This article was written by Michael Snyder and originally published at his Economic Collapse blog.
Editor’s Comment: Those of us who’ve been around for the long run knew that a big currency crash was coming. The assumption was that the big event would center around the dollar losing its world reserve status; but what if that only comes in tandem with EU disintegration, trouble in the Chinese economy and continued disruptions in price for oil and other commodities.
There are many scenarios that can play out, but one this is clear: currencies are not stable, and they are not invincible. Whether there is a larger plan at work, or there is just turbulence for Britain and European banks, major financial decisions are determining the future as we speak.
“Currency Crash” Drives British Pound To 31 Year Low, Deutsche Bank Sinks To Lowest Level Ever
by Michael Snyder
The fallout from the Brexit vote continues to rock the European financial system. On Wednesday, the British pound dropped to a fresh 31-year low as confidence in the currency continues to plummet. At one point it had fallen as low as $1.2796 before rebounding a bit. As I write this, it is still sitting at just $1.293. Meanwhile, the problems for the biggest banks in Europe just continue to mount. At one point on Wednesday Credit Suisse hit an all-time record low, and German banking giant Deutsche Bank closed the day at an all-time record closing low of 12.93. Overall, Europe’s Stoxx 600 Bank Index closed at the lowest level in almost five years. What we are watching is a full-blown financial meltdown in Europe, but because it is not personally affecting them yet, most Americans are not paying any attention to it.
The collapse of the British pound that we have seen since the Brexit vote has been nothing short of breathtaking. In fact, CNN says that this “is what a currency crash looks like”…
This is what a currency crash looks like. The pound has slumped to $1.28, its lowest level in more than three decades.
Investors are dumping the pound following Britain’s vote to leave the European Union on June 23. The pound has dropped roughly 15% since the referendum day, when it reached $1.50.
After appearing to stabilize, the pound resumed its decline this week after three big asset management firms halted withdrawals from real estate investment funds.
Of course this is likely only just the beginning. There are some analysts that are suggesting that the British pound could eventually hit parity with the U.S. dollar at some point. We are seeing seismic shifts on the foreign exchange market right now, and this is going to affect trillions of dollars worth of currency-related derivatives. It will be exceedingly interesting to see how all of this plays out.
Meanwhile, Deutsche Bank continues to get absolutely hammered.
If the biggest and most important bank in Germany is not completely imploding, then why does the stock price continue to crash time after time?
Since the start of 2016, the value of Deutsche Bank has fallen by half, and many have pointed out that the trajectory that it is on is very, very similar to Lehman Brothers in 2008.
My regular readers are probably sick and tired of hearing me warn about Deutsche Bank, so today I will let someone else do it. According to an article that was just published by the BBC, Deutsche Bank is now “the most dangerous bank in the world”…
Deutsche Bank shares hit a new record low today. It’s value has halved since the beginning of the year.
So is it now the most dangerous bank in the world?
According to the International Monetary Fund – yes.
Last week, the IMF said that, of the banks big enough to bring the financial system crashing down, Deutsche Bank was the riskiest. Not only that, Deutsche Bank’s US unit was one of only two of 33 big banks to fail tests of financial strength set by the US central bank earlier this year.
At this point Deutsche Bank is scrambling to raise cash to stave off an imminent implosion. Just today, I came across a report about how they plan to sell at least a billion dollars worth of shipping loans in order to bring in some much needed funds. Many of the steps that they are taking are reminiscent of what Lehman Brothers tried to do just prior to their collapse, and that alone should tell you something.
Michael T. Snyder is a graduate of the University of Florida law school and he worked as an attorney in the heart of Washington D.C. for a number of years.
Today, Michael is best known for his work as the publisher of The Economic Collapse Blog and The American Dream.
If you want to know what is coming and what you can do to prepare, read his latest book [amazon text=Get Prepared Now!: Why A Great Crisis Is Coming & How You Can Survive It&asin=150522599X].
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So tell me why the FTSE is up everyday and the DAX has been sinking? For that matter why is the DOW up?
BigB
“financial engineering” …stock prices no longer have anything to do with “fundamentals”, like price to earnings ratios and book to value….it’s all “controlled” by the central banks….until they LOSE that control, of coarse….it’s COMING….don’t BANK on it!….michael has been pounding the table on dirivitives for YEARS, and he’s about to be RIGHT, in SPADES…..sorry we had to break the news to you, america(ns)….we’re ALL turd-world NOW.
There was never any market justification for a pound that was once 2.2 to the dollar as I remember. With a manufacturing base that was moved offshore decades ago, the only jobs in the UK are in banking, financial services, and tourism.
Tourism will flourish if the Brits can control Jihad. 🙂
Michael Snyder = FEARPORNER
Brexit is not legally binding since it requires the assent of the British Parlament in order for the office of the Prime Minister to invoke Article 50 of the Treaty of Lisbon (that referendum was solely designed to keep distracted the ignorant masses).
Now gullible and stupid animals, go ahead and buy Snyder’s garbage.
thank god for “fear porn”!…maybe he can waken SOME of the simpletons of the world.
Look the Brits leaving the EU, and its Currency falling is like having to have surgery on you knee. (something I know well have had several. Too much sports (NOT)) The knee was messed up and I went to the Doctor and he told me that it has to have surgery done to it. Like the Brits leaving the EU. It was surgery. It will take time to heel and when it does it will be as good as new.
The Brits will get though it and be better than ever. Just give them time.
Sgt.
British currency is dropping not failing.
In the current environment the UK has a reasonable balance of trade. With the pound falling their exports are hugely attractive while the falling pound makes their debt easy to pay off with cheap UK pounds.
In the scheme of things globally their economic position is envious.
The market is playing vegas.
Nothing to worry about holding physical silver. Sure it’s taking a pause. Its up a whopping 31% from the lows last Nov at $13.67. Break open a bottle of champagne and celebrate. Still a double your money in one year at $20 per OZ. $40+ next year. I’m not selling any until it hits in the $40 range. And only selling the any of my orig investment and keep the rest for the $100 OZ bonanza.
Stay tuned.
-WWTI…
All being engineered, they make money on the downside by shorting, then they make money after buying low then selling high.
Its all controlled for the Bankster Elites benefit!
This whole crisis is a setup.
The British pound isn’t worse than the euro. It’ll bounce back eventually. Right now it’s forcing a lot of money into precious metals.
Deutsche Bank could start a chain reaction of bank failures at any time. Jim Willie said that the net worth of DB is -$1 trillion.
It’s not a currency crash. What’s happening in Venezuela is a currency crash.
Markets are all flat or dropping, they are all dreading the Friday employment report.
Unless the employment report is a complete fiction, it will crush the markets. With Obama’s destruction of the coal and fracking industries, unemployment just keeps spreading like a disease.
All those job losses in the coal and fracking industries, which are also continuing to rise, are now causing secondary job losses in the service sector that those unemployed no longer can afford. Continuing layoffs across the entire country are ominous signals of a massive recession.
Gold and silver are down pretty good today, but that may just be profit taking since those commodities have risen so massively in the last few months.
my friend the land-fill manager will have to disagree with you….when he’s processing HALF the normal volume of trash, it’s DEPRESSION time…many retailers have closed, and as a reminder, i went to hobby people yesterday to get some parts for my son’s R/C car, and the place is almost BARE…LOOKS like they are out of business soon.
… excellent monitor!!!!
Exactly, I’m not disagreeing though I did play reality down.
The other day, when Obammy was campaigning for Hillary, he reinforced how wonderful the economy is because of his policies.
If he won’t admit to recession, let alone Obama or the Fed admitting to a depression on their watch?
The next president is going to get handed a shit sandwich with a side of extra dog shit, and a goose shit salad.
I’m sorry if I played it down. You are correct, we are in a depression death spiral. Only the half of America unemployed, hungry and worse admit it. The rest just cover for the lying commie pinko progressives.
I met a woman, my nieces freind, that took the last couple hundred dollars of her savings, and bought camping gear to live in the woods with her two small sons for the summer. It’s that bad out there. She won’t tell anyone where she is because family services is hunting for her. A summer of camping with the kids is apparently verboten in Amerika.
it’s easy enough to see the depression, when you look at the price of gasoline, also…the collapse in price is because demand has collapsed. if people aren’t working, they don’t drive nearly as much…the signs are everywhere. hell, i ride my bike about 8 miles, and i see DOZENS of homeless people in that one hour’s ride. i remember karl denninger saying we would call a depression if we stripped out of the GDP all the money-printing and borrowing we’ve done for DECADES now. my apologies for attacking you, plan, but i saw an opportunity to set the record straight.
BCoD,
No offense taken. Preppers are usually forward thinking people, prepared to lead through problems. The world is crumbling, but preppers are generally better off at making do or handling those problems. We operate from a comfort zone most people don’t have, and we can end up with a snarky attitude.
Take HCKS for example, he says he did get T-Boned by life once already and that is why he’s an active prepper now. He says he’s doing his best to not get blindsided ever again. A place all preppers want to be.
I pity the sheeple who are clueless and get T-Boned by every little problem the powers that shouldn’t be are hitting us with.
well, hcks won’t have to wait too long now.
Food for thought —> http://www.lrb.co.uk/v38/n08/john-lanchester/when-bitcoin-grows-up
The pound dropped 40% during the 2007/2008 crash. The plan all along has been to get to parity with the dollar and the Euro. And the pound is merrily heading that way. At some point, when the pound is equal to the dollar and the euro, all these currencies will be harmonized in some form.
Brits are over-valued as it is; the housing is poor quality, they barely make anything of value, and their financial services are not only thoroughly corrupt, they are really crappy to deal with. As for the pot-bellied, baldy, poorly behaved, drunken population, meeh…
Turn the whole place into a slave plantation, pay them 10 dollars a day, and flood it with cheap Muslims: then we can call it good and done.
Frank:
England was a great Country until the traitor, Winston Churchill, destroyed it.
Churchill represented the interests of the j**s, the Rothschilds. Your last paragraph is priceless.
It is exactly the plan for England, America, every Country where white Caucasan people reside. Perhaps it is time for a solution, a FINAL SOLUTION.
I agree, it is the fault of the bankers, who have drained the country of its manufacturing base and left much of the country to rot. It is time they are forced to invest in the country and not just chase scams overseas. The sad fact is this: they inflate the value of housing, borrow against it, and then take the dosh and buy and invest out of the country, while keeping the profits to themselves, usually in off-shore accounts. Britain should be as rich and prosperous as Germany throughout the country. But will never be if they are allowed to keep doing this scam.
This is the similar situation that happened in Germany in 1938. When Hitler woke up the Masses. And Took Germany Back from the Same Banking Criminals the Central Bankers. Wiped off all of Germanys dept to the Bankers. The kicked the out of the country or killed them. Some call it a Holocaust. Others see it as a clensing of a country of parasites. Germany came back stronger than ever with a 98% approval rating by the German people. Winston Churchill was a sellout to the UK and America. A the US was on the wrong side of the war again. That people is why we are in the same situation with piles of debt. Who has the balls to Make America Great Again? I’ll give you one guess.
-WWTI…
It is a race to the bottom for all world currencies.
The guy with the weakest currency can pay off his debt with minimal printing.
The US dollar is the “run to” currency, a strong dollar makes Obama’s debt really expensive. The Brexit vote reinforced the dollar as the go to currency. Americans need to stock up on food. It ain’t gonna get any better than it is.
Sounds like a big mess coming with no reasonable solution except carry on. Too much money in too few hands? Too many people? Too many living outside in a cardboard box covered with plastic existence with no bills to pay? Who knew youth was the good old days? Except if you are young today. People can’t miss what they never had, the perfect solution.
This is what being punished by the (((international banking cartel))) looks like.
Currency crash? Not so much.
Its not about the cartel. External debt is the total public and private debt owed to nonresidents repayable in internationally accepted currencies, goods, or services. The UK has one of the highest External debt ratio to GDP on the planet. According to Forbes “…The UK has $4.36 for each $1.00 of GDP. It owes hundreds of billions to Germany and Spain– while its banks are on the hook to Ireland, Italy and Portugal. …”
While the UK was in the euro their were thoughts that Mario Dragi and the European Central bank would provide for them as part of the QE bailouts through march 2017 (and be their rescuer). So the reaction on the fall of British pound is not unexpected in light of the debt and business ties that may come entangled in the brexit…
Oh? now its Churchill’s fault? How far back can we go? first it was Bush’s fault, Churchill. Lets throw in the Catholic church,the Crusades,the Masons. Who have we left out? I call BS!
Jim:
Tony Blair tried for War crimes.
Feel better now.
I see Obama has chimed in on the two latest Police shootings of blacks., No word on the many blacks killed by their peers. Get ready.
Economic collapse, Globalists doubling down, Hillary proving the elites are immune. Race riots, political chaos at the conventions.
It’s going to be a real brutal Dog Days
When will a black person film another black person killing or raping a black person? They seem really prepared to film when it is a white policeman, but never have a phone ready to live stream when some homey lays waste to another homey (something that pretty well happens every minute of every day). It seems killing is cool if it is within the race group.
+1
FT, agreed, That just goes to show how bogus some black people are. They don’t care about what happens in their own communities. They don’t care about other black people like they claim they do.
That video will never be made. Besides, in Chitcongo where 40 something homies are shot every weekend, those vids would be considered too mundane to watch. Where’s Al Sharkton, Rev. ‘Jammin’ Jackson and O’Slippery when all that killin’ is taking place? No where to be found (ain’t no money in it).
The facts are, the Tribe founded the NAACP to create chaos in the US. These same Commie’s are setting up more summer chaos, riots and busing in thousands as paid protestors creating hate instead of uniting America. This will continue until the US sheds these parasites from our shores.
-WWTI…
Frank and brave. Agree with both of u. Been watching the news. Race relations boiling over. Hillary in the clear. Congress voted against Kate’s law. Them dirty morherfucking cocksuckers. Can’t afford it they say. Are you fucking kidding me? This pots gonna boil over. I thank god I don’t live in a big city. Stay safe yall
People protesting in Dallas over the Louisiana shooting. Been some shots fired on the streets. Don’t look good.
Charlie Waite
It’s going to be wonderful.
The pound dropping is a good thing for the UK. It acts as a buffer. In fact, every other nation is rapidly trying to devalue their currency as part of QE. The UK is essentially getting a 10-20% drop without having to do QE. It will make their economy boom provided the EU doesn’t try economic sanctions to punish them.
Snyder sees collapse in whatever metric he looks at. His site is collapse porn and nothing else.
This is what someone who can’t make it as a Washington lawyer looks like.
Watch the bond markets. The stock market is the red cape. The bond market is the sword.
It is sad to see the pound drop. They are eating each other and looting, killing… Not! Even in Venazuela most are being civil. Remeber food and water, clothing, and shelter, bullets for the guns you have. Everything else is gravy. Have knowledge of making thing? If you are industrious great, but if shtf and you have the above you will make it. All you have to do is hole up as long as possible. By the end of year 1 90% will be dead. That is where you will not have issues with “stuff”. Mor than likely you will be dealing with total thugs on one end to those trying to rebuild. Distinguishing between them will be fast and easy. S&W will help a long with your ability to NOT pull the trigger.
Opportunity abounds…when the $HTF
The globalists are going to do every thing in their power to make Briton pay for BREXIT.
“Maybe You Can Reverse Brexit” – Jamie Dimon Chimes In On How To Ignore The Voters
h tp://www.zerohedge.com/news/2016-07-07/maybe-you-can-reverse-brexit-jamie-dimon-chimes-how-ignore-voters
translation?
“let them eat cake”
False flag in Dallas 2 cops shot how ironic right afyer obama speech and got to get the attention off hillary they got all the reg actors and maby a few new ones boy the convention is gonna be wild
False flag? and you would know this how?
It showed the 2 cops supposed shot laying on ground and not a trace of blood
and they would “zoom in” so you could make sure it is real blood? You people with your false flag stuff and conspiracy theories …and they wonder why people call preppers ‘crazy”. It actually is a violent world out there and Bad people actually do hurt others. It doesn’t have to be fabricated. It is real.
off subject….Officers down in Dallas protest. summer is heating up.
I do not care about the value of the pound, i want out of the EU and our borders closed without any excuse
We won the vote and the elite can play with all the numbers they can fix, I WANT OUT, We want a little freedom back in our lives and if that means fighting then so be it.