"Deutsche Banks debt is about 20 times more than Germany's GDP and three times more than the whole of Europe."
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Do you see Merkel stand aside, let the meltdown occur then use that as an election campaign to win the next election?
Or maybe she is taking advice from P Schiff who says that the derivative debt must be wiped clean so that Germany economy can start afresh? Does she just tell those who took the opposite side of those derivative insurance that it is too bad and they have to also write off that portion of the exposure? Note, I am assuming these $70 Trillion DBK derivative are CDS.
We are dealing off balance sheet exposure among the banking community. If that happens and the flight to safety assuming it is gold and gold shoots up to $20K oz, what would be the cost of a smart suit? What about a flat white at a cafe or sliced bread? Are currency notes worth more than the wheel barrow to move them?
What are you going to do with your gold=money asset? Law and order or are we using individual right of a Smith & Weson to maintain order a sq meter form thy feet?
No thanks, I rather if that derivative counter party risk exposure is contained. As far as DB is concern, it may be too bad for their share holders/corporate bond holders. Their operations can be bought out by another bank, remaining assets like building crystalised and what's leftover settle with the US DOJ fine. Not sure how Germany will handle this derivative but if they can contain Greece then I am sure there are some band aid solutions.
