Friday, October 21, 2016 by Mary Wilder
It should come as no surprise that there are some serious financial problems plaguing the world today. One look at the global economy and it’s clear that things are not desirable for anyone in today’s climate. There’s just too much uncertainty and too many economic woes for everyone out there. Even if you are lucky enough to have a considerable amount of wealth, if there’s anything we have learned over the course of the past year, it’s that we are living in unpredictable times. Things have a way of sneaking up on all of us.
Deutsche Bank — the largest bank in Germany — has ended up firmly in the middle of a massive economic disaster. With negative interests rates making it difficult for the bank to make any profits, things are looking extremely grim for them.
Geoffrey Smith of Fortune reports, “The U.S. government is considering imposing a fine of around $14 billion on the bank for selling faulty mortgage-backed securities in the run up to the financial crisis … In all, Deutsche Bank’s DB 1.35% market cap has now shrunk to nearly its proposed fine, provoking fears that the bank might have to be helped out [by] the German government, or be wiped out.”
The failure of Deutsche Bank could very well kick off a string of events that leads to a full-scale collapse of society in Germany, with implications all across Europe and — subsequently — the world. When nations fall, it has a way of negatively effecting nations across the world, and given the current state of affairs all across the globe, there’s no denying that things could be devastating for us all if the bank collapses.
Of course, that appears to be exactly what’s going to happen, and we should all be paying close attention to the news in Germany. If the theorists are correct, and a mere 1% move in the derivatives market sets off a global wipeout, then we all need to be prepared for the horrific consequences. The last thing any of us want is to think everything is okay only to discover that everything is a complete mess.
Given that Americans are notoriously bad at saving money, perhaps the fall of Deutsche Bank will inspire us folks in the Land of the Free to consider the possibilities of being smarter with our finances and start investing in things that will pay off in the long run. It could be a matter of life and death before we know it.