Still no good news on the macroeconomic front.

American investment bank Goldman Sachs believes that America will lead Britain and Europe out of the credit crunch.

In many ways that’s a statement of the obvious since the U.S. economy is usually nine months to a year ahead of its transatlantic partners. And whereas Ben Bernanke at the FED and the Government in Washington have pulled out all the stops to limit the damage, Britain and the eurozone have been slow to react and have concentrated their fire on the dangers of inflation.

David Viniar, Chief Financial Officer at Goldman’s said, “March was the low point up until now, but if I try and predict the future, I am likely to be wrong.

“Do I think we are through? No, I don’t, but I think there is a lot behind us. Now there is less concern about systemic liquidity risk. People are focused individual investments and credit.”

The real danger now appears to be inflation, driven by oil and food prices. That would be reduced by a worldwide downturn. Experience tells us though, that once inflation sets in, it’s a long hard slog to get rid of it, simply because the remedy is recession itself.

Goldman Sachs appears to be enjoying a “flight to quality” effect as the economic downturn hits America. Its position is strong, since it seems to have avoided the worst losses in the structured investment vehicle scandal. Investors now see the bank as a safe haven.

The Bank of England today refused to be drawn down the U.S. route of swingeing rate cuts as it held them steady at 5pc.

New Irish Premier Brian Cowen with President Mary McAleese

The hiatus was fuelled by the inflation clause in the Bank’s remit from the Treasury in the face of unremitting pressures on world and national prices.

Other voices were insisting that the credit crunch will be with us for two more years leading to widespread mortgage “rationing” by banks and lenders.

However, a consensus is building that a “Great Depression” is not in the offing as the resilience of the banking sector — with plentiful central bank support in america, Britain and Europe — is proving greater than many expected. Some commentators are even forecasting a “soft landing” for Western economies.

However, a two-year credit crunch will decimate the housing sector on both sides of the Atlantic. Particularly hard hit will be be the Club Med countries and Ireland, which is undergoing a particularly harsh decline in its house markets.

New Premier, Brian Cowen, has a hard road to travel, as the principal driving force of the Celtic Tiger economy comes to a standstill.

Jonathan Pierce at Credit Suisse — itself in the wars over structured debt obligations — thinks that Barclays is facing a near £10 billion ($20bn) of losses if it follows Royal Bank of Scotland in adopting a conservative estimate of its mortgage assets.

RBS declared £5.9 billion ($12bn) last week and has opted for a £10 billion request for cash from its shareholders.

Barclays will, we understand, keep its losses confidential.

It looks like blue-chip Barclays will be the next major bank to announce a rights issue, or look for outside investors, possibly from the sovereign wealth funds of the Middle East or Far east.

I’ve written a post in Syntagma on how 9/11 caused the credit crunch and most of the problems now facing the world.

These problems include, rocketing food prices, chronic wars in the Middle East, the credit crunch, high oil and commodity prices, and the slow motion global recession.

On the credit crunch. Economist Joseph Stigler’s book The Three Trillion Dollar War 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.

Together will 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 the words “Great Depression” hanging over us again.

On commodity prices, led by oil, now standing at close to $120 a barrel and its knock-on effect in all other markets, especially food, the same argument applies.

“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.”

Read the whole of the article.