The long predicted influenza pandemic appears to be upon us, with more than 20 cases reported in the US at this writing. Last year, the World Bank predicted a pandemic would affect the world economy by a 5pc drop in output.

The US government has declared a health emergency, with Homeland Security chief effectively saying “Don’t panic.”

The danger is a kind of pandemic protectionism spreads around the world, adding to its economic woes. Already pork from Mexico has been banned by China and Russia. The ban has now been extended to Texas, California and Kansas. We can be sure that is only the beginning.

A serious 1918 type of pandemic, which killed millions around the globe, would really challenge the world economy and set it back a decade at least.

Let us hope it doesn’t come to that.

If things are bad in America, consider the vertiginous descent of the UK in what is surely the Great Depression 2.0.

Bank of England Deputy Governor, Charles Bean, indicated today that the Bank is moving relentlessly towards the most controversial form of “printing money”, buying gilts, or Treasury bonds.

He spoke in the context of a further adjustment on the downside for GDP this year. The previous forecast was -4 percent. That now has a 75 percent chance of going lower still.

Although the Bank has been tinkering with “quantitative easing”, as it’s known, it was not clear whether it would wheel out the big gun of covering government debt.

Charles Bean also indicated that further cuts in interest rates are likely, falling from the current level of 1 percent to, presumably, the American level of a tiny squeak above zero.

He was said to be relaxed about the fall in sterling and an additional tweaking of rates lower, indicating that the falling pound is not high on the alarm agenda right now.

The BoE believes a further rate cut is necessary before it can begin full-scale quantitative easing.

When America sneezes …

Gerard Baker, writing in the Times (London) today says, “US economic activity is collapsing so fast that it is hard to keep up with just how bad things are. The various monthly data releases are ancient history by the time they are published, even the most up-to-date ones.”

The loss of half a million jobs in November was particularly calamitous. Nothing like it has been seen for 30 years or more.

The upcoming President, Barack Obama, promised last weekend to create 2.5 million jobs by a massive fiscal stimulus. This has to be set against the Bush stimulus last year which broadly had little effect. People simply tucked the money away, or paid off debt.

Obama wants to spend on roads and transport. He also wants money to go to green and information technology-based infrastructure.

Meanwhile the Fed has been using so-called “quantitative easing” in the wake of its dramatic cuts in interest rates. That means printing money and buying assets of all kinds. So far, nothing seems to be working.

Finally, when there are no more cliffs to fall off, we may see some “green shoots” of recovery.

Hold your breath if you dare.

Just about everyone in the financial services sector has been blamed for the credit famine that has almost brought the entire world to its knees. But who really is to blame?

Over at Syntagma, John Evans lays the “seed culpability” on President Carter and President Clinton for forcing banks to lend to people who could never afford the houses they bought.

After much digging around, we can report that, contrary to many attempts to blame investment bankers, as well as retail banks and their customers for the financial fiasco, real seed culpability lies with politicians of the left interfering in the workings of what are sometimes laughingly called “free markets”.

Here’s the timeline:

1977. President Carter passed the Community Reinvestment Act …

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