An English acquaintance, who has lived and worked on the Costa Del Sol in Spain for many years, explained to me the difference between how a Spaniard and a British man react to offence.

“The Spanish man will approach you rapidly with arms waving and voice raised in passion. He will give you a verbal bashing but will rarely strike a blow. The Brit will remain still, with narrowed eyes, you may not even realize you’ve offended him until his fist smashes into your face.”

Gordon Brown is in the latter situation now. The nation has narrowed its eyes and gone quiet, as it surveys the wreckage of its hopes, the trashing of its country, and the depressing fact that “nothing works any more”.

The “great, clunking fist”, as Tony Blair called Brown, is all set to be on the receiving end of an even greater bunch-of-fives.

He may not realize this yet. His recently-acquired maniacal grin of self-satisfaction has only just peaked, beginning a long, slow downturn of the rictus muscles.

After a week of shocking revelations, showing the National Debt set to double in a few short years, matching that of the country’s annual economic output, plus the Nixonian arrest of an Opposition Member of Parliament for effectively doing his job, the mood of the nation is dire and Brown is its focus.

Even his opinion poll gains, after the bank “bailout” that failed, have now retreated, handing a 15 point lead to David Cameron’s Conservatives.

Brown’s great ploy of bringing back arch-enemy, Peter Mandelson as Lord Mandy of Huckleberry and Folly in the Counties of Yorkshirepudding and Heartlessness, has fractured into Victorian melodrama. Mandy’s real opinion of grim, “fatally flawed” Gordon is all over the papers this weekend.

How the Tories must be chortling. Just a week ago Shadow-Chancellor, George Osborne, was lost at sea, and boss Cameron was a shallow novice not fit to black Broonie’s boots.

But the real change is in the demeanour of the electorate, the ultimate arbiter of who shall rule over us. If you look it straight in the eye, the face of Ray Winstone stares back at you. A study in suppressed fury, brittle calm before a storm, narrow-eyed, focused malignity, fists curling, sinews clenching … You get my drift.

Gordon doesn’t stand a chance. The British are seething for an opportunity to take revenge on the man and the government they blame for making such enormous bets on failure with their money.

The reckoning will be harsh, richly-deserved, and probably fatal to the Labour party, which will yet again leave office as the author of national disaster.

John Evans

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Just a few weeks ago the world was wondering if we were about to be pitched into a deadly Black Hole created by CERN’s Large Hadron Collider in Europe.

Relax. The machine has broken down and will not be cranked up again until the spring.

Strange then that another Black Abyss stretches before us today in the shape of a virulent debt deflation of almost unimaginable ferocity.

Take these words by Ambrose Evans-Pritchard in today’s UK Telegraph:

We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars.

In case you think that smacks of hysteria, this is a man who has called this crisis correctly ever since the late summer of 2007. He adds:

“During the past week, we have tipped over the edge, into the middle of the abyss. Systemic collapse is in full train. … Central bankers still paralysed by a misplaced fear of inflation – whether in Europe, Britain, or the US – have become a public menace and should be held to severe account by our democracies. The imminent and massive danger is now self-feeding debt deflation.”

What this crisis shows is that world prosperity was built on a giant illusion: that there was real value in other people’s promises to pay at some future date, and that you could pass the parcel at a vast profit.

Time has run out and a bubble the size of an asteroid has landed and exploded in the centre of our civilization — the banking system.

The Sage of Omaha, Warren Buffett agrees, “In my adult lifetime, I don’t think I’ve ever seen people as fearful.”

Evans-Pritchard is lacerating about the EU and its Central Bank. It offered no “cover” to the Fed when Ben Bernanke slashed rates to 2 percent. The ECB simply raised its rate to 4.25 percent into a steep downturn, making oil inflation even worse.

As a last resort, it seems, the American authorities will use Bernanke’s famous printing press “to expand the menu of assets that it buys.” In the worst case, that could lead to a massive run on the dollar by foreign creditors and no end of misery for us all. But it may be necessary nonetheless.

At home, I have absolutely no confidence in the British government under Gordon Brown and Alistair Darling. They have been woefully slow to act, their policy to hide their heads under a pillow hoping it will all go away.

If Brown had even a small slice of a leader’s courage he would put together a massive package to recapitalize the British banking system; disown the “mark-to-market” accounting agreement, which forces banks into insolvency by estimating their assets on depressed valuations; take immediate control of interest rates by reducing them to 2 percent; begin to prepare for withdrawal from the useless European Union; and work closely with the Americans, who are, at the very least, fully aware of the immense dangers we face.

The Kraken is awake and bearing down on us fast. Over coming months and years we may wish that the Hadron Collider had swallowed us all up when it had the chance.

Update: The British Government has announced a variety of measures to recapitalize the banks and get the inter-bank lending markets working again. It amounts to a $900 billion bailout, eerily identical to the Paulson Plan for a country five times the size of Britain.

John Evans

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Update: The U.S. House of Representatives has rejected the Treasury’s $700 billion rescue package. The Dow is down 770 points as I write.

Around a year ago Syntagma was among the first to use the word “Depression” in relation to the trajectory of Western economies.

Today, Monday 29 September, the word is on everyone’s lips.

Despite the rescue package now going through Congress, U.S. Treasury officials are in wild panic mode as truth finally dawns: there is nothing they can do to halt the steep declines in credit issuance that will deliver the most virulent bout of debt-deflation the world has known since the 1930s’ Great Depression.

We are hearing that officials close to Henry Paulson are privately painting a much bleaker picture of the fragility of the global economy than that of President Bush last week.

A Republican is quoted as saying that the message from government officials is that “the economy is dropping into the john. We could see falls of 3,000 or 4,000 points on the Dow. That could happen in just a couple of days.

“What’s being put around behind the scenes is that we’re looking at 1930s stuff. We’re looking at catastrophe, huge, amazing catastrophe. Everybody is extraordinarily scared. It’s going to be really, really nasty.”

A spokesman for BNP Paribas said, “Money markets are imploding. If no action is taken very soon, there is a significant risk that the global economy will collapse.”

But what action can be taken now? Imagine a palatial building across many acres eaten through by hordes of termites. Builders rush in to replace a pillar or two hoping to stabilize the structure. But architects shake their heads knowing that nothing can save the rotten edifice from collapse.

The U.S. Federal Reserve fears an “adverse feedback loop” with terrifying consequences. The “liquidation” of failed banks policy that led to the Great Depression is alive and well and raising its head in the Republican party. That may give them a short-term bounce among very angry voters, but the result could be catastrophic.

John McCain, who seemed to be coasting to victory just a few weeks ago appears to be undermined by his own side. His chances of the White House get slimmer by the day.

Central banks in Britain and Europe are maintaining their high-interest rate policy, despite the need to loosen up credit. Libor — the rate at which banks lend to each other — rose again this morning, regardless of the $700 billion U.S. package. They need to cut and cut again despite their genteel anxiety over “moral hazard”.

We are witnessing a slow-motion shipwreck, caused partly by panic, by different officials working to rigid, uncoordinated targets, and by the lack of anyone competent enough to take overall charge and impose a coherent escape route on the entire system.

The politicians have imploded, the bankers have failed, and the markets are reflecting that turmoil in the only way they know how.

How very fragile are the pillars of our civilization.

John Evans

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With this Keystone Cops British government I can almost believe anything.

Cartoon of Alistair Darling by Morland.

When the credit crunch first hit and it became obvious Gordon Brown’s Financial Services Authority (FSA) had failed to spot the problems at Northern Rock and in the wider financial sector, what did Gordon do? He pushed for a global version of it to police the planet against similar disasters in the future.

Apart from stable doors and all that, it proved that there’s a disconnection from reality in the Brownian universe.

Today we read that Chancellor Alistair Darling is furious that Brown intends to put up £40 billion ($73bn) of taxpayers’ money to underwrite the flakiest mortgages in Britain.

At a time when the curious American institutions Fannie Mae and Freddie Mac — which had their origins in the Great Depression and have stuck around ever since — are reported to be insolvent, Brown is intent on a British version.

Fannie Brown and Freddie Darling, perhaps?

The Chancellor reacted with uncharacteristic sharpness in a Guardian interview recorded two weeks ago but published yesterday. This is the worst economic crisis for 60 years, he growled, challenging Brown’s denial-laden narrative of events. He then appeared on the BBC apparently under orders to quote a text prepared by the looming ogre next door in Downing Street.

He did. Five or six times, each repetition virtually identical. At one point I thought I was watching one of those tape loops that plays the same bit of footage over and over again.

Just as I was beginning to get dizzy and drift off into a hypnotic trance, I cottoned on that this was Darling’s way of signalling to us in the real world that this unfortunate man, now trapped in his Treasury nightmare, was speaking to a script. Rather like Middle East hostages trying to show us they don’t really mean what they’re saying and are saying it under duress.

I feel truly sorry for Alistair Darling. He has always been known as “a safe pair of hands.” Now those hands are stangely missing. Chopped off, tied behind his back, maybe? Who knows?

He’s on the way out, his head about to be sliced off on the internet in the manner of recent hostage unfortunates.

His legacy?

Years of loyal service to his master, a reputation as the quiet man of the Cabinet, little else that anyone can remember, oh, and Fannie Brown and Freddie Darling.

Or will Ed Balls take the rap for that?

Yesterday I heard the British Prime Minister, Gordon Brown — speaking from the G8 conference in Japan — make one of the weirdest statements I’ve ever heard from a head of government.

He said, and I paraphrase from memory: “Each family in Britain throws away £8 ($16) worth of food every week. We have to tackle this on a global basis.”

Allowing for possible editing of the clip and the deficiencies of my memory box, it is incomprehensible until you remember that our man Gordon thinks everything has to be dealt with globally. Even, it seems, what to do with curling up sandwiches.

Apart from “long-term solutions”, global and globally are his favourite words, and never very far from his lips.

So let’s take the statement at its face value. Each family … £8 of food. Maybe that has something to do with the sell-by dates added by supermarkets and food manufacturers. Is that a problem for the Galactic Council?

The BBC had an unintentionally hilarious live broadcast from one British city’s rubbish tip. The reporter excitedly told us that behind him was all the food that the good burghers of said city had thrown away that day. The pile was about the size of my compost heap.

What startles me about Brown’s words is firstly his small-minded, nitpicking approach to the current inflation in food prices, which then balloons out to “global solutions”.

My interpretation? He knows he can’t solve the myriad of minor problems at home — he’s had ten years to do it — so he parades himself as a “global player,” an activist on the world stage.

But then that was always the way with the Blair-Brown joint premiership. Their main interests and efforts have always been for Africa or Europe, or sorting out the Middle East. Internationalism precedes nation, global takes precedence over the problems of the homeland.

It’s a classic case of inflatus, brought on by incompetence and lack of empathy with their own country. They have never “batted for Britain”.

The G8 has become a worthless jamboree for performing heads, one eye on the domestic audience, another on their own perceived global importance. It’s yet another failed attempt to develop a “World Government”.

Leaders like Brown should muse on the fact that if national governance is so difficult, how much less worthwhile it is to create regional and global institutions which take on the same tasks — like complaining about folk chucking away a few ancient pizzas.

Is the G8 past its sell-by-date? Gordon Brown certainly is.

The glib phrase “chickens coming home to roost” is about to spread across our media like a contagious rash.

The words are used to convey very bad times indeed, and place the blame on those responsible for keeping the cocks and hens busy doing something else.

By October, probably even September, the West could be in meltdown, with stocks and credit sinking to record lows. During the summer, unemployment will start to rise inexorably as various “crunches” combine in the perfect storm long anticipated by some of us. The knock-on effects could be extensive for most people and some businesses.

Last week, Bank of England Governor, Mervyn King warned Parliament that no family in the land can avoid significant cuts in their standard of living. Take it on the chin and adapt, was the essence of his message. It was the kind of sentiment you would normally expect from a leader announcing the country was at war.

New figures also show that British personal debt now stands at 173pc of annual income — a number so scary that even allowing it in the same breath as rapidly falling house prices is enough to make stout hearts leap from skyscrapers.

Bob Janjuah, RBS’s credit strategist, warns, “A very nasty period is soon to be upon us — be prepared. … Cash is the key safe haven. This is about not losing your money, and not losing your job.

“Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point. … The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB [European Central Bank] will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets.”

Oil prices should start to fall back as output is increasingly depressed. Next year it won’t be inflation we will have to worry about, but debt deflation.

Over the next decade, small children may start asking their mothers, “What do chickens do when they’re not roosting?”

If you add up the major crises now facing the world — rocketing food prices, chronic wars in the Middle East, the credit crunch, high oil and commodity prices, and the slow motion global recession — they can all be traced directly back to September 11, 2001, when a few passenger jets were flown into three strategic American buildings.

That day has taken on an eerie similarity with the murder of Archduke Franz Ferdinand in Sarajavo in 1914, which triggered the conflagration of the First World War. Like the aftermath of that assassination, the reactions to 9/11 were, in retrospect, out of all proportion to the actual historical significance, despite the deep emotional shock it caused. Human reactions are driven by dark psychological currents, not cost-benefit analyses.

Consider the credit crunch. Joseph Stiglitz’s book The Three Trillion Dollar War (reviewed here) argues persuasively that Alan Greenspan’s policy of holding interest rates below optimal levels, for longer than anyone deemed necessary, was aimed at masking the enormous cost of the Iraq war on the American economy. The war was a result of 9/11.

Combined with rising house prices, the loose policy opened the way to a splurge of mortgage lending to the U.S. trailer-park poor, the sub-prime end of the market, and the rather guilty repackaging of it into faux Triple-A assets, which were sold on around the world. From those actions, we now have global economic turmoil hanging over us again.

The wars themselves are widely seen as a catastrophe for America’s reputation around the world, despite the late surge and the silent successes of the British SAS in taking out Al Quaeda leaders in the north. Whether they will inflict the psychological damage of Vietnam is not yet known, but it’s a distinct possibility.

As for commodity and food prices, the fighting in the Middle East drove up the price of oil, now heading to $120 a barrel, which has had a knock-on effect in all other markets, especially food.

In an inflationary environment, merchants tend to hoard their stocks in warehouses, betting on higher prices down the line. It’s a one-way bet right now, so a lot of the world’s grain output is locked away, pushing up prices at an even greater rate and shoving millions into hunger. Those positions will unravel quickly though at the first sign of a price peak, when dealers will dump their stocks on the world food markets. Prices will then drop sharply, revealing the real danger to the world — deflation and slump.

History comes down to us in a highly condensed form in which major events seem to follow each other in rapid succession. In reality they are interspersed by long periods of calm, even small recoveries and bursts of optimism. The underlying trend is still downward though, with much poison yet to unwind in a collapsing spiral of self-reinforcing declines.

The attack on 9/11 will almost certainly become the defining event of the 21st century, setting the tone for the rest, just as Franz Ferdinand’s death led to two world wars, a Great Depression and a cold war, plus the rise of some of the most evil figures in human history.

That’s why I say, 9/11 is still with us. It’s not going away anytime soon.

Syntagma Media is pleased to relaunch Moneyizor.com as a tracker of the hot topic of the moment : macroeconomics.

If that doesn’t sound terribly exciting, think “credit crunch”, “global financial meltdown”, “economy falling off a cliff”, “new Great Depression”, and your adrenalin may just kick in.

The news has been so alarming since last summer, I’ve been writing a lot about this developing crisis here in Syntagma. It’s not really the right place for it, though, so Moneyizor has been galvanized as a vehicle for this crucial topic.

“On the day when the UK’s biggest mortgage lender, the Halifax, reported a staggering 2.5pc drop in house prices in March alone, the IMF warns governments, central banks and regulators that they now face a test of their mettle unique in modern times.” An extract from today’s article.

Make sure you keep up to date on Crunch matters with Moneyizor.

It’s happening now in America and is due here in the UK and Europe by summer, if the usual time lags apply.

The recession / depression / crash is on its way like an unstoppable tsunami.

A tsunami is not a “tidal wave”. Waves break and retreat when they hit shallow waters or the shore. A tsunami trundles on for miles inshore powered by tremendous forces out in the deep ocean. No power on earth can stop it until its energy is spent.

Those who think we can stop a deep recession from happening by fiddling with interest rates or printing liquidity are looking at wave science not tsunamis. Now we can only watch and hope.

The signs of families cutting back their spending are everywhere here in Britain. Apart from the super-rich, ordinary folk are drawing in their horns as if they never existed. This mass retreat from the markets is beginning to have a cumulative effect which can only build to an inevitable crescendo.

The banks are barely functioning, except as deposit-takers. When they get our money they hoard it like the early Ebenezer Scrooge — the kind of man who creates depressions or shows us how to avoid them, depending on your point of view.

America is in deep trouble now, deserted even by the Sovereign Wealth Funds of the Orient, who just a few weeks ago seemed like saviours. Now they are pulling their cash out and retreating to the new economies of the East.

The “carry trade” to smaller Western economies, like Turkey, Iceland, Latvia, Estonia and others is falling apart, as will these countries in the coming months. Iceland may well be the first to crack, like some monstrous symptom of global warming tearing apart the ice sheets.

Those that are in the eurozone are being held together only by the common currency, the euro. But the fault-lines are beginning to show and it seems only a matter of time before the whole system snaps in a great twanging of over-stretched elastic. Beethoven would not recognize the new European Symphony about to be played. An Ode to Joy it isn’t.

If we look at all this from a Scroogian perspective though, it’s a kind of deep-cleanse that the world’s febrile financial sectors need — and this is certainly a problem of their making. This tsunami began in the boardrooms of banks and retail lenders, not in the real economy where most of us work — although our greed doubtless helped.

As America contracts, like a crab sensing danger, we can only await the storms to come. And they are the least of it. The unstoppable tsunami is the real enemy.