Subprime Contagion Is Spreading

People have asked us why we currently do not hold investments in real estate related companies or financial institutions. They also raise an eyebrow when they see how much precious metal and related mining companies we hold. We have been waiting for several years for the credit expansion to reach an end. The following article shows the result one can expect from the credit expansion of the last decade. Our portfolio allocation reflects what we believe is the safest path forward. The central banks of the world adding to the money supply will only enhance the pain. One day maybe we will have someone schooled in Austrian economics running the banks. One can dream...

Aug. 10 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke was wrong.
So were U.S. Treasury Secretary Henry Paulson and Merrill Lynch & Co. Chief Executive Officer Stanley O'Neal.
The subprime mortgage industry's problems were contained, they all said. It turns out that the turmoil was contagious.

Full article:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a.pPEmZeZZCk&refer=home