There’s much talk on the ‘green shoots’ of recovery to be seen in many aspects of the economy, housing, high street, stock market and elsewhere.

Don’t be fooled. We’re not out of the woods yet. There are some exceptionally serious imbalances in how our, and the European economies are presently functioning.

Concerns about the UK economy: The Bank of England has created over £150 billion of ‘funny’ money, called quantitative easing. It intended this phenomenal sum of money to filter into the economy to stimulate activity and stop the recession becoming a depression. There’s much argument as to whether this ‘funny’ money is doing what’s intended. What has happened is that the banks have squirreled it away to bolster their balance sheets. The complete opposite of what’s required. Sources: Liam Halligan says money diverted to hide toxic debt, OECD says UK worst placed,

Concerns about the European economies: Germany the engine of Europe is in deep trouble, it’s economy is based on exporting. This strength is also it’s biggest weakness. It’s banking sector, mostly it’s regional banks, are unsophisticated and still hold massive toxic debt, and are therefore not able to help finance Germany’s export businesses. Nordic banks are exposed to the extreme weakness of Baltic economies.  The Southern European economies are similarly shaky too. Sources: Ambrose Evans-Pritchard says Germany is heading for a second crisis, A Fistful of Euros blog excels in looking at finances in Europe.

I don’t want to worry you, but it’s going to be a bumpy ride through to the end of the year. Even though America is sitting on a 26 year high of unemployment, forget China and India, I think the US will again lead the world out of recession. It’s the creative dynamism of it’s entrepreneurial make-up that will win through, though not without some rocky moments.