O dear: the government is making the same mistake with the housing market as those finance directors who launch buy-back programmes into a falling market. The weight of the buying is insufficient to push values higher and the purchasers soon realises they have overpaid.

The preview of the Queen’s Speech flagged a scheme to provide £200m for buying new homes and renting them out. The government may now be spending money like it is water, but luckily that sum is peanuts in terms of the housing market. It will probably purchase fewer than 1,000 homes – though that should be welcomed by a beleaguered house building sector.

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The pound is strong against the dollar and weak against the euro. Something is wrong and it is the dollar.

While Britain historically measures the strength of its currency against the US currency, our trade is with our European neighbours so we are net losers from this foreign exchange imbalance but it is one that will surely start to turn.

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With the oil price rising through $10 a barrel, the only thing likely to halt the escalation is recession. But if economies go into recession, one of the main causes will be the high oil price.

This is not so much a circular argument as a self-correcting mechanism, like the governor on a steam engine. Oil prices rise, economies slow, the demand for oil falls and the price of the commodity deceases accordingly.

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“This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

Bank of England governor Mervyn King could have borrowed those words from Winston Churchill – delivered at the Mansion House, just opposite the Bank, in 1942 – for his latest stability report. He did not exactly sound the all-clear on the credit crunch but he has suggested the worst is over.

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There is dangerous talk of allowing debtors to default. It has started in the housing market but could spread to business.

The argument is that corporations should not squeeze people who have difficulty meeting their dues. Mortgage lenders are being asked by government to go soft on homeowners with rising mortgage costs rather than repossess their properties. It is suggested the lenders swap their debt for equity rather than evict.

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Two questions for Royal Bank of Scotland about its much-leaked record share issue: why pay the final dividend, and why underwrite the rights? They are questions that should concern any finance director planning to raise capital this way.

First the dividend. Normally the argument is that the dividend must be maintained to encourage investors to buy the new shares. But why pay cash to shareholders so that they can pay tax on it and then ask them to pay the money back to the company?

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Oh no, the Government is being asked to buy the banks’ bad loans. Banks that no longer trust each other enough to lend among themselves are hoping the UK government will use the Bank of England to buy the mortgage-backed securities that they cannot sell in the open market.

The theory is that they will re-lend the cash to businesses or homebuyers and get the economy going: our fear should be that they will use it to pay the higher dividends they have promised their shareholders, finance the bonuses of the staff who got them into this mess or, worse still, make more bad loans.

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The IMF is gloomy, but if this is as bad as it gets we should rejoice. The International Monetary Fund thinks UK economic growth will slow to 1.6 per cent this year and be no better in 2009. But that is still plus 1.6 per cent: at the bottom of previous cycles there has been a negative sign in front of the figure.

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It is too late to deny that UK house prices will fall: we are now at the stage where the fall will be self-fulfilling.

Property prices matter because for the past decade they have given consumers confidence. They have also given consumers cash. Remortgaging has allowed owners to convert their inflated equity into money that financed home extensions, foreign holidays, new cars and student education. Remortgaging allowed Britain to live beyond its means during the past decade.

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They are tampering with our coinage. The Royal Mint has produced new designs for the change that jangles in our pockets but by doing so it has added to the pressures on inflation.

The public must have respect for the coins and notes in circulation, not only in terms of them being genuine and readily redeemable but in representing value. If coins look like Mickey Mouse money they are treated as such.

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