S&P's fusillade is well-timed to warn Euroland

The agency is right to warn that Euroland's immediate crisis cannot be halted only by policing budgets. There must be debt pooling and a lender of last resort to stop "systemic stress".

The cannon shot across Europe's AAA creditors is a cold reminder that they too are part of the mess. It is well-timed, coming hours after Merkozy again failed to offer any meaningful way out of the impasse.

"Policymakers appear to have acted only in response to mounting market pressures, rather than pro-actively leading market expectations in a way that might have better strengthened investor confidence. The piecemeal nature of this response has helped expand the crisis of confidence in the eurozone," it said.

Christine Lagarde, the International Monetary Fund's chief, was equally dismissive of the Merkozy plan. "It's not in itself sufficient and a lot more will be needed for confidence to return," she said.

The rating agency said a credit crunch is taking hold. Euroland's policies of synchronized fiscal and monetary contraction have pushed the region into recession, and therefore into deeper debt stress. "As the European economy slows, we believe that a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating."

Luxembourg's premier Jean-Claude Juncker called the move "completely over the top and unfair", insisting that Europe is "on the way to solving the debt crisis."

Claims by some that S&P is waging currency warfare are absurd. The agency has stripped America of its AAA. France is in worse shape on the same metrics, including with pension liabilities.

There is much confusion over how rating agencies operate. They measure default risk. The US and the UK have used QE to inflate away debt. This may be stealth default, but S&P deals only with "credit events". These are is less likely for countries with their own central bank that can backstop public debt in a crisis.

The eurozone's combined debts and deficits are lower than the US, but its €23 trillion (£19.7 trillion) banking nexus - three times sovereign debt - is greater. This is a contingent liability.

Eurozone banks have a loan-to-deposit ratio of 1.2, compared to 0.7 in the US. They are much larger, more leveraged, and mostly underwater on EMU bonds if forced to mark to market.

The threat in Euroland comes from a vast edifice of interlocking bank debt and sovereign debt. Each is destroying the other. This will continue until there is a circuit-breaker.

The agency calls on the ECB to act, both a last-resort lender and to halt the slump. "We will analyse the policy settings of the ECB to address the economic and financial stresses now being experienced by eurozone sovereigns.... and in staunching the eurozone's increasing output gap."

In other words, there will be downgrades if the ECB sticks to 1930s policies. It may not be a currency war, but it is a war of economic ideas.

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Relax, central banks can still save us

Even if Europe and America slide back into recession with fiscal deficits already dangerously stretched and interest rates on the floor, financial authorities still have the means to prevent a spiral into debt-deflation.

Whether they have nerve to use those means if necessary, and whether they can overcome deep rifts to act in unison and with overwhelming force, is another matter. It would help if China and other reserve powers stopped sniping from their clay towers. They will suffer just as badly, or worse, if the damn breaks.

Perhaps oddly, I am not as uber-bearish as some at this juncture. It is far from clear to me that the US is crashing into a second slump. While the Philly Fed’s manufacturing index for August was catastrophic at minus 30.7, it is a twitchy index.

Paul Dales at Capital Economics says it flashed false warnings in 1995 and 1998. The US Conference Board’s leading indicators are more reliable. They are signalling sluggish growth.

Andrew Haldane, the Bank of England’s financial stability chief, says global banks have raised equity by $500bn since the bubble burst. They have slashed assets by $3 trillion, and halved leverage ratios from 40:1 to a long-run average of 20:1. “UK and US banks’ cash ratios are at their highest levels for several decades,” he said.

Citizens and firms on both sides of the Atlantic are running a “financial surplus” near 2.5pc of GDP, compared to a 1pc deficit five in 2006. US companies are sitting on $2 trillion in cash. The West is better cushioned this time.

There is much wreckage left, of course. A quarter of US mortgages are under water. A shadow inventory of unsold homes must still be cleared. Detox will be long and painful.

Yet it no longer makes sense to talk of a US housing bubble. The price to incomes ratio has halved to three, among the world’s lowest. Cleveland, Detroit, Cincinnati, and Atlanta are down to 2.4.

But let us concede - as a 'Gedanken Expirement' - that arch-bears are right to fear a full-blown global slump. Are we powerless?

The US cannot easily crank up fiscal stimulus with a deficit already at 10.8pc of GDP (IMF estimate). Much as I admire Nobel Laureate Paul Krugman – vindicated in his prediction that US 10-year bond yields would fall to historic lows – he misuses history to argue that spending on the scale of World War Two could safely lift America out of slump.

Yes, the US pushed public debt above 120pc of GDP to defeat Hitler, and Britain topped 200pc defeating Napoleon. Both countries marched on to greatness, but in each case they were the world’s paramount industrial power.

Who was going to threaten US Treasuries or the dollar in the late 1940s when Germany and Japan were under US occupation, and America accounted for half of global GDP?

Military demobilisation allowed an instant cut in the US budget deficit. Today the rot is structural, a failure to stop health care and ageing costs spiralling out of control.

So with fiscal policy exhausted, the burden must fall on monetary policy. Here we have barely begun to use our atomic arsenal even at zero rates. As Milton Friedman taught us – though nobody in Frankfurt -- it is a fallacy to think that low rates are loose. Zero can be extremely tight.

That may be the case now with US Treasury yields signalling deflation and M2 velocity collapsing as it did pre-Lehman.

To those who argue that the Fed is pushing on the proverbial string, David Beckworth from the University of Texas replies that the Fed showed between 1933 and 1936 that it could deliver blistering growth of 8pc a year despite debt deleveraging in the rest of the economy.

My own view is that Ben Bernanke has strayed from classic Friedman policy, blunting the effect of his two rounds of QE. Under his doctrine of “credit easing” he has steered bond purchases to banks. This has limited effect on the quantity of money.

A Friedmanite would argue that Bernanke has barely tried monetary stimulus. Yet he has greatly eroded his political capital in the process, especially by arguing that the purpose of QE2 was to push up inflation and help Wall Street. These were tone deaf justifications. “Treasonous” is the verdict of Governor Rick Perry of Texas. That was to be expected, but it does complicate matters.

The eurozone obviously needs looser money. M3 broad money is stagnant and real M1 deposits have turned negative, even in Germany and Holland. Real M1 is contracting at an alarming pace in Italy. EMU growth has wilted, five countries are spinning towards default, and the banking system is seizing up. This cries out for a change of course, yet the European Central Bank is still tightening.

The ECB’s Jean-Claude Trichet said “we do not do QE”. Indeed, Germany forbids it. Not only has the Bundesbank forgotten that the Bruning deflation of 1931 destroyed Weimar - not the hyperinflation of 1923 - it is imposing its policy blunder on the whole currency bloc. The visible result of piling monetary contraction on top of fiscal contraction is to push the Club Med over the edge.

The lesson of 2008-2010 is that further QE by the Fed alone risks a dollar slide and a further global crisis. A successful monetary blitz - if required - would need joint action by all major central banks in concert, including the ECB with no 'ifs’, 'buts’, and hostile body language. Some $6 trillion would suffice, or 10pc of global GDP.

We are not there yet. The August squall may pass. US growth may surprise, and China may avoid a hard landing. For all our squabbling, we still live in a benign world where ships and capital move freely and leaders talk to each other.

Remember what the world looked like when Franklin Roosevelt moved into the White House in March 1933 and shut down the US banking system.

The front page of the New York Times on his first Monday in office announced: "Hitler Bloc Wins A Reich Majority, Rules Prussia"; "Japanese Push On In Fierce Fighting, China Closes Wall, Nanking Admits Defeat"; "City Scrip To Replace Currency"; "President Takes Steps Under Sweeping Law of War Time"; "Prison For Gold Hoarders".

That was a serious situation.

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Should the Fed save Europe from disaster?

Unless Germany agrees to the full mobilization of the European Central Bank very fast, the eurozone will spiral out of control. As The Economist put it, “The risk that the currency disintegrates within weeks is alarmingly high.”

Theoretically, EMU can limp on though the Winter until the Italian debt auctions of €33bn in the last week of January, and €48bn in the last week of February. The reality is that sovereign contagion to the financial system may well bring matters to a head more swiftly.

If break-up occurs in a disorderly fashion, with Club Med states and Ireland spun into oblivion one by one, the chain reaction will cause an implosion of Europe’s €31 trillion banking nexus (S&P estimate), the world’s biggest and most leveraged. This in turn risks an almighty global crash – first class passengers included.

So the question arises, should the rest of the world take over management of Europe to prevent or mitigate disaster? Specifically, should the US Federal Reserve assume leadership as a monetary superpower and impose policy on a paralyzed ECB, acting as a global lender of last resort?

In essence, the US would do for EMU what it did in military and strategic terms for the Europe in the 1990s when Washington said enough is enough after squabbling EU leaders had allowed 200,000 people to be slaughtered in the Balkans. The Pentagon settled matters swiftly with “Operation Deliberate Force”, raining Tomahawk missiles on the Serb positions. Power met greater power.

Personally, I have not made up my mind about the wisdom of a Fed rescue. It is fraught with dangers, and one might argue that resources are better deployed breaking EMU into workable halves with minimal possible damage.

However, debate is already joined – and wheels are turning in Washington policy basements – so let me throw this out for readers to chew over.

Nobel economist Myron Scholes first floated the idea over lunch at a Riksbank forum in August. "I wonder whether Bernanke might not say that `we believe in a harmonized world, that the Europeans are our friends, and we know that the ECB can't print money to buy bonds because the Germans won't let them. And since the ECB will soon run out of money, we will step in and start buying European government bonds for them'. It is something to think about," he said.

This is not as eccentric as it sounds. The Fed’s Ben Bernanke touched on the theme in a speech in November 2002 – “Deflation: making sure it doesn't happen here” – now viewed as his policy `road map' in extremis.

"The Fed can inject money into the economy in still other ways. For example, the Fed has the authority to buy foreign government debt. Potentially, this class of assets offers huge scope for Fed operations," he said.

Berkeley’s Brad DeLong said it is time for Bernanke to act on this as the world lurches straight into 1931 and a Great Depression II. “The Federal Reserve needs to buy up every single European bond owned by every single American financial institution for cash,” he said.

The Fed could buy €2 trillion of EMU debt or more, intervening with crushing power. The credible threat of such action by the world’s paramount monetary force might alone bring Italian and Spanish yields back down below 5pc, before one bent nickel is even spent.

One presumes that the Fed would purchase both the triple AAA core and Club Med in a symmetric blast of monetary stimulus across the board, avoiding the (fiscal) error of targeting semi-solvent states. In sense, the Fed would do quantitative easing for the Europeans, whether they liked it or not.

David Zervos from Jefferies has proposed an extreme variant of this, accusing Germany’s fiscal Puritans of reducing Europe’s periphery to “indentured servants” and driving the whole region into depression with combined fiscal and monetary contraction.

“We in the US need to snuff out these sado-fiscalists and fast, they are a danger to the world. The US can force monetisation at the ECB. We should back up the forklift and buy Euro area bonds. Lots of them,” he said.

Some of the purchases could be achieved by tapping the Fed’s euro account at the ECB, flush with funds as a result of currency swaps provided by Washington to help Europe shore up its banks. Ultimately mass EMU bond purchases would cause a sudden and potentially dangerous spike in the euro against the dollar. There lies the rub. If the ECB failed to loosen monetary policy drastically to offset this, the experiment could go badly wrong.

A pioneering school of “market monetarists” - perhaps the most creative in the current policy fog - says the Fed should reflate the world through a different mechanism, preferably with the Bank of Japan and a coalition of the willing.

Their strategy is to target nominal GDP (NGDP) growth in the United States and other aligned powers, restoring it to pre-crisis trend levels. The idea comes from Irving Fisher’s “compensated dollar plan” in the 1930s.

The school is not Keynesian. They are inspired by interwar economists Ralph Hawtrey and Sweden’s Gustav Cassel, as well as monetarist guru Milton Friedman. “Anybody who has studied the Great Depression should find recent European events surreal. Day-by-day history repeats itself. It is tragic,” said Lars Christensen from Danske Bank, author of a book on Friedman.

“It is possible that a dramatic shift toward monetary stimulus could rescue the euro,” said Scott Sumner, a professor at Bentley University and the group’s eminence grise. Instead, EU authorities are repeating the errors of the Slump by obsessing over inflation when (forward-looking) deflation is already the greater threat.

“I used to think people were stupid back in the 1930s. Remember Hawtrey’s famous “Crying fire, fire, in Noah’s flood”? I used to wonder how people could have failed to see the real problem. I thought that progress in macroeconomic analysis made similar policy errors unlikely today. I couldn’t have been more wrong. We’re just as stupid,” he said.

Needless to say, reflation alone will not make Euroland a workable currency area. Nor will fiscal union, Eurobonds, and debt pooling down the road.

"Even if they do two years of fiscal transfers, and the ECB buys all the bonds, and the problems are swept under the carpet, we are still going to be facing a crisis at the end of it," said professor Scholes.

None of the “cures” on offer tackle the 30pc currency misalignment between North and South, the deeper cause of this crisis. What Fed-imposed QE for Euroland can do is make a solution at least possible stoking inflation deliberately.

This means inflicting a boomlet on the German bloc, while allowing the South to take its fiscal punishment without crashing further into self-defeating debt deflation. It forces up prices in the North, compelling the neo-Calvinists to accept their share of the intra-EMU price readjustment.

The Germans will not like this. If inflation causes them rise up in revolt and leave EMU to the Latins, so much the better. That is the best solution of all.

What we know for certain is that Europe’s current policy settings must lead ineluctably to ruin and perhaps to fascism. Nothing can be worse.

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Pressure on the ECB grows as Mario Monti rides to rescue

The "halo effect" of Mr Monti helped bring Italian bond yields back from the brink of a catastrophic spiral on Friday but the gains are likely to be tested again as the new team faces the stark reality of Italy's fractured politics.

"The ECB must make it clear that it will not allow Italy's bond yields to rise above 5pc, however much it costs," said Thomas Mayer, chief economist at Deutsche Bank.

He described the current policy of half-hearted bond purchases as "a recipe for failure", signalling to markets that the ECB is not willing to see the job through with overwhelming force.

Britain's Business Secretary, Vince Cable, echoed the calls for bolder action, blaming the ECB's passive stand for the dramatic escalation of the crisis last week that pushed Italy's €1.8 trillion to brink of meltdown and spread contagion to France.

"The central bank has to have unlimited powers to intervene to support economies, and indeed banks, to prevent collapse," he told the BBC.

"It's very clear that in addition to the disciplines that the southern Europeans are going to have to adopt, the Germans are going to have to play their role in supporting the eurozone. That's either directly or through the central bank, making absolutely sure that the big countries that are subject to speculative attack are properly supported with adequate liquidity."

The EU's €440bn rescue fund (EFSF) is supposed to take the baton from the ECB so it can step back, but the fund is not yet ready and is itself struggling to raise money at a viable cost.

The replacement of Mr Berlusconi with a credible leader committed to the deep reforms demanded by the EU makes it much easier for the ECB to justify help for Italy, but it is far from clear that the bank is willing to give Mr Monti a "dowry" of lower borrowing costs to lighten his task.

Jens Weidmann, head of Germany's Bundesbank and a pivotal ECB governor, has further dug in his heels against any extension of bond purchases.

"We have a mandate and we have to stick to our mandate. Fixing an interest rate for a country is certainly not compatible with our mandate," he said over the weekend.

"The eurosystem must not be a lender of last resort for sovereigns because this would violate Article 123 of the EU treaty. I cannot see how you can ensure the stability of a monetary union by violating its legal provisions."

Investors are betting on a torrid relief rally across global asset markets this week on hopes that new leaders in Italy and Greece will at least break weeks of deadlock, but it is already clear that politics will remain messy.

Mr Berlusconi warned that his People of Liberty Party intends to exercise a de facto veto in Italy's Senate, maintaining its grip on power behind the scenes.

"We are ready to pull the plug," Mr Berlusconi allegedly told supporters. He aims to block any form a wealth tax or bank account levy.

Mr Monti faces a difficult task, forced to work with shifting alliances and bitterly opposed parties on one issue at a time.

"We won't give you a blank cheque," said Umberto Bossi from the Northern League.

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Price of gold like a crisis

There is still scope for gold to outperform, as the price adjusted for inflation is medium off the coast of its peaks 30 years ago. Photo: ALAMY

"Gold is likely to record highs if disorder continues," said Adrian Ash, Director of research at the tomb of Bullion, which holds more than $billion (621 m £) gold for customers.

At $ 1 405, the price is already closing in on his record of $1,423.75, struck on 6 December last year.

"Gold is a form of insurance crisis, which retains only pay", said Mr. Ash. "If you have purchased at Northern Rock began to crumble you would have doubled your money now.". He kept payment as an assurance of crisis for the past four years. »

Indeed, the final nail however big shares some similarities with the situation in which the world is now.

"There are interesting with 1980 historical comparisons when the tanks went in Afghanistan and he was weak leadership in the United States," said Mr. Ash.

"Back then us also saw outbreak of oil prices and inflation, making the sound events today very similar to the last time really succeeded gold medal."

But there is always place for outperformance, as the price adjusted for inflation is always medium off the coast of its peaks 30 years ago. He hit $ 850 an ounce in January 1980, which is something of the order of $2 250 when adjusted for inflation. If the 1980s are really return, or much beyond a run.

Capital Economics, headed by economist and Telegraph columnist Roger Bootle, scheduled in December that gold could hit $ 1,600 in 2011 and reach $2,000 at the end of 2012.

"We are more positive on gold". A firmer dollar, fears of inflation if feather and large appetite for risk may be limited in the coming months. But the price of gold should continue to be supported by demand for shelter with other possible economic and financial shocks Capital Economics said.

However, it is political unrest driving the price higher than at the present time - is a very political metal. "Buying gold is always a political investment because you are essentially disengagement of the monetary system of the world," said Mr. Ash.

With the money continues printing via quantitative easing to the United States, many lose faith of global currencies. It is not just investors who are frightened by printing crawling of money by the Fed or investors concerned by inflation are turning to gold. Central banks are too.

Earlier this month, the World Gold Council revealed that central banks became net purchasers of metal in 2010 for the first time since 1988. Until 2009, the central banks had been unloading their reserves of gold, believing he could go no higher, but things have changed.

Historically, Western Governments had been holders of gold, but now central bankers in emerging markets more and more purchase in the history of gold.

"Emerging nations which have not historically supported their gold coins and therefore have not acquired vast holdings of the metal are redressing the situation," said Daniel Major, an analyst with metals at RBS. "The trend is characterized by Russia, where purchases are planned to continue to 100 tonnes per year, having bought 135 tonnes last year."

China began to purchase of its massive holdings of debt denominated gave substantial currency of the country risk in its reserves. The most recent American finance figures show that China held almost $892bn we obligations.

"China's gold reserves had tonnes at end of 2010 represented 1. FP7 just to forex total reserves", said Mr Major. It would be surprising that the Chinese did not wish to diversify their reserves more.

There are several ways to play the price of gold - take the physical metal exchange funds shares traded. The price is likely to remain volatile but high, therefore equities are a good way to play the merchandise. You invest in gold companies that have production, but also the possibility of increasing their production or reserves.

Whenever you turn on the TV, you can find another reason to buy gold. It seems that crises just won't go away.

Discover the best sale ISAs and get 0% commission when you order online with Telegraph ISA-Fund supermarket.

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Questor share Tip: Sports Direct defined benefit packed sports calendar

First of all the retailer successfully refinanced its banking arrangements in an establishment not guaranteed for three years. He also stated that the Serious Fraud Office is not scrutinize individuals related to the company operations between Sports Direct and rival chain JJB Sports. The last bit of news means that the last remaining part of an ongoing investigation on the Sports Direct is now complete and that the company is clear.

The ads removed two questions which had been suspended over Sports Direct recently and have been retained its assessment. Even though the shares have risen 1.8-182 p, we believe that they are worth picking up.

Analysts applauded the news. Singer Capital Markets increases its price target on Live Sports of 173 percent to 190 percent to reflect a stronger multiple targets. Singer, said: "the announcements should see shares advance, while the actions are of 12 5pc in 4 weeks, in contrast with the rest of the sector (down 6 4pc)", perhaps for all or part of this new"."

The company took a ride tricky in terms of its relationship with the city as it floated at 300 p per share in 2007. However, relations with the Square Mile improved much these days. Sports Direct is commercial as well. Total sales at the chain increased by 21 1pc in weeks 13 to 23 January.

The shares had been trading on a 2011 coefficient of 11 times, a slight discount to the rest of the retail Midcap sector. It is passed to both 11.5 yesterday reflecting better prospects suite Sports Direct news. This is in line with other retailers Midcap.

Sports Direct has a ready market. He sells cheap of sports equipment and clothing brand, and therefore has a strong crossover fashion-sports. Rival chain JD Sports Fashion is, as its name suggests, more than one player mode, while JJB Sports is thus helping to sort out its own domestic woes at the time where it cannot be seen as a serious rival. This is likely to change in the medium term, but now live Sports has the field to itself.

18 Months is a period of bumpers for the sport. The World Cup of rugby, the European Championships in football and, of course, the Olympics take all place, which should help the Sports Direct.

The stack "it high sell cheap" stores may not be to the taste of each, but the shares worth Border away. Purchase.

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Private investors hit by the disruption of markets

Retail holdings hit £ 233bn late February, the most since November 2007, according to a quarterly survey on the records of the UK shareholders.

People with money to invest are tributary to the shares, held the weakness of the rate of return of traditionally safer holdings of bonds and cash and the precarious state of the real estate market. This means that UK plc share held in the hands of the sale at the retail amounted to 11 8pc, to its highest level since the summer 2009.

However, since the data was overloaded, some £ 16bn was completely off the coast of portfolios of private investors in the wake of the tsunami of the Japan.

Half of the who has since recovered but the risk the agitation of the Middle East and oil prices could prove a major stumbling block.

"The disaster in the Japan shows how far freak events can change the whole picture," said Charles Cryer, CEO of the registrars of the capita, compiled the figures.

Discover the best sale ISAs and get 0% commission when you order online with Telegraph ISA-Fund supermarket.

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Riots in the Egypt on the global markets for rock.

Disorders of Egypt saw investors scramble gold, a hole from traditional bolt in uncertain times Photo: Reuters

In London the FTSE 100 fell 1. 4pc, as did the ACC in France, then in Wall Street, the Dow Jones has been offshore 1. 4pc despite the improvement of the economy in the last quarter of last year. The stock market in Cairo, which fell 17pc this week has been closed on Friday.

Disorders of Egypt saw investors scramble gold, uncertain times traditional bolt hole. The spot price rose 1. FP7 in New York, after the closing of $ 7 to $ 1,342 in London. Oil edged closer to $100 per barrel, with Brent climbing $2.03 at $99.42-the highest settlement since September 26, 2008.

The dollar benefited too, strengthening of the euro and pound, assisted by the American economy moving into overdrive in 3 months 2010 with an acceleration of growth that the Federal Reserve will hope feeds off itself.

The United States, the largest export market only for businesses in the UK, has seen its economy expand at an annual rate of 3 2pc in the fourth quarter, place 2 FP6 the quarter preceding, but slightly below the 5pc 3 of forecasts.

"We can comfort from the fact that many of the signs of the underlying application are strong," said Ryan Wang, an economist at HSBC.

Consumer spending leads the district with a 4 4pc place, its biggest gain since the first three months of 2006, according to the report of the Department of Commerce. That helped the economy grow by 2 9pc throughout the year, compared to a contraction of 2 FP6 in 2009.

If long-term ambition US policymakers is to reduce the dependence of economy on the consumer, their spending remains the key to the strength of recovery. Congress and the Fed will be hoped that the stimulus costs unleashed last quarter - more quantitative easing Fed cuts and Washington tax-will be the wallets of consumers as bulletproof as possible. The largest world economy still faces winds, mainly of a fragile housing market and reductions in public spending that many States push through.

However, the last three months of the year witness an encouraging performance for U.S. exports. Added net exports 3.4 percentage points to expansion in the quarter, its greatest contribution since 1980. Who did much to offset a less important role played by companies rebuilding their stocks, a process which has been the key to growth since the emergence of the economy from the recession in 2009. Companies amassed inventories at a rate of $7 MD ($ 4. 5bn) in the quarter, down $ 121 in the three months before.

"For a large part of last year the concern was that companies were not hired because consumers were spending, and they were not spending because there were no jobs, stated Michael Gapen, an economist at Barclays Capital." Hope for the policy is now that it breaks this cycle and creates a virtuous. »

Speaking at the Davos World Economic Forum, Tim Geithner, US Treasury Secretary struck a note of caution, saying that "this is not a boom." It is not an expansion that will provide a rapid decline in unemployment. »

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Richard Farleigh and Anton Kreil? S quite enough

Farleigh you may already know of his brief appearance on Dragon Den, same appeared Kreil shorter on Million Dollar traders. Together, they run a seminar aimed at "showing how private investors properly trade."

As always with these things, it is never explained why someone who knows the secrets of trade is not just to go and who - and leave the cups to lose their money in peace.

Instead, they have a way fatiguing drone countless successes. "Farleigh made a fortune in the stock market, raise enough to retire at the age of only 34," the heavenly on blurb.

"Kreil, who opened his first trading account at the age of 16, has hired Goldman Sachs to 20 and was able to retire at 28.

So the two retired. As I wish they were.

Smart move in the transfer window

Property colossus British Land (BL) was mood generous Thursday evening. Giant FTSE100 entertained 19 hacks and 19 of its management with a meal at the high range of London Soho hotel.

The mood was upbeat, very positive message. Good.

A man who was not the BL Chief Investment Officer Steve Smith.

I understand that he and Malcolm Dalgleish, Realtor to Sir Philip Green among others, had a prior commitment.

After a lot of positioning, pair of Spurs hardcore fans had managed to get a dinner with Harry Redknapp. Given the choice between a gaffer or a load of books, I know that I would choose.

Give us a song, Secretary-General

Many double - takes at Davos. One of the badges of delegates name was Enrique Iglesias. Unfortunately, not the Spanish pop pinup but the General Secretary of the Intergovernmental Agency of Latin America SEGIB.

Does not mean that it cannot take a melody, however.

Jonathan.Russell@Telegraph.co.UK

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Rexam rises on rumours of sale such as FTSE 100 slips back

Merrill analysts describes a potential sale as a positive and said that it might help to unlock the value of the stock. They added that closing sales had continued to decline for the company this year after a painful 2009 and that an assignment would relieve Rexam "link in its portfolio of plastics".

A spokesman for Rexam has confirmed that society considers options for beverages and specialty closures business which might be a sale. Merrill kept his "buy" on Rexam, which ticked up to 11.7 percent 322.6.

Despite the rise of Rexam, blue-chip index was not taking flight as the doubts on the perspective of the Spanish economy restricted the recent Santa rally. The FTSE 100 lost 5882.18 9.03 and FTSE 250 throw 11372.81 37 points.

Moody said that he could retire the Spain debt rating, banks suffered anxiety traders with Barclays suffering from the fall of fears about its exposure to Iberian disorders more marked in the middle.

Also weighing on the shore were grumbling, after fees, Standard Chartered and Deutsche Bank, Barclays issues could also move to exploit investors. Barclays has dropped 10 to 262 p and HSBC lost 66.1.p 10.6.

Too was Tullow Oil, despite the first oil in the pot black Ghana celebrated Wednesday Jubilee field. Analysts of the evolution of said securities that the ceremony is a "callback in a timely manner how Tullow came in a very short period of time in Ghana with Jubilee on stream only three and a half years after its discovery. However, Tullow slipped back 21 p to £ 12.15.

Take a nose dive was British Airways. The airline fell 5.6% 272.4's concerns over the cabin crew strike costs.

Another airline, Flybe, lost altitude despite it emerging partners to George Soros, quantum took a 3 4pc set in the budget carrier. Flybe, whose last week, slipped 2.75 percent 337.25.

Return among blue-chips, leading the charge on an otherwise dull day was Capital shopping centres. The acquired property investor 19.3 percent 415.6 as it indicate an offer of £ 2 9bn Simon Property value.

Scottish & Southern Energy continued to be supported by the gossip with the utility company on 16 per cent to £ 11.66. There were also gossip autour autonomy. The company rose 68% to £ 14.75 per rumors like the towers can be taken in the next year, with Oracle and Microsoft touted as to potential predators.

Whitbread recovered some of the losses Tuesday. The Premier Inn owner and coffee Costa advanced p 34 £ 17.74 as evolution securities analysts increased their price target £ 20.50 from £ 17.40.

"It is tempting to pull profits if one viewed price table share but to do so would miss the next stage of history," said analyst Nigel Parson. «Whitbread performs very well and the platform is in place to accelerate the brand roll-outs.»

Second-liners, main was the ascendant after parts manufacturer said it expected the result for the year to be a little bit in advance market forecasts. Main ticked up to 3.8-145 p.

But at the other end of the spectrum, supergroup takes a fall. Mark wear, which is a this year more successful floats, plunged 178 p to £ 14.50 as he warned that material increases can affect gross margins next year.

Other retailers were also in discussion with analysts chewing the Knight Vinke game-building Kesa Electricals and taking into account the perspectives for music and DVDs retailer, HMV.

Coast capital analysts retained their "selling" on Kesa versus a Dixons "purchase". The broker has said that his concern is that if the Kesa will achieve its goal of progress towards 20pc share in its main markets, which will result in additional investment in prices remain competitive.

"The price of shares does not reflect these concerns, which is the Knight Vinke on game 10pc," said analysts. "We believe that open to Kesa options are few." President already went on record the Kesa is unlikely to dispose of its assets, which in all cases be difficult given the size of the stores. Another option is to turn around the UK company. »

KESA fell 2.7% 165.9 while Dixons relaxed 0.54 for 25,38 p.

HMV lost ½ 34 percent as Nick Bubb, an analyst partners Arden, cut his position "add" to "buy" and reduced his price target to 40 per cent by 74 percent.

He said the change in rating and forecast come after week last "very poor intervals and cut dividend shock."

"With shares up to 35 percent, our confidence that the assessment of HMV was wrong has been shaken and it remains to be seen whether, Alexander Mamut [Russian billionaire] is throwing good money after bad, by increasing its participation in 5MC,", he added.

But Mr. Bubb said that he was not renounce on HMV completely because he thinks that "something can be salvaged from the wreckage."

"Plan A clearly has not worked, with relief, omitted core business but a Plan B which implies a break up or restructuring of the Group (e.g., the potential sale of Amazon) and monetizing digital assets expected to create some backwards", was added.

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Retailers retirement after the shock of economic data

However, a sign that the application of luxury leather handbags seems immune to any concern of relapse, Burberry advanced 33 p £ 10.63 to claim the gold medal.

But stocks of consumers such as Unilever, which makes the Hellmann mayonnaise and Sunsilk shampoo, under pressure, falling from 50 p to £ 18.70.

On the second level, its small peer pz cussons, took the wooden spoon as investors concerned about difficult business conditions of business. PZ Cussons, making SOAP, Imperial Leather said he remained "prudent given continuous trading conditions difficult and rising prices of raw materials", but added that his prospects for the year was largely in accordance with the expectations of the market. Nevertheless, he slipped 26.6 percent 352.6.

Shore Capital analysts cut their rating from "hold" to "buy", saying it was time to make a "pause for breath. Although they remain "convinced" on the long term prospects of PZ Cussons, with strong market positions in countries such as Nigeria, which downgraded their recommendation to reflect "uncertainties ahead."

With retailers on the decline and other stocks more risky like banks and miners also favour, benchmark slipped into the red. The FTSE 100 lost 26.14 at 5917.71 points and the FTSE 250 throw 71.84 points to 11501.6.

Among sharpest fallers were minors heavyweight with Kazakhmys falling 58 p to £ 15.00, while the resources Randgold relaxed £ 48,55 180 p. Lloyds banking Group fell by 1.9 percent 63.15.

Down, was also International consolidated airlines Group (ICAG), catchy title for the combined British Airways and Iberia. He slipped 10 to 275 p, in spite of Citigroup and Nomura initiate coverage with a "buy" rating Reflecting the Anglo-hispanique spirit of fusion, Andrew Light, analyst at Citigroup, called his "Un nuevo comienzo - A New Beginning".

He undertook six main reasons to be positive for the combination of BA and Iberia, including an awaited recovery in premium traffic after three years of decline in BA and an expected decrease in airline pension deficit.

Nomura was also on the rise on the prospects for the ICAG, saying that it will be a dominant carrier routes Atlantic with number one of the market on both roads north and Latin America.

But earlier in the week, Liberum Capital analysts were less sanguine. They had slapped a ranking "sell" the carrier, pointing to an increase in the price of fuel with a wind up in stock.

With investors more cautious atmosphere, they opt for the industrial and engineering stocks, with Johnson matthey and IMI advancing 19 p £ 19.50 and 8½ to 885½p, respectively.

Another advance was resolution, as the vehicle for insurance announced a reshuffling at the top of his Friends Provident arm. Trevor Matthews is quitting as head of division, because he intends to return to his native Australia, en route to industry veteran Andy Briggs.

But the company said that it did not reflect a change in its strategy. Resolution reached 7.7 253 p.

Join the resolution in the ranking was Diageo. Giving to the author of the gin Gordon, an elevator, were positive notes of Nomura and Morgan Stanley, as well as signs of a recovery in the US spirits market.

Analysts at morganstanley kept its "overweight" rating on Diageo and plus his target price to £ 14.00 from £ 13.00. The broker said that Diageo should benefit from reduction of updating the approach of Christmas, as well as growth in Africa and Latin America. Diageo reaches 20% £ 12,41.

Among the second liners, Telecity data centre provider led charge, skipping 21.2 454,2 percent.

Bouncing back from Basinger Monday, it was Street. Printer banknote plunged earlier this week after French suitor, Oberthur Technologies, said he had travelled far bid for De La Rue, after a higher offer did not try the troubled partnership talks.

But De La Rue ticked up to 25 to 720 p yesterday, despite a downgrading of Panmure Gordon. Analyst Paul Jones, in the absence of any interest to bid, was cut to "sell", its rating "Hold'em" and reduced his price target to 566 p 800 p.

Staging of a resume, too, was hikma Pharmaceuticals. Having abandoned back earlier in the week after the announcement of an overhaul of the Commission, the pharmaceutical company focused on the Jordan won 13 875 p plus Jefferies his price target to 10.00 £ 890%.

Analysts suggest that M & A could add additional value. "After the 112 m $ (71 million from £) acquisition of Baxter, we believe that Hikma still has [nearly] firepower of 250 m $ to be used for acquisitions,"said broker."."

Slipping back, however, was Ocado. After having rallied more 21pc since the beginning of the year, online grocery retailer is fell to 11-228 p. market observers have been scratching his head about the reasons for the rise of Ocado, with an offer of Morrisons or Asda being mentioned as a possibility.

But Nick Bubb, Arden Partners, an analyst has given this theory-abused, saying: "in some respects, it would be wiser to Waitrose itself buy with Ocado, but it is difficult to reconcile with the sell at the bottom of shareholding of John Lewis's time."

"We suspect that the real answer is that an American stakebuilder is at work, though if it is an institutional fund or a company online giant with tons of cash remains to be seen", he added.

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Questor share Tip: Pinewood actions are not without risk

Shares of Pinewood, where some of the Harry Potter films have been made, have been at the top and bottom as well as the young Wizard, a Quidditch match.

Pinewood is probably a 12 over PG, when you use the classification of the film as a metric for assessing the risk.

The shares of the studio behind some of the Harry Potter films have been up and down over the past five years as young assistant in a game of Quidditch.

Relying on Hollywood will always at their own risk, but there are some obvious benefits to Pinewood. To start with, the group is now as much about television studios as is the film studios. With a production of television becoming as sophisticated as the film and with the growth of television of the event, studios are used for purposes of double and Pinewood is propagated to its risks.

The Pinewood brand has been well exploited in a series of agreements which has recently seen Pinewood launched in Dominican Republic to serve the Latin American market.

The Group has created Pinewood Toronto Studios and Pinewood Studio Berlin Film Services, while the Pinewood Studios Malaysia Iskandar is under construction. It is also understood to be considering the Indian market, it seeks to capitalise on the global success of Bollywood. The group is targeting the regions of the world where the film is growing rapidly.

And other new developments are interested us, including plans to invest in low-budget films. Pinewood also hopes to further extend to the United Kingdom and currently growing for the creation of the Pinewood, a 100-acre project, the 200 m £
new set.

Against an initial refusal by the southern district Council Bucks for permits for project Pinewood is set for April 5, with a decision due to appeal by the Secretary of State for communities and local government.

Obvious potential risks include competition from other businesses global studios, currency movements and changes to film tax. A single principal shareholder, Crystal Amber, with a set of 28pc, criticized the progress of the Group since its inscription, seven years and appealed to President Lord Grade to leave.

Other concerns are the acquisition and development of Time Warner Leavesden Studios. However, insiders do not consider this as a threat, as a large part of the workshop will consist of a Harry Potter attraction.

Media and publishing vacancies jobs Telegraph

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Stockmarkets bounce as Germany backs sovereign debt rescue policies

 The court's double-edged ruling closes the door on joint-debt issuance in the eurozone or any move towards fiscal union under current treaty law Photo: EPA

Stockmarkets bounced amid relief that the nightmare scenario of a bail-out ban had been averted. However, the court said that there could be no further eurozone rescues without the prior backing of the Bundestag, greatly limiting the ability of any German Chancellor to strike EU deals.

"This was a very tight decision. But it should not be mistakenly interpreted as a constitutional blank cheque authorising further rescue measures," said the court's president, Andreas Vosskuhle.

The ruling saw European shares soar and bond spreads narrow. The FTSE 100 enjoyed its best performance since May 2010, rising 161.75, or 3.1pc, to 5318.59. Greek stocks climbed an eye-watering 8pc, while in Germany the Dax closed up 3.7pc and France's CAC-40 finished 3.6pc higher. The Dow Jones rose more than 2pc to 11371.53 in mid-afternoon trading.

The iTraxx Crossover index or "fear gauge" for credit risk plunged 35 basis points to 729, though it remains near record highs. Spot gold dropped sharply, down $91 to $1,804, on greater risk appetite.

George Soros, writing in the New York Times ahead of the court decision, warned that the eurozone "crisis has the potential to be a lot worse than Lehman Brothers".

The court's double-edged ruling closes the door on joint-debt issuance in the eurozone or any move towards fiscal union under current treaty law. "It is a clear rejection of eurobonds," said Otto Fricke, finance spokesman for the Free Democrats (FDP) in Germany's governing coalition.

Chancellor Angela Merkel said the ruling validated her rescue policies, and once again vowed to do whatever it takes to ensure the survival of monetary union.

"History has shown that countries with a common currency never wage war against one another, and that is why the euro is far more than just a currency. If the euro fails, Europe fails. It must not fail, and will not fail," she said in an emotional speech.

The judges said the EU's nexus of bail-outs and rescue machinery are allowable under Germany's constitution because they do not entail "automatic" transfers that might undermine German fiscal sovereignty.

However, they stressed that parliament's power to tax and spend is the foundation of German democracy and must not be eroded. The decision gives veto powers to the Bundestag's budget committee, dominated by the Christian Democrats and the FDP.

Finland, the Netherlands and Slovakia are all eyeing variants of this legislative brake, raising further questions about the workability of the eurozone's bail-out fund.

Concern about such moves increased on Wednesday after Ireland's finance minister, Michael Noonan, warned that the eurozone's bail-out fund was too small and complained that progress to implement changes agreed in July to expand its size was "slow". The warning came as the IMF downgraded Ireland's growth forecast for 2011 from 0.6pc to 0.4pc.

Those views were echoed by UK leader David Cameron and EU President Herman Van Rompuy who met to discuss issues facing Europe. A Downing Street spokesman said the two agreed that the "immediate priority is to implement" the July agreements.

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Spain - the fifth victim to fall in Europe's arc of depression

Philip Whyte and Simon Tilford argue in a paper for the Centre for European Reform (CER) that this is a “damagingly partial and self-serving” version of events.

“It wrongly assigns all the blame for peripheral indebtedness to government profligacy; it makes no mention of the far from innocent role played by creditor countries in the run-up to the crisis. The result was an explosion of current-account imbalances inside the eurozone. As a share of GDP, these imbalances were far bigger than those between the US and China,” they said.

More than any other country, Spain exposes the lie behind this German narrative. It did not cheat, like Greece. It did not breach the Maastricht Treaty’s 60pc debt ceiling like Italy (or Germany itself). Its public debt was 36pc of GDP before the Great Recession. It ran a budget surplus of almost 2pc of GDP in 2007 and 2008.

We can all agree that Spain has been far too slow to dismantle its Franco-era apparatus of labour privileges, or to end the inflation-linked wage rises eating away at intra-EMU competitiveness. But that is just one aspect of the story.

“The eurozone crisis is as much a tale of excess bank leverage and poor risk management in the core as of excess consumption and wasteful investment in the periphery,” said the CER paper.

Indeed, Spain has been the biggest victim of cheap capital from German, Dutch, and French banks. It was further destabilized by the loose policies of the European Central Bank.

Lest it be forgotten, the ECB allowed the eurozone’s M3 money supply to rise at double-digit rates in the middle of the last decade (against a target of 4.5pc) in order to lift Germany out of slump. It tilted policy to German needs, blighting the South.

ECB monetary policy led to real interest rates of minus 2pc for Spain, fuelling a destructive credit bubble despite the heroic efforts of the Bank of Spain to contain the damage. Yes, Spain would have had a crisis anyway. A fast-growing catch-up economy needs a higher interest rate structure, but all Europe seemed to have forgotten that elemental truth on E-day.

This credit excess is the reason why there is now an overhang of 1.5m homes on the market or still being built, according to data from consultants RR de Acuña. Property prices have already dropped 28pc. The firm predicts further falls of 20pc.

It is why Spain’s international investment balance has swung wildly negative to over €1 trillion, or 90pc of GDP.

Given that the structure of EMU itself caused the North-South imbalances that lie behind the crisis, the EU authorities and the creditor states surely have a duty of care to the countries now trapped in slump. Instead, we heard last week from Brussels that the Spain must “help itself”, and from Germany the usual mantra of reform.

“Some of the governments imposing measures ought to apply the same medicine to themselves,” said the PP’s finance chief Cristóbal Montoso.

The Rajoy team hopes this will be a replay of 1996 when the party took over a prostrate economy from the socialists, and unemployment was almost as high. It tightened then with Prussian discipline, stunning Europe by meeting the entry terms for EMU.

“Spain is going to take the lead in economic stability once again, as we did in the 1990s: the situation is not so different now,” said Mr Montoso.

One admires the grit, but this is nothing like the mid-1990s, when the world was growing briskly, and the devalued peseta was super-competitive against the D-Mark. Today the whole of Europe is tipping back into recession and Spain is 30pc less competitive against Germany.

My own view is that Spain is still fundamentally “saveable” within EMU. Spanish exports rebounded from the 2008-2009 crash almost as fast German exports, outperforming Italy and France.

But this cannot be achieved as long as fiscal and monetary policy are set on slow grinding slump; nor if the burden of adjustment falls entirely on the weaker states as in the 1930s, forcing these countries to slash themselves into a Grecian vortex of self-feeding recession.

German finance minister Wolfgang Schauble – the most dangerous man in the world – is imposing a reactionary policy of synchronized tightening on the whole eurozone through the EU institutions, invoking a doctrine of “expansionary fiscal contractions” that has no record of success without offsetting monetary and exchange stimulus. What is abject is that EU bodies should acquiesce in this primitive dogma.

“Too much virtue has become a collective vice. The collective outcome of all member-states tightening fiscal policy has proved brutally contractionary for the region as a whole,” said the CER paper.

“Household and business confidence is crumbling rapidly across the currency union. On current policy trends, a wave of sovereign defaults and bank failures are unavoidable. Much of the currency union faces depression and deflation.”

It Germany genuinely wishes to save Spain and Italy, it must allow EMU-wide reflation and mobilize the ECB as a lender of last resort to halt the bond crisis, since the EFSF rescue fund does not exist.

To create a currency without such a backstop is criminally irresponsible. If this role is illegal under EU treaty law – and that is arguable – then EU treaties must be changed immediately.

If Germany cannot accept this for understandable reasons of sovereignty or ideology, it should accept the implications and prepare an orderly break-up of monetary union. That is the only honourable course.

In the meantime, one can only watch with grim foreboding as the fifth successive government collapses in Europe’s arc of depression, to be replaced by saviours who can save nothing.

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The great euro Putsch rolls on as two democracies fall

Europe’s president Herman Van Rompuy swooped in to Rome to clinch the Putsch. "Italy needs reforms not elections," he said.

We are not that far from use of EU judicial coercion, and then EU police power, and ultimately EU "border troops" - for those old enough to remember Soviet methods of fraternal assistance.

Chancellor Angela Merkel tells us that peace in Europe can no longer be taken for granted, and she is right. Her own Gothic actions and her inflexible imposition of 1930s Gold Standard contraction and debt-deflation on Southern Europe is itself preparing the ground for Europe’s civil war (hopefully pacific), a rebellion by the South against the North.

Italy’s youth are turning. Watch the footage of students chanting "democracy" and brandishing their "95 Theses" of Wittenberg revolt as poet Van Rompuy tried to speak in Fiesole.

"No to Austerity," starts the Luther List: "Troika out of Greece", "IMF and ECB out of Italy, Ireland, and Portugal", it goes on.

"The EU has become ever less accountable to the people of Europe. The undemocratic structures have infiltrated the very structures of the Union," they said.

Behold "the EU’s furious reaction to the Greek government’s effort to seek popular consent over the financial stranglehold imposed on the country. No longer are expressions of popular consent simply ignored, it is now impermissible to consult citizens."

Let us agree that Greece’s Lucas Papademos and Italy’s Mario Monti are excellent men (Mr Monti has been picked for the task by President Giorgio Napolitano, himself a former Stalinist who later switched his loyalties to the sublime Project).

But the two good men also represent the EU enforcement machine. Papademos was ECB vice-president. Monti was an EU commissioner for ten years.

Professor Monti enjoys great goodwill in Rome but it is far from clear that he can put together a durable government able to implement Project demands.

Antonio di Pietro’s Party of Values has spurned a technocratic regime that lacks democratic legitimacy, saying Italy is "under EU tutelage". La Lega Nord’s Umberto Bossi has denounced the stitch-up.

"The game is getting dangerous," said Il Sole. Some suspect that the Berlusconi camp would not do too badly in snap elections, if allowed, campaigning against the "hated euro and EU bosses". Is that why Brussels is now so afraid of Italy’s voters?

If Mr Monti relies on the Left, how can he comply with EU orders to break the power of the trade unions and impose "Anglo-Saxon" wage-bargaining? A large bloc in parliament will die in a ditch to defend Article 18 of the labour code.

Labour minister Maurizio Sacconi warned last week that careless handling of this issue threatens to unleash another round of terrorism in Italy. It is only nine years since Marco Biagi was assassinated by the Red Brigades for threatening the sacred cows of the Sindicati.

No doubt Italy needs a blast of Thatcherism. The country has fallen down the World Bank rankings in ease of doing business from 74 (2009), to 76 (2010), to 80 (2011).

Its average economic growth rate has been 0.6pc over the last decade. Productivity and per capita income have declined, and this before the demographic crunch hits with a vengeance.

The old age dependency ratio will reach 59pc by mid-century, compared to 56pc for Germany, 45pc for France, and 38pc for the UK, according to Commission data).

But those of us who wrote years ago that Italy’s sclerosis and inflation proclivities were going to cause a train-wreck within the rigours of EMU were told by Europe’s authorities to curb our insolence.

In 2009 the European Commission praised Italy’s "spectacular job creation" and its "greater resilience to external shocks". In 2008 in said Italy was making "good progress" on the Lisbon reform agenda. In 2007 it said Italy’s debt sustainability risk was "broadly in line" with France and Germany.

Italy’s four sets of pension reforms were held out as a shinging example. Finance minister Giulio Tremonti was feted in Brussels, lauded for his iron discipline and primary budget surplus.

And now these same EU bodies tell us that Italy’s failure to grasp the nettle of reform and tackle its debts is so egregious that Europe must step in to overthrow an elected government.

Let us end this EU lie - propagated by Berlin’s uber-bully Wolfgang Schauble - that Italy is suddenly guilty of economic crimes and debt debauchery.

What has changed is the industrial recession in Italy that began over the late summer and the likelihood of full-blown depression next year.

As you can see from this chart below, all three monetary aggregates in Italy have been collapsing for months, a lead indicator of Hell to come.

The ECB could have prevented this monetary implosion in Italy. Instead it tightened further, without a squeak of protest from the governor of the Banca d‘Italia, then Mario Draghi.

Europe’s own policies of synchronized fiscal and monetary contraction are surely to blame for this sudden lurch downwards in Italy’s prospects.

We all agree that Italy’s economic model is unfit for the 21st Century, but it was also unfit for EMU. The Schumpeterian shock was needed before Italy locked its self into the D-Mark forever.

It is too late now for Italy to claw back 40pc in lost labour competitiveness against Germany within the constraints of monetary union. Any attempt to do so by grinding debt deflation will prove self-defeating for a country with a public debt stock of 120pc of GDP.

Such a policy - already tested to destruction in Greece - will itself cause Italy’s debt dynamics to spiral out of control.

There is no possible way at this late stage to reconcile Italy’s needs for massive devaluation with Germany’s hard-money doctrines. One or the other must give.

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The two halves of the eurozone are locked in a broken marriage

Europe’s inspectors will henceforth establish an occupation office in Athens to ensure the "full implementation" of austerity policies, for as long as it takes. Greece has been stripped even of the pretence of sovereignty.

This country that freed itself from Ottoman control in the 1820s (with French help), is reduced to a Sanjak of the new imperial order.

The Greeks will find out soon whether these officials answering to one Horst Reichenbach - unfortunately named for this delicate assignment (couldn't they find a Spaniard, or a Slovene?) - intend to foreclose on sovereign assets and transfer the proceeds to North European creditors. I do not think it would be wise for them to try.

Yes, Greece has gained debt relief: roughly €100bn, if you think life insurers, pension funds, and others will "volunteer" to join banks in accepting their 50pc haircut.

This will leave Greece with a public debt of 120pc of GDP in 2020 after nine years of depression, if all goes perfectly, the same level that set off the crisis.

Fresh EU-IMF loans will once again finance Greece’s trade deficit and ratchet up its foreign debt. Europe is papering over the elemental fact that Greece has an over-valued currency, cannot compete within EMU, and should leave. But that is to disturb the sanctity of the Project.

In Spain, unemployment is within a whisker of five million, reaching a crisis-high of 21.5pc in September. There are 1.4m households where no member of the family has a job. Some 560,000 people have no support at all.

The latest job losses have been in health care and education, a foretaste of what will happen once the EU-imposed guillotine drops in earnest after this month's elections.

It is an unhappy starting point for an economy tipping back into a double-dip recession. The business federation (CEOE) said a credit crunch is already "strangling Spain's industry".

"We can't go on like this. It is impossible to get out this crisis with austerity alone," said Socialist leader Alfredo Rubalcaba, calling on Europe's Left to force a change in EU policy. Buena suerte, Señor, or rather Viel Glück.

Meanwhile, Germany's jobless rate has fallen dramatically over the last five years to just 6pc, and there lies the rub. The promised EMU convergence never happened. What exists instead is a 30pc or 40pc intra-EMU currency misalignment between North and South. This is Europe's cancer.

The two halves are locked together in a broken marriage. To pretend otherwise is no longer responsible. The structural gap cannot be closed by debt-deflation in the South – the current default setting of EU policy. It could arguably be closed if Germany were to let the European Central Bank reflate the whole eurozone system.

Instead, the ECB has done the opposite, opting to blight the chances that Spain might just be able to claw its way back to viability within the constraints of EMU.

Spain is tightening fiscal policy with heroic stoicism. The ECB did not have to have make matters worse by tightening monetary policy as well. It choose to do so, knowing that 98pc of Spanish mortgages are linked to floating Euribor rates.

It did so when money supply growth was minimal across the eurozone, and core inflation was tame, and knowing that Europe's banks are about to shrink their balance sheets drastically to meet capital rules. "In trying to keep its monetary virginity in tact, the bank threatens to destroy the eurozone," said Paul de Grauwe from Leuven University.

So, the ancient nation of Spain – whether you date it from Sancho III (Rex Hispaniarum) in 1035 or Los Reyes Catolicos in 1496 – was ordered by the EU summit to "strictly implement" fiscal retrenchment.

Spain will be subject to "rigorous surveillance" and "discipline", like all the other EMU victims of mispriced German, Dutch, Belgian, and French capital flows, and the ECB's (earlier) negative real interest rates.

Who will subject the excess savers and capital flooders to "surveillance" and hold them to account for destabilizing Southern Europe? Who will "discipline" Germany? Who will tell Berlin to cut VAT and reduce covert export subsidies in order to mitigate North-South imbalances? Yes, this is cheeky. I make the point only because the inexorable logic of EMU has reduced us to such discussions. If Germany and her satellites had their own Thaler, their currency would rise to reflect underlying economic strength. The underlying crisis would solve itself.

As for the ancient nation of Portugal – dating to Vimara Peres in 868 – it is already under EU-IMF administration, or a "state of occupation" in the words of labour leader Carvalho da Silva. The unions have called a general strike for November 24.

This honourable nation, which pays its debts, has been put in a position by the warped effects of EMU where its external capital accounts have swung from surplus to a deficit of 104pc of GDP. The current account deficit is still 8pc of GDP.

What Portugal needs is a 40pc devaluation against Germany. Instead, premier Pedro Passos Coelho is trying to regain competitiveness through an "internal devalution", with swingeing cuts to pay, pensions, welfare, and health. These reforms are necessary, but you cannot deflate an economy back to viability where (EMU-induced) total debt is around 350pc of GDP. It is mathematical suicide.

In Italy, the coalition of premier Silvio Berlusconi was given an ultimatum to submit concrete plans within 48 hours on how to reorganize Italy’s complex society, touching on the neuralgic issues of labour rights (Article 18 of the labour code) and how to treat the elderly.

Nobody tells us what to do,retorted a furious Mr Berlusconi, who then gave his first hint of revenge by calling the euro a strange hybrid creation that hasnt convinced anybody.

The country has been told to reach a balanced budget by 2013, even though it already has a primary surplus, and one of the lower debt levels (public and private) in the OECD club. This policy risks pushing Italy into a slump that could set off the destructive debt dynamic so feared, as has just occured in Greece.

It misdiagnoses the problem in any case. Italy is in crisis because it cannot compete, not because of debt. (The stess has revealed itself in the debt markets, but that is a different matter). Italy is simply in the wrong currency. It will languish in perma-slump until wage rates once again reflect global market reality.

The EU refuses to confront the core issue, instead seeking to buy time for Europe's South by conjuring a €1.2 trillion bail-out fund (EFSF) that seeks uber-leverage through "first loss" insurance of bonds.

This concentrates risk for creditors. It further endangers France's AAA rating, the foundation of the fund. It almost guarantees faster contagion to euroland’s core.

Europe has resorted to this twisted device because Germany has vetoed all moves to fiscal union, Eurobonds, debt-pooling, or ECB activism. It is a Hail Mary pass, a last gamble when all else fails.

Chancellor Angela Merkel warned last week that euro failure threatens a thousand plagues. "No one should think that another half-century of peace and prosperity is assured"

She has the matter backwards. The euro itself is has become an engine of destruction and bitter cross-border rancour.

Europe will not be whole and happy again until the currency is broken into workable parts, and this misguided experiment is shut down for ever.

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Tom Stevenson: 2012 is going to be dark but sell would be a mistake

Once printing presses are started, because they certainly will be, rising prices are a prediction safer than the end of the world.

If 2011 was the year where the markets the risk of sovereign debt on the periphery of Europe revalued, I fear that 2012 may mount the suite in the main countries which, until now, been seen as a refuge.

The show has begun, with yields on the public debt in countries such as apparently secure as the Belgium, Austria, Netherlands and the France with a port separation company remaining in the storm, Germany.

The good news, as is the case, is that this last phase of the financial crisis has the sensation of a late game. If a market crisis is needed to convince the extremists in Europe to accept that quantitative easing alternatives have been exhausted, this, finally, perhaps.

Two consequences of impacts of the contagion of the base are already underway. In Asia, investors lose faith in Europe and, in particular, in the euro area.

One of the surprising aspects of all disorders market this year has been the relative calm of the currencies of the world market. It is difficult to see the euro continues to hold its own as the crisis deepens. With time, a weakened euro will make European assets attractive to investors outside the region, but it is a way off yet.

Second, the sovereign crisis is starting to spill over into the real economy in the form of a credit crunch renewed. The banks are unwilling to lend to each other, and still less to companies and individuals, in an echo worrisome 2007 entry.

Indeed, the European Central Bank seems to have no problem persuading banks to deposit funds with it; they are the tail to park their surplus cash somewhere they can really trust. We all know what happened to the last time the credit markets closed this way.

The combination of the intransigence of German in the intervention of non-sterilized BCE, the reasonable desire by the banks to recapitalise by less loan rather that to sell shares at lower prices and a dogmatic on the austerity emphasis, austerity, austerity condemned Europe to the recession in the first half of next year.

Identification of the profits of the business and the pressure to lower the lower government bond will create a backdrop for equities test.

Then, how investors should look to survive 2012?

Intuitively, reasonable solution selling and waiting for the horrible things to go, is better in theory than in practice because, as the oscillations in a sense from 1975 to 2009 shown always, it is much easier to get the market to reinstate in time.

Calendar of the market in this way is not a feasible proposal; the market will turn when prospects are dark and psychological barriers to reinvesting more great.

A better way to get through the next 12 months is to position your investments defensively and with an eye on the recovery that will certainly follow.

Fortunately, the two approaches in the end, in some cases, in the same place.For example, the area less affected by the crisis in Europe, Asia, is also best to thrive when it is finally over.

The likely speed of recovery and the probability of which pass to the first point of Asia to a higher weighting in the region as most investors have today.

Closer to home, he there has never been better time to focus on quality - companies with the power, the strong balance sheets with little or no debt, exposure to these assessments made Beaver the rapid growth of emerging markets and are the place safe.

Yields above into the actions of many blue-chip companies will examine also particularly compelling if markets all weaken further. Their obligations look much safer than many Governments from now too.

Beyond the crisis of the next year, I expect that a significant risk of tail will be the bogeyman of the Germany, inflation. The difference between the yields of bonds linked to inflation and nominal, said deflation is the real concern, and in the short term, it may be. But once the printing presses are started, because they certainly can be, the price increases are a prediction safer than the end of the world.

Tom Stevenson is a Director of investment at Fidelity Investments in the world. The views expressed are his own. He tweets at @ tomstevenson63

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Redemption hopes buoy BHP Billiton as FTSE 100 flies

"The move is a bit of shock in the market and the reaction was, at least in the short term, to purchase more shares on hopes the company will now issue share repurchases or a special dividend, said Joshua Raymond, the index of the town market strategist."

Switzerland, Credit analysts have a rating of "neutral" on BHP, said that in recent annual general meeting BHP, a resolution for a redemption of 10pc was adoptée.Aux sharing, allowing a maximum purchase of 22bn prices $ more than 2011.

However, the broker has added before any acquisition of redemption or alternative may be provided, potash agreement must run its course.

Although the day belonging to bulls, he was still place a self-styled "buriné bear" her a note of caution.

Edwards, Albert, General company, said in a note: "as I have already said, I expect the quantitative easing to produce a repetition of the inflation of pc 25 successive rounds + I've lived in the years United Kingdom made simple 70.Le is that if, as I expect, QE2 fails and fiscal tightening sends the fragile recession Western economies, we will see emerging market unfolding focused on liquidity and commodity bubble burst also violently she did in the second half of 2008."

But the warning occurred as the excitement around second round the Federal Reserve of the quantitative easing was more powered by upbeat earnings from a blue-chip companies.

A surprising increase in third quarter profit margins grew Unilever, giant consumer goods up to 114% to £ 19.24.However, Liberum Capital analysts remain cautious, keeping their rating of 'hold' on society.

Joining Unilever was Invensys. Engineer makes controls for signalling railway ticked 13.4 percent on a 9pc 300.3 increase revenues.

Analysts singer retained their rating "buy" and price target 305 p, saying: "' we think there will be a disappointment in the interim results of today ' today. Nevertheless, the group maintains its prospects for improved performance in the current year, helped by a significant backlog." "

But at the other end of the spectrum, investors are continuing check showing Morrison supermarkets, which fell from 11.3% peer 278.7.Épicerie retailers through a third quarter subdued, Tesco and Sainsbury sought the same weak, dropping 3.1 421 p and p 1.4 382.8 each.

Sliding the most, however, a engine-maker Rolls-Royce, which fell from 33 to 621½p in the wake of Qantas Airways suspend all Airbus A380 flights after a Rolls Royce Trent 900 engine failure has prompted an emergency landing at Singapore.

Peer, Cobham defence came under pressure too, falling 3½ to 208 p.Plus earlier this week, the Aerospace Electronics warned of delays at the American defence contracts and JP Morgan Cazenove Group cut "weight" to "neutral" rating on Thursday.

"Defence and security markets remain difficult and Cobham has difficulty to growth, said broker." ""With 80pc of sales from contracts funded by the Government which are likely to remain under pressure (sales and margins), we continue to prefer other pieces in the sector.»

But at the second level, Kenmare Resources climbed from 2 to 23% on the back of a Bank of America - optimistic note Merrill Lynch.Le broker has launched on the minor with a "buy" recommendation and a price target of 30%.

But falling on a day where the FTSE 250 rose points 140.18 to 11016.46 was International Charter, slipped 45½ to 682 p as a manufacturer of tools and equipment said he expected results throughout the year at the lower end of expectations.

Panmure Gordon retained their recommendation "hold", analysts saying that update was "weak" Party Man, listed hedge fund .ACTIONS largest world, 37.1 sudden p 290.8 as she saw the active client bounce more strongly than expected.

Man Group, who has recently purchased smaller rival g/L with its used $ (taken from £ 15) assets, said that the funds under management amounted to $40. 5bn on September 30, which was billion $, more a prediction antérieure.Renvoie stronger its flagship AHL fund drive has contributed to the recovery.

Peter Clarke, Man Group Executive Director, said group has been "well positioned for growth of the assets."

But analysts at Numis clinging to their "hold" rating group human. ""We believe it y a risk in the short term that measures QE2 announced yesterday evening could result in a negative for AHL performance as was the case with QE1, ' said the dealer.

"Long term that we remain positive on the group, because we believe the man GL combined could become one of the most powerful forces in terms of product and distribution space solutions alternative, combined with increasing allocations likely alternative," said analysts.

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Resolution up races forward market update

Comforters, suggested Redburn, included with old mutual and Aviva, which ticked up to 4.2 for p 135.4 and 461.3 4.8 percent respectively.

Resolution to give a rating "buy" Redburn analysts argued the evaluation could provide 80pc upside, which helped 16.6 - mounted resolution or 6 3pc - 280,6 p.

Rally of the resolution was the largest market staged a recovery. The FTSE 100 placed on cigarette 6085.27 points and FTSE 250 points 57.56 advanced 11807.28.

Resolution was growing thanks to focus on its acquisition strategy, bhp billiton has been on the slide for the same reason. Undermine more grand world slipped rear 36 percent to £ 24.64 he played in the potential for M & A large scale. For three years, BHP pulled the plug on three major operations, including its bid (£ 24bn) of $39bn fertilizer maker potash, mainly due to regulatory concerns.

When provisional results BHP unveiling, Chief Executive Marius Kloppers said that the preference is to pass on the expansion due to difficulties in securing major acquisitions and product lifecycle had raised expectations of potential asset pricing.

As such, BHP provides pay $80bn in expansion over the next five years instead of Hunt supported by ambitious.

He joined BHP among the laggards tullow Oil Explorer announced that a well off the coast of Mauritania had proved unsuccessful, and as such, could be plugged and abandoned. Tullow dropped by 18 per cent to £ 14.09.

At the other end of the spectrum, GKN accelerated as Investec has begun coverage of the author of car parts and aircraft with a rating "buy". Analysts have argued that GKN was enjoying a recovery volume in its major automotive and industrial markets. Persistent control taken gossip continues to fuel GKN too and increased 9.3 at 217 p.

Real estate companies were demand through HSBC. In a review of the real estate sector, the broker raised his recommendation on British land to "overweight" from "neutral" and increased Land Securities to "neutral", "weight". Land Securities put on 25 at 727 p then British Land 14½ at 557½p.

Among the second-liners, Prime Minister Foods was still basking in the glow of the news Tuesday that it had reduced its debt pile less than 900 m £.

Credit Switzerland analysts were certainly pleased with Hovis bread manufacturer and the Branston pickle. They increased the Prime Minister "outperform" from "neutral", claiming its look of finance in much better shape and its price target to 38 p to 25 p.

"Balance has been the key on the part of price, not the pay," said the broker.

"With eliminations soon the road and a respectable investment grade rating obtained, the Group should now be able to renegotiate its debt from a much improved position." The premier reinvigorated up 2.15 27.9 percent.

Morgan crucible claimed Medal Silver, walking up to 22½ to 299 p, as the creator of the industrial ceramic said it aimed to gain implementation in 2013. The company also provides scouts for the acquisition of technology, reduce costs and to enter cost end-markets.

Micro focus has regained some lost ground after mauling Tuesday. Having a on news that IT has cut its forecast for the year after losing a few large transactions in the third quarter, Micro Focus has won 5-296 p brokers turned bullish.

Panmure Gordon, Peel Hunt, and Numis raised Micro Focus "buy" to "hold". Analysts to the singer has also suggest that Micro Focus may be a target for M & A.

It was MITIE' s Tower downgraded analysts Peel Hunt wooden spoon society of facilities management and Credit Switzerland started with sous-un "perform" rating coverage. Has cited dependency of the British economy MITIE and a very competitive market with low barriers to entry.

Among the small-caps game Group slipped back despite unveils its strategy on how to increase Web revenues. PC and video games plan retailer will take measures such as providing shoppers with new payment options. But the game warns that its margins decline as revenues online and digital grew sending down 1.75 percent 70.25.

hogg robinson reinvigorated up 2.75% 47.375 after business travel operator raised its forecast of profit for the year.

Broker settles its rating from "hold" to "reduce", while JD Wetherspoon increased from 1.2 to 441 p.

Mouchel stake as media takeover of forecasting

Mouchel actions marked by 3pc as investors speculated that the long battle for support services company could move towards a key junction. A spokesman for the Costain, which is one of 172 million to £, or 153 p-a-share, submission, confirmed yesterday that speaks with Mouchel were taking place on an agreement. However, according to sources, Mouchel continues its options with a range of interest parties to actively and no advertising agreement is imminent. The shares reached 3.88 p 133.88.

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Redesign of the FTSE: how two accountants became £ 1,000 £ 1. 5bn

Society 52pc founded and still owned by Peter Hargreaves and Stephen Lansdown, is promoted with ITV and Wood Group when the last quarterly realignment comes into effect Monday.

Mr. Hargreaves and Mr. Lansdown formed their partnership, which is now a total value of £ 1. 5bn or capitalization half the stock company of £ 3, with an investment of £ 500 in 1981.

About 660 staff hold 10pc of Hargreaves Lansdown shares and 14 000 customers who subscribed for stock 160 p in the flotation, less than four years have almost quadrupled their money to the 635 p Wednesday closing price.

Mr. Hargreaves, 64, said: "the secret of our success is simple;" We give customers what they want.

"If you call our hotline, a real person answer." If we say that we will communicate with you, we will. Emails are answered within four hours and letters are a response by return of mail.

Questioned the viability of its enterprise commercial actions of the coefficient of capitalization above 37 - or more than double the average FTSE 100 - Mr. Hargreaves responded: "I've always said our actions are expensive."

"The rationale is that our business model is unique, the quality of our earnings and admission fees."

"We receive no commission sales, so it takes a long time to become a profitable customer." But receive a share of the burden of management annual is the right way before because if what we buy monte in value for the client, the client is better and we earn more. »

Dismissing fears that rising like a rocket could descend like a stick, Mr. Hargreaves stressed: "we have no debt - on the contrary." We have enough cash in the Bank of commerce for 12 months without income at all.

"We might be the first company to make the FTSE without borrowing or acquisitions." He did everything by organic growth. »

The reshuffle sees Bunzl, Alliance Trust and African Barrick Gold relegated to the FTSE 250.

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Retrieve the markets of the Middle East on optimism the Egypt

Investors set aside concerns that violent demonstrations in the State of the gas-rich Algeria and other events at the Yemen could destabilize the region, or in any way threaten the oil reserves.

Stock Exchange remains the Egypt closed and will reopen this week with margins, but companies with large Egyptian interests que se aligned on other exchanges. Dana Dhabi gas jumped 4 5pc, whereas Air Arabia and group telecom Etisalat the two 0 9pc pink. EGX 100 index the Egypt fell 27pc more than two weeks before the Exchange was closed on January 30, but seems ready for a rebound.

Lars Christensen, head of emerging markets at Danske Bank, said invest in shares MIDEST is similar to European assets purchase is after the fall of the Berlin wall and could be rewarded for time if more open societies unleash economic potential. "We are very positive: the way things are playing is on the more positive point possible scenario." There is no civil war in Egypt and no hostile actions against other countries. »

Mr. Christensen, said the Egypt and the Tunisia are "star artists" in economic terms before their revolutions and should seek there where they left. "Our one of the concerns are that leaders across the region trying to buy their people instead of opening with reform", he says. Jordan has raised grants for food and Bahrain, where a Sunni elite governs the Shiite majority, is to give each family a bonus of £ 1,650 for food.

The Egypt managed to increase the $1 billion market debt Sunday but rigid price pay 11 68pc for 9 months invoices. Credit default swaps on the last Egypt debt traded at 322 points, below Hungary, the Portugal, Ireland or the Greece.

Finance Minister Egypt Samir Radwan, stated that the country is considering financial boost to restart growth, even though the budget deficit may hit 10pc of GDP this year, against 7 9pc initial estimates. He said "There is a need a recovery plan that is very closely linked to employment".

Mr Radwan said losses of agitation reached $6 MD, largely caused by tourist flight. Growth will drop to 5 8pc slot 4pc in 2011. The Egypt must create 700,000 jobs per year to absorb a "youth bulge" entering the labour market.

The main causes of the revolt in Egypt and Tunisia was new wealth is enriched elite but did not follow relatively quickly to the rest of the country, validating once more the theory of Tocqueville revolutions occur because increasing prosperity is biased, rather than because of poverty.

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World power swings back to America

The US already meets 72pc of its own oil needs, up from around 50pc a decade ago.

"The implications of this shift are very large for geopolitics, energy security, historical military alliances and economic activity. As US reliance on the Middle East continues to drop, Europe is turning more dependent and will likely become more exposed to rent-seeking behaviour from oligopolistic players," said Mr Blanch.

Meanwhile, the China-US seesaw is about to swing the other way. Offshoring is out, 're-inshoring' is the new fashion.

"Made in America, Again" - a report this month by Boston Consulting Group - said Chinese wage inflation running at 16pc a year for a decade has closed much of the cost gap. China is no longer the "default location" for cheap plants supplying the US.

A "tipping point" is near in computers, electrical equipment, machinery, autos and motor parts, plastics and rubber, fabricated metals, and even furniture.

"A surprising amount of work that rushed to China over the past decade could soon start to come back," said BCG's Harold Sirkin.

The gap in "productivity-adjusted wages" will narrow from 22pc of US levels in 2005 to 43pc (61pc for the US South) by 2015. Add in shipping costs, reliability woes, technology piracy, and the advantage shifts back to the US.

The list of "repatriates" is growing. Farouk Systems is bringing back assembly of hair dryers to Texas after counterfeiting problems; ET Water Systems has switched its irrigation products to California; Master Lock is returning to Milwaukee, and NCR is bringing back its ATM output to Georgia. NatLabs is coming home to Florida.

Boston Consulting expects up to 800,000 manufacturing jobs to return to the US by mid-decade, with a multiplier effect creating 3.2m in total. This would take some sting out of the Long Slump.

As Cleveland Fed chief Sandra Pianalto said last week, US manufacturing is "very competitive" at the current dollar exchange rate. Whether intended or not, the Fed's zero rates and $2.3 trillion printing blitz have brought matters to an abrupt head for China.

Fed actions confronted Beijing with a Morton's Fork of ugly choices: revalue the yuan, or hang onto the mercantilist dollar peg and import a US monetary policy that is far too loose for a red-hot economy at the top of the cycle. Either choice erodes China's wage advantage. The Communist Party chose inflation.

Foreign exchange effects are subtle. They take a long to time play out as old plant slowly runs down, and fresh investment goes elsewhere. Yet you can see the damage to Europe from an over-strong euro in foreign direct investment (FDI) data.

Flows into the EU collapsed by 63p from 2007 to 2010 (UNCTAD data), and fell by 77pc in Italy. Flows into the US rose by 5pc.

Volkswagen is investing $4bn in America, led by its Chattanooga Passat plant. Korea's Samsung has begun a $20bn US investment blitz. Meanwhile, Intel, GM, and Caterpillar and other US firms are opting to stay at home rather than invest abroad.

Europe has only itself to blame for the current “hollowing out” of its industrial base. It craved its own reserve currency, without understanding how costly this “exorbitant burden” might prove to be.

China and the rising reserve powers have rotated a large chunk of their $10 trillion stash into EMU bonds to reduce their dollar weighting. The result is a euro too strong for half of EMU.

The European Central Bank has since made matters worse (for Italy, Spain, Portugal, and France) by keeping rates above those of the US, UK, and Japan. That has been a deliberate policy choice. It let real M1 deposits in Italy contract at a 7pc annual rate over the summer. May it live with the consequences.

The trade-weighted dollar has been sliding for a decade, falling 37pc since 2001. This roughly replicates the post-Plaza slide in the late 1980s, which was followed - with a lag - by 3pc of GDP shrinkage in the current account deficit. The US had a surplus by 1991.

Charles Dumas and Diana Choyleva from Lombard Street Research argue that this may happen again in their new book "The American Phoenix".

The switch in advantage to the US is relative. It does not imply a healthy US recovery. The global depression will grind on as much of the Western world tightens fiscal policy and slowly purges debt, and as China deflates its credit bubble.

Yet America retains a pack of trump cards, and not just in sixteen of the world’s top twenty universities.

It is almost the only economic power with a fertility rate above 2.0 - and therefore the ability to outgrow debt - in sharp contrast to the demographic decay awaiting Japan, China, Korea, Germany, Italy, and Russia.

Europe's EMU soap opera has shown why it matters that America is a genuine nation, forged by shared language and the ancestral chords of memory over two centuries, with institutions that ultimately work and a real central bank able to back-stop the system.

The 21st Century may be American after all, just like the last.

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