Economics

I'm asked by a friend who trades inflation for a bank what I think. So....

"Sell in September and go away.
I dunno. UK housing is just unaffordable. We'll have to emigrate to Poland. That's not a joke, it makes a lot of sense to base an office in E.Europe, eg the Baltic States. In Poland you can get cheap Ukrainian plumbers.

US housing is more efficient than in space restricted, bureaucratic UK, so I expect the price signals to work earlier (as they are) with consequently smoother markets and less knock-on to consumer confidence in general. The UK is hard to predict because just as English is the global 'lingua franca', so London has become world city and new capital immigration (eg from India and China) can propel UK asset prices further than history would suggest.

Commodities have peaked, absent much greater tension in the middle east or somewhere unexpected.

Inflation in general has stayed low despite the commodity boom, despite mid-east war, despite China and India. Reason is China and India (abundant cheap, skilled human assets) plus tech advance plus floating currencies to permit tensions in purchasing power parity and expectations to disssipate rapidly rather than by currency earthquakes.

So :

Commodities down
US housing down 25% ish, but no hard landing for economy.
UK housing is a big fat wobbling bubble which will probably both inflate and deflate bigtime with an eventual big fat splatty pop.
E. Europe pretty good.
France will improve for sure.
Germany still stuck. Talent gets out, but they're not really hungry.
China - no idea.
India will boom. Tremendous talent, finally, finally starting to liberalise.
Inflation overall not a bigtime problem.
Sterling steady - really it's a better reserve currency than Euro.
Dollar strong. Say it again - strong dollar. More hawkish fed, purchasing power parity, lower oil prices. President Romney will be more of a deficit hawk.

Politics in the UK is rancid. Cameron's an utter scumbag and Labour/the vast public sector/the BBC will try to capture Gordon Brown away from markets and the US. That might lead to 1970's type national gangrene for a while".