Poor Mervyn King, I've just been back in the UK coinciding with his public TV question time by a load of naive MPs pretending to be real experts on the world and finance and questioning him about why he took the stance he did with Northern Rock.

Personally, I think he was spot on not to get involved with Northern Rock or any other bank having problems, they should be allowed to stand or fall as independent businesses. Do we bail out every corner shop with a "cashflow" problem? Should we?

A lot of the questioning was very naive, and seemed to be based on what the MPs thought up after reading the morning papers and now we hear that the British Government is to increase the banking deposit guarantee limit to £100,000. Aargh! How easy it is to be generous with the taxpayers money, and worse still, the vague statement that this would be funded by a levy on banks means that actually the decent, well-run banks subsidise the risk-taking dangerous ones. Any large guaranteed deposits scheme only encourages banks to take yet more risks. This is a bit like adding a load of extra Vodka to the punchbowl.

At this moment in time, I would not be surprised to see a repeat of 1925-29, with a huge run-up in stock prices as more money gets pumped into the economy by the Ponzi scheme that is fractional reserve banking, followed by an almighty bang, on a scale of the 1974 90% stock market drop.

Don't sell yet, but enjoy the ride and keep your finger poised on the sell button! (oh, and hold some gold!)

Going back to my earlier article though, I still insist Northern Rock has some assets and would watch to see who makes a move.