It is time that authorities recognise that economic growth cannot be generated with macro-economics alone. Micro-economics, especially the encouragement of innovative entrepreneurship is also an essential component.

The fall on gold, China’s downgrade and an unexpected result of Japan’s ultra-loose monetary policy are all adjustments to the 'new normal'.

After five years of waiting for a return to normal economic and market behaviour, let us recognise that “normal” will not return any time soon and needs redefining.

The Cypriot bank bail-out has implications well beyond Cyprus, especially concerning the protection of depositors. The loss of banking trust may have a silver lining.

Some ideas are so stupid that even their proponents will back down. Such is Cyprus bank deposit confiscation. See also the key points of a bridport/Hunt conference.

The Italians are not alone in protesting against excessive austerity. Everywhere, traditional political parties are being disavowed and unconventional parties growing, some explicitly committed to euro or EU withdrawal.

The Italians have mightily protested against excessive austerity, and they are not the only ones. Maybe some good will come out of what most see as a bad election result. Maybe not.

Consider whether there are sufficient good signs in Europe to see this month as the “end of the beginning” (Churchill 1942).

Is the US economy really in better shape than Europe’s?

Some specific issues related to the primary market may be additional signs of a credit bubble.

The outcome of the Japanese experiment is only one question unanswerable except with the passage of time. This week we have three more to consider.

Japan is undertaking an experiment in inducing inflation. Whether the experiment works or not, it will provide many lessons.

Is the current market optimism justified? We look at the USA, EU, the UK and Japan and inclined to “yes, but”. And we ask whether safe havens are dangerous?

We present summaries of the two opposing views of the US economy without hiding our own. We cannot claim Europe is in any better shape.

Good returns on bond portfolios in 2012 have been very dependent on the narrowing of spreads. That is unlikely to continue in 2013, just when yields will scarcely match inflation.

As the euro zone moves slowly federalisation, the question is how to fiscal achieve discipline for each member country. Decentralised à la USA, or centralised à la Germany.

Sadly, our hopes that QE would be ended soon in the UK and USA have been dashed as both King and Bernanke say they are open to continuing their programmes

For many, quantitative easing is good news. We would see its ending as far better news. When might that be? Who might be first?

This week we have challenged ourselves. We have highlighted the positive news which may help the economy in the future! While October revealed a lot of bad news, behind those, there are some long-term trends which developed. Of course, it will take time to solve all fundamental issues and investors need to be patient.

A “phoney war” is underway on both sides of the Atlantic. Like its predecessor in 39/40 all hell will break out quite soon. With the Fiscal Cliff?

Despite low coupon rates, bonds have provided respectable returns based on spreads narrowing. The same seems unlikely for next year and the danger of interest rate increases remains.

Severe austerity is not working, so the time has come to consider alternative routes to regain sustainability. Reconsider the attraction of inflation and of good micro-economics.

Indecision by politicians is now knocking on to corporations, who are obliged to withhold investment until the economic uncertainties are resolved.

Stagnation or slow growth everywhere in the West, but a little optimism about UK employment may be justified. How can jobs grow by the GDP stagnate? Mystery!

In June we saw only headwinds. Now everything seems resolved. Is it really the case?

Rejoice that hope has returned to the euro zone, but keep your eyes on whether and how reforms are pursued, and be worried that printing money has become universal.

Draghi has acted where politicians hold back, giving Europe the break so needed to continue its move to a federal structure for the euro zone.

The banking supervisory role of the ECB and its bond-buying plan may be necessary but lack democratic support. Draghi the politician strikes while European leaders argue.

The August calm has given way to a mood of relative optimism; positive signs are present in the USA and Europe but in the context of a world still cooling.

While markets and commentators are focusing on euro break up, the European functionaries and politicians, if they are working at all, are drawing up rules for the banking union.