The past year has seen its fair share of worries. From the China slowdown to the Brexit, successive waves of overseas fear have rolled onto our shores since 2015, yet none of them were the Tsunamis the bears had predicted.
The latest foreign fear concerns the possibility for a global credit crisis led by the collapse of a major international bank. A simplified summary of this scenario goes something like this: Deutsche Bank is on the brink of bankruptcy and its insolvency could spark a systemic European banking crash. This in its turn could send shockwaves throughout the global financial system, resulting in widespread economic turmoil on par with the previous worldwide crisis.
Commentators who favor this outlook tend to illustrate their dire predictions with a graph of Deutsche Bank’s stock performance since last year. It certainly adds a spark of credence to their argument based solely on the depth of the stock’s plunge.
This post was published at GoldSeek on 8 September 2016.