Saturday, July 18, 2009

The end of the line! Part I – US banks

The number of bank failures in the US this year, so far, is 57 compare with 25 last year. So even if we disregard the 3 bank failures during 2007, the total amount of banks going down during this depression is now 82. The total cost to deposit insurance fund from the failures can now start to be counted in billions. While JP Morgon and Goldman Sachs fiddles with their books and funnels bail-out money to show a nit little profit in a move that would make any cartoon villain green from envy, most of the banks in America are falling down like domino pieces.

One of the “green shoots” we have been hearing about from America is that losses on home mortgages is leveling off, but even if this, in a way, is true; commercial real estate loans remain a hot spot of potential trouble and if the depression keeps on going, defaults on the high-risk loans will go through the roof. Failing banks, failing businesses and stores losing customers means more bankruptcies which in turn mean more defaulting on commercial property. Since many regional banks hold large numbers of those we can soon expect a lot more banks going down when that bubble bursts. So if anyone think that banks in their perticular country is going bad, thats, so far, nothing against the US.

The result of this is not only that the depression continues, it will worsen in the US and since the US still is very important for the world economy and since many US banks have nice little loans and such towards the rest of the world, this is truly apocalyptical, don’t you think? There is also another consequence and that is that there is already talks about and planning for; *drums please* another stimulus round! That’s right, the enemies in Washington are already thinking about printing and loaning more money in order to spread the inflationary dollar out into the system. Even the most hardy democrat or people with deep socialist persuasion will regard such a move with a slight suspicion. Shouldn’t the first one (the biggest spending spree in history of humanity) have helped? But politicians have no choice, they have chosen this path, what do you expect? That they roll over and admit they were wrong and that they spent trillions of dollars for nothing? Pfffff… please. In other words; more stimulus and more bail-out is coming soon. I give the dollar 1 year maximum, before it collapses.

Finally I need to mention the gold and silver manipulations again. Certain financial institutes have been issuing futures contract for gold that supposedly can be settled in shares in an Exchange Traded Gold Fund. Apparently no one really knows if that Exchange Traded Gold Fund holds the equivalent of shares issued in gold. Ever wondered why the price of gold isn’t going up despite trillions upon trillions of newly printed money and a deep recession?

It almost looks and feels planned...

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