There is no doubt that the US economy is currently in one of the deepest recessions since the Second World War, and a self-reinforcing contraction in employment and consumption is darkening the out-look. Worries about a possible debt-deflation spiral pushing the US economy into a Japanese style growth profile have gained some traction. While many of the ingredients for such a scenario is in place - falling asset prices, a credit crunch, delev-eraging and falling commodity prices - one impor-tant element is missing: the lack of policy response.

It will rise in value, relative to most other world currencies.

The key reason being, if the US can't bolster the world economy, absolutely no one else can. Period. End of story. If that is the case, expect a global depression of unfathomable proportions culminating in World War III.