As you already know by now, Wall Street was rocked by Citigroup announced a 4th quarter loss of $9.83 billion AND a write down of $18 billion. I won’t go into the remainder of the gory details (slashed dividend, slashed workforce) because you can read them anywhere. Instead, I’m here to tell you the story is only going to get worse.
Why?
First of all, I told you so in previous posts on January 10th (Ron Paul says gold has been rigged) January 3rd (Checkmate), November 27th (Mortgage Reset Chart) and November 15th (Google Shows Washington Is Worried). On top of that, if you didn’t believe us, we also had Jean-Francois Tardif (Sprott) and Jim Rogers (Quantum Fund) tell it to you straight from their mouth. If you haven’t read these posts, do yourself a big favor and read them as soon as you can.
Second, if all of that wasn’t enough, the “boo-yah” bull himself – Jim Cramer – is telling you “this is not the end”. Now, he is specifically speaking about Citigroup but does anybody believe the problems at Citi are contained at Citi? Didn’t think so.
So what did Jim have to say? You can watch it for yourself in this 3:40 interview on TheStreet.com today…but here are some of the best quotes:
“Citi is sitting on $40 Billion in worthless paper”
“Their bet on sub-prime is not over yet”
“This is not the kitchen sink”
“This is not the end”
GOLD, GOLD, GOLD
The US economy is in trouble = interest rate cuts = weaker US dollar = higher gold prices = good for gold stocks. It is that simple. The sub-prime pain is yet to come and it is going to hurt, just look at the mortgage reset chart above from November 27th. In the short-term, stocks are going to take a hit – but once investors realize the US problem is beyond manageable, the flight to gold will be fast and furious. It is already taking place now – but we’re still waiting for the masses to come running in.
Short-term blips aside, gold’s day is yet to come.
Regards,
George
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