Subscribe for 12 months with recurring billing - $199

Buy 12 months of subscription time - $199

 

Search Gold Prices
Gold Price
[Most Recent Quotes from www.kitco.com]
Our RSS Feed

Gold Updates by Mail

Enter your email address:

Follow Us on Twitter
« Gold: Heading for calmer waters! | Main | Inflation or Deflation: Casey Research! »
Wednesday
Apr092008

IMF puts cost of credit crisis at almost $1000bn!

FT.com 09 April 2008

The International Monetary Fund has said that the financial sector faces potential losses of almost $1,000bn as a result of the credit crisis. It has also warned of further loses on prime mortgages, commercial real estate, leveraged loans and consumer finance, according to FT.com.

Jaime Caruana, head of monetary affairs and capital markets at the Fund said:

“The deterioration in credit has moved up and across the credit spectrum,”

In a document entitled: ‘Global Financial Stability Report’ a less than optimistic tone can be spotted when they say, “systemic risks have risen sharply” since October.

We have mentioned this possibility in previous posts, the same people who recklessly loaned funds in the now rocky real estate market have also loaned funds in other equally risky areas. Printing and pumping cash into the system alleviates a liquidity problem, however, it does not address the problem of insolvency, which is the root cause of this financial mess.

Jaime Caruana goes on to say that: “that there had been a collective failure to appreciate the extent of leverage in the financial system” and that balance sheet strains could limit banks’ capacity to lend.

It would appear that the numbers involved will soon be beyond our comprehension. We are in for a torrid time so the flight to a safe haven is likely to continue for some time with gold and its associated mining stocks being one of the main beneficiaries.


Have a good one.

If you do not have any investments in this sector and would like to follow our adventures in gold and associated precious metals mining opportunities then please click here to receive our free investors newsletter.

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments (1)

I couldn't agree more with what he said. I have been aghast at the mismanagement and even abuse of credit for years. And they are still encouraging us to use credit: "Just put it on my tab (credit card, etc)---no payments until next year)"
If you have not got enough money to pay for something, then just ask yourself seriously "do I really need that".
bobi

April 10, 2008 | Unregistered Commenterbobi

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>