The gold rush, which has pushed the price above $3300 an ounce, is starting to distort the global economy with spending on the metal rising to an estimated 0.5% of the world’s gross domestic product (GDP), a 400% increase on 20 years ago. That calculation from Citi, an investment bank, is one of the startling findings in a report which said that the gold price should remain elevated through the September quarter but possibly start ease towards the end of the year. “Gold demand is firing on all cylinders at present, with 0.5% of world GDP currently being spent on…

As I’m sure you have heard, Moody’s downgraded US debt last weekend. The stock market panic that ensued lasted for, oh, about an hour of trading. Why did this already get shrugged off? It’s a classic empty-calorie headline. The practical impact of the downgrade to top holders of Treasuries—banks and pension funds—is nil. Treasuries are still classified as top-grade collateral, which means banks can continue to leverage these securities. T-bills are just as good as cash for bank reserves, as they were before the downgrade. No need to scramble for new collateral. And Treasuries still have investment-grade status, which means…