Systemic Financial Crisis and Its Implications for Gold

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Further deterioration of the Fed's balance sheet will cause continued weakness in the US dollar and contribute to the already super bullish fundamentals on gold...

The cyclical bear market in equities, which is around 6 months old, is still far from being over. Problems caused by the real estate bubble, which are now permeating throughout the entire US economy, cannot be solved quickly.

The fact that the real estate contagion has caused a severe infection of the entire US financial system is now finally being widely admitted by Wall Street. This realization is well reflected by how the labeling of the crisis by the media evolved over the past year: from a Subprime Crisis in early 2007 to a Liquidity / Credit Crisis¯ in summer 2007 to a more recent Solvency Crisis and now finally to a Systemic Crisis.

A Systemic Financial Crisis requires a solution that will not take months but rather several years...

Further deterioration of the Fed's balance sheet will cause continued weakness in the US dollar and contribute to the already super bullish fundamentals on gold...

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