The number of problem U.S. banks and thrifts on an official watchlist rose sharply to 416 in the second quarter of 2009 from 305 in the prior quarter, as the industry recorded a $3.7 billion loss.
I recently posted my guess that the FDIC's activation of its Treasury line of credit would push the U.S. government further toward a failed bond auction. The near future will reveal whether I'm correct. Of course, the Treasury can always force its primary dealers to buy bonds if they're convinced the Fed will keep funding the loan facilities that make those purchases possible. This must be Treasury's much-discussed "Plan C" to save the nation from the next phase of its slow-motion financial collapse. That means inflation. That's why I own gold.
