CREDIT CRUNCH RISING, DOLLAR CRASHING. WHAT IS WRONG WITH GOLD STOCKS?
CREDIT CRUNCH RISING, DOLLAR CRASHING
The ugly part may be just beginning. Over the past week or two the announcements for write-offs have already become staggering. Merrill Lynch $8.5 billion, Citigroup (between $8 to $11 billion added to a $5.9 billion write down reported earlier) was just the most visible of the losses reported. Here in Canada CIBC wrote off $463 million and counting, while Royal Bank of Canada is purported to be writing off $600 million. Barclays Bank is prepared to write off
upwards of $21 billion. We could go on. Many have not reported, and even the ones that have will undoubtedly have more.
What is going on out there is truly staggering. The Federal Reserve, in an attempt to stem the growing crisis, has injected billions of dollars into the system to stop the bleeding but it has done little to stop the haemorrhaging. The potential for losses is truly unknown. And it is impacting the very financial institutions that are needed to provide the funds to the economy so that it may grow. Quite simply, without credit we die.