On the heels of the many bullion banks announcing they are leaving the Comex or greatly reducing their footprint, this is the real reason why the bullion banks are panicking.
KWN has now released an audio interview!
Bullion Banks Panic
May 29 (King World News) – Alasdair Macleod: The Reuters article headed:
“Bullion banks prepare CME pullback after virus snarl” confirmed something we were aware of at the end of March. Reuters cited “nine people familiar with the plans.”
This clearly indicating a number of banks are involved. But to blame it on the virus is a little misleading, because actually what happened is the swap dealers and market makers were heavily short and caught out by central banks suddenly changing their monetary policies to infinite printing.
Nor can we ignore the effect on the banks as a whole. Most bullion operations are trading desks in larger organisations. Senior management see what’s going on and are now terrified of their operational gearing. This is what I wrote on 2 April:
“The strains at a time of contracting bank credit are acute. If they have not been told already, dealers at the bullion banks will be instructed by their financial controllers to reduce their positions, because of the inexorable pull of contracting bank credit in the bank’s wider lending and deposit activities.”
That is really what is behind bullion banks planning to cut their positions on Comex.
Speaking of banks, the European banks are in a mess. If you look at the ratio of assets on the balance sheet to market cap, which is the most realistic way to assess bank risk, we find globally systemically important banks – the GSIBS are incredibly geared. For example, Societe Generale, 129 times, Unicredit, 117 times, Deutsche Bank, 93 times. As Europe plunges into a depression, there will be bank failures. No one is talking of systemic risk yet.
That’s the next shoe to drop, and in my view it is only a matter of weeks.
KWN has now released an audio interview!
***To listen to the timely and powerful KWN audio interview with Egon von Greyerz click here or on the image below.
Bullion Banks Fleeing Comex
***Also Released: Macleod – Bullion Banks Now Fleeing Comex Gold & Silver Markets CLICK HERE.
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