Sobering comments from San Francisco.

"Can European Countries really go bankrupt?" is the title for a good review of the frightening facts in the San Francisco Sentinel, linked here. Some quotes regarding the UK and the concluding paragraphs follow: Take the example of Great Britain. The country is on the brink of financial ruin. Real estate is overvalued, private households are overly indebted and its vast financial sector has been badly hit by the crisis. Confidence in Britain’s ability to overcome the economic turmoil is sinking by the day, as evidenced by the precipitous decline of the pound, which has almost reached parity with the euro. Just 13 months ago, it was worth €1.40...............

Iceland, for its part, is already as good as bankrupt. In Eastern Europe, a number of countries are wobbling — Latvia has already had to request aid from the IMF and the Eastern European Development Bank. In the capital city of Riga, 40 people were injured in a violent protest that took place on Jan. 13.

Great Britain is also in trouble. And if it weren’t for the protection that their membership in the common currency provides them with, some euro zone countries would be fighting for financial survival right now. America, on the other hand, is banking on the fact that it is still considered stabile despite it’s enormous problems — and that the Chinese still hold a huge chunk of their currency reserves in US bonds.

So will things get better? It would be an illusion to believe that countries have learned from their past mistakes, US economists Reinhart and Rogoff warn. In fact, another state could go bankrupt at anytime and take its people down with it.

In this crisis, nothing is unimaginable anymore. Yet the man in charge in an interview in the Daily Telegraph today says all the country needs is confidence! Seeing Brown performing in front of the international financial criminals at Davos to the nonsense world issue questions posed by the fawning Ms Amanpour it was clear that he had lost contact with any trace of reality.