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Just when we thought it could not get any worse, the Hungarians popped up last week with the new government stating that the previous government had vastly understated their budget deficit. "Greece no. 2!" the market screamed and EUR-USD promptly dropped 3 cents to trade below $1.20. The panic then spread to the US equity markets where they promptly shed another 3%. Sterling meanwhile emerged trading at the dizzy heights of just below 1.21€ against the Euro.

Yesterday the Hungarians said they had been misquoted but the damage had already been done. Banks once again are parking billions of Dollars & Euros every night with their own Central banks rather than lend them out to the market. This is a worrying sign as this liquidity is vital to keep the global economy moving and if the banks stop trusting each other, what hope is there for the rest of us?

Back to Europe and the UK has now joined Spain, Portugal & Italy in the game of "my austerity package is bigger than yours". Unfortunately for those countries involved, the judge will be the global markets and not Simon Cowell!

Spain has now suffered the double whammy of another downgrade, coupled with a looming general strike! It also looks like an election is imminent in Spain... "Deckchairs on the Titanic" I hear you shout and you would not be far wrong!

When you couple that with the fact that the US deficit is expected by 2015 to swallow up most of US GDP, you don't have to be Sherlock Holmes to get a strong feeling that the West has got it very, very wrong.

Let me share with you a tale told to me by a colleague this week - He had just returned from a trip to the Middle East and Africa. As he left Heathrow he saw a fleet of strike ridden BA planes as he flew on an Emirates A380 airbus which holds over 700 passengers. His plane was full while the average wage of the cabin crew was $1000 per month. Both the Middle East and Africa have low wage costs and still untapped consumer demand and I am not talking about China or India. The future seems to be in Africa, Middle East & Asia whilst the West could be looking at years of painful readjustments, job losses and strikes.

And it is still not out of the question that the Euro as we know it could change rapidly and may even disappear in the next decade. "The Euro will be dead in five years"- was the startling view from an interview with 25 leading city economists in a Sunday newspaper this weekend. The article suggests that the 16 state currency may not continue in its existing membership "for a week let alone the next five years" as the anaemic growth in Europe makes the project no longer tenable.