An article in AFR just now suggests banking turmoil in USA is...

An article in AFR just now suggests banking turmoil in USA is far from over which would be good for gold. The comment below about falling real estate values is a key issue for banks. I expect POG to continue to be volatile for some time.

Key points from the article are:

- Janet Yellen held a meeting on Friday with all the banking regulators about the banking crisis - no details are available about the meeting

- heads of the big US banks realise that even if are savvy enough to realise whether or not First Republic survives it still would not solve the US banking crisis as further bank collapses are virtually inevitable

- most of the 4,000 banks are small and medium-sized and they account for more than two-thirds of US commercial real estate lending. These banks are coming under huge pressure as rising interest rates cause property valuations to weaken, and as worried depositors increasingly withdraw their money.

- To compensate for leakage of deposits, and to brace themselves for future deposit flight, US banks are continuing to borrow from the US central bank at levels not seen since the global financial crisis.

- bank customers, and investors, are increasingly nervous about the fragility of US banks, and the smaller, regional lenders

- US banks have a total capital buffer of $US2.1 trillion - a recent academic paper, total unrealised losses sitting in the US banking system – on their combined loan and bond portfolios – amount to a staggering $US2 trillion - thus wiped out the banking systems capital - wow! Not sure if this allows for interest hedges that sone banks use (I suspect not but don’t know if I am right - if I am wrong then there is a massive banking problem in USA)