In a TV interview this morning, I was asked about the problems in the US and EU with regard to their national deficits.

I think there is nothing new.  The last sharp decline in global stock markets started in August 2011 with the credit rating downgrade of the US.  This was due mainly to the indecision of the Republicans and Democrats to effect the necessary policies to improve the deficit issue.  So the failure of the “Super Committee” to offer a solution is the same problem we had in August 2011.  Infact, by doing nothing and with the lapse of the some of tax cuts/benefits implemented by the Bush administration, the US deficit will naturally contract by US$6-7trillion after the end of 2012.  I believe that the recent decline in the US market is part of the recent volatility where markets can gyrate +/-2% every …