Consumption is the most important driver of economic growth, but consumption has to be in large part funded from current income, and to the extent that it is funded from borrowing, and thus future income, the ability to repay needs to be considered in the context of risk to future income.

So far I’ve focused my attention on the economic and commercial aspects of the Broken World. But there’s more to life than money.

The US economy is quite evidently slowing again and the Fed in its wisdom has decided to extend Operation Twist, that is buying longer dated treasuries and funding that with the sale of shorter dated debt. This is like someone saying he’s got to water the lawn just after Hurricane Katrina.

The financial crisis rolls on. Failure to fully understand the first precipitation in 2008 is leading to errors in policy.

The problem of fiscal union in the Eurozone is not as intractable as many think. There is an elegant solution. Actually, let me retract that, there is a chaotic, potentially contentious, precipitous, union breaking, gut wrenching solution. Which is quite nice.