame presenting bullshite² arguments to ridicule yourself! defrauding creditors' of money and assets because "the people demanded it from a newly elected government" is justified?

rest in peace little confused man!

Don't embarrass yourself Naam

" What Iceland did was right. It would have been wrong to burden future generations with the mistakes of the financial system."

Nobel prize winning economist Joe Stiglitz

" What Iceland’s recovery demonstrated was the … case for letting creditors of private banks gone wild eat the losses."

Nobel prize winning economist Paul Krugman

" Key to Iceland’s recovery was [a] program [which] sought to ensure that the restructuring of the banks would not require Icelandic taxpayers to shoulder excessive private sector losses." THE IMF