It was, once again, an HSBC business breakfast for clients and customers that was very well attended.

Speaking on Wednesday at The Hilton, apart from Chris Bond (whose speech on the Maltese economy was reported in The Malta Business Weekly) was David Bloom, Global Head of FX Strategy at HSBC International.

Mr Bloom’s thesis was how things have changed in the financial sector after the crisis and the impact this had on the carry trade in Forex (foreign exchange). What used to be easy and made for gains, has now become intractable and risky. With interest rates in the G10 countries being almost 0, it has become difficult to make any profit. Everything today has become more complicated. And, as a result of what has happened, monetary policy is not the same today as it was just a few years ago.

In a nutshell, governments today do what they do not allow private citizens to do – borrow and borrow with little to no plan on how to repay it. But the US, for all its borrowing in recent years, will never default. The ease of Quantitative Easing (QE) is that countries such as the US have no motivation to impose austerity when they can keep printing money. The dollar is also the reserve currency of the world. The UK, too, since it has its own currency, printed money.

The eurozone, on the contrary, does not print money and has enforced austerity on those countries in difficulty, starting with Greece and continuing with Ireland, Portugal and Spain. This brought about a harsh climate on the populations and the EU, relenting a bit, came up with ESM and the various programmes that have put in money to help the stricken countries.

The other member of the Troika, the International Monetary Fund, has consistently over-estimated the figures in the field, especially Greek GDP growth.

Over the past years, following IMF programmes, many countries at risk imposed austerity plans and brought their economies to near collapse. Even as the Business Breakfast was being held, IMF officials were still trying to persuade the UK to impose more austerity measures.

The EU, through the ECB and also the Commission, and despite internal wrangling, still tried to stimulate growth through not just ESM but also through programmes such as LTRO and OMT. No country has defaulted, not even Greece, and some countries like Spain have been helped to bring borrowing costs down.

But maybe the problem is still being pushed further down the road.

No country’s QE is exactly the same and many would be reacting to last month’s figures not to the real situation at that point in time.

The US desperately needs growth while Greece, Portugal and Spain had no other option except to impose austerity on themselves.

The US borrows to stimulate growth and if the resulting growth is of four per cent or more, the borrowing would be justified, but if the growth is only of 1.6 per cent then clearly a different strategy must be followed.

The UK economic strategy also aimed at growth but if growth does not come, the economy begins to falter. As Mr Bloom was talking, in London the Chancellor of the Exchequer was making his Autumn Budget Statement, which amounted to much the same thing.

The US now has to face what is known as the Fiscal Cliff – that unless there is a very difficult agreement in the House and Senate − tax easing put in by past presidents end on 31 December and a raft of tax increases comes in. Unless solved, this could wreak great damage on the US economy.

This is where politics come in. Pre-2007, there was no political risk in managing the economy. Now there is. As from 2007, risk has been politicised.

There was a time when it did not matter who was in government: today we worry about the Japanese election that is taking place today. And people also ought to focus on what is happening in China, which has had a change of leadership in the past weeks.

Politics is very much involved with what will happen in the eurozone, but while the papers and the news services have been reporting daily on the euro’s travails, they have not been explaining so much about what is happening in the US with regard to the fiscal cliff and certainly nothing about what is happening in China and Japan.

While the UK papers are always full of doubts about the euro, it is their own country that should be worrying about. The UK can soon lose its AAA status while the euro looks like surviving this crisis. Losing the AAA is the logical outcome of the present British policy. The UK used QE but the economy did not grow. Hence more austerity is on the cards.

Meanwhile, nobody is noticing the rise of the Chinese currency, the Rembimbi, which has appreciated 35 per cent since 2005. It was said that in a decade China attains a growth that took the US 50 years: if that is so, China is still in the 1950s and has further growth ahead. The Rembimbi is slowly moving to become the reserve currency of the world. What is stopping the Chinese authorities from declaring this is they do not want to open up their market to the instability found around the world.

Many in the Anglo-Saxon world have long been predicting the euro is breaking up but Mr Bloom does not think this is the case. On the contrary, what we are seeing in Europe is the beginning of the euro countries getting ever more closely together in structural terms. It took the eurozone two-and-a-half years to get here, and it took some wrong turnings along the way, but it now seems it has got the ESM right.