In Europe, the powers-that-be are stopping the money-printing machines. Over in the US the Federal Reserve has just announced another round of quantitative easing. It is not easy to say who is right in this situation.

It might be the case that nobody is right, said Patrick Young, the editor of The Gathering Storm – a book looking back at the crisis and forward to financial doomsday. “The difficulty is that when you’ve drunk three bottles of vodka, you think you’re capable of putting the world to rights. But you know you’re going to wake up in the morning with a terrible hangover. This is the point at which we wake up in the morning with a hangover,” he adds.

In The Gathering Storm, a group of financiers got together to say that governments have learnt nothing from the crisis. They believe that policy makers are applying old models in their economic projections, which could lead to inflation, hitting ordinary people hard.

The situation does not seem sustainable for very long, warns Steven Lewis, a founding partner of the Monument Derivatives. “Looking at the fiscal positions in terms of the size of the deficits that governments are running in relation to the size of the economies, yes, we are facing the sort of conditions which would be more associated with wartime than with peaceful, prosperous development,” he explained.

Sooner or later, debt will have to be repaid, and restructuring will have to begin. In the City, there is a fear that people are in denial, being misled by a false sense of security.

“We shouldn’t assume that the period of extreme global weakness that followed the Lehman Brothers collapse is the worst episode in this long-drawn out depression. There could be much worse episodes still to come,” Steven Lewis told RT.

Those “worse episodes” could soon arrive because as early as this week the UK government will announce extensive cuts to public services, including defense and education.