Here is a little article that states just how bad the banking system in the States is , and how it pays to have gold.

Bank Losses Drain Deposit Fund, F.D.I.C. Reports

By ERIC DASH

Published: August 27, 2009

Even though financial stocks have rallied nearly 70 percent since the end of March, the Federal Deposit Insurance Corporation issued another grim quarterly report Thursday on the health of the nation’s banks.

The agency reported that the banking industry lost $3.7 billion in the second quarter amid a surge in bad loans made to home builders, commercial real estate developers and small and midsize businesses. Its deposit insurance fund dropped 20 percent, to $10.4 billion, its lowest level in nearly 16 years. And the number of “problem banks” increased to 416, from 305 in the first quarter, and is expected to remain high.

Indeed, federal officials warned that while the economy and financial markets were showing signs of improvement, the banking sector was unlikely to rebound soon.

“These credit problems will at least outlast the recession by a couple of quarters,” said Sheila C. Bair, the F.D.I.C. chairwoman. “Cleaning up balance sheets is a painful process that does take time, but it is absolutely necessary to the industry’s sustained profitability.”

The dismal report shows how the industry’s problems have spread. A handful of the biggest banks were among the first to suffer big losses nearly two years ago from complex mortgage assets and other securities, but have posted strong trading profits in the last two quarters.

Still, most of the nation’s 8,195 banks primarily make their money from lending to consumers and businesses. They are now facing increased pressure from soaring loan losses and higher deposit insurance costs as the F.D.I.C. seeks to shore up the industry fund.

So far, 81 banks have failed this year, including 45 in the second quarter. That, in turn, has put enormous stress on the government’s deposit

insurance fund, which is supported by fees charged to the banks regulated by the F.D.I.C. Its second-quarter reserve of $10.4 billion compares with $45.2 billion a year earlier.

Most of the decline comes from money that the agency has set aside to cover the cost of bank failures, and Ms. Bair said the fund had ample resources to cover all insured depositors.

But the levels are so low that F.D.I.C. officials said Thursday that they would consider imposing a special assessment on the banks, on top of elevated insurance fees, toward the end of the third quarter. Through similar actions, it added about $9.1 billion. It also will begin to recover some money by selling the assets of banks that it seized.

Ms. Bair said she did not anticipate having to immediately tap an emergency credit line run by the Treasury Department, although she did not rule it out. “I never say never,” she said. The F.D.I.C. quarterly report came after a similar release by the Office of Thrift Supervision on Wednesday that showed savings and loan associations eked out a $4 million profit, the first time the sector posted positive results since the fall of 2007. Still, the number of “problem thrifts” rose to 40, up from 17 a year earlier.

The savings and loan industry “is not out of the woods yet,” said John E. Bowman, the acting director of the office.

Federal banking regulators are bracing for hundreds of small and medium-size banks to collapse in the coming months. Banks are burdened with billions of dollars of bad loans made over the last few years and are continuing to set aside more money to cover losses. In fact, credit loss rates reached a record high in the second quarter.

Over all, banks charged off $48.9 billion, or 2.55 percent of assets, nearly twice the levels the industry reported last year.