Over in the UK, where the economy is already shrinking, Ben Traynor looks ahead to the world after this downturn. He sees three major changes to the future global economy: 1) A larger role for governments. 2) Less efficient capital allocation. 3) More protectionism, especially in the US, with disastrous consequences for the dollar.

Fleet Street Daily editor Ben Traynor says yesterday’s $70 spike in gold prices underscores the metal’s importance as a safe-haven investment. The simple truth is: Gold is the place to be when the going gets tough. As Bill Bonner says, gold works as a hedge against both inflation and deflation.

As I mentioned on Monday, I and my fellow Fleet Street editors are at a conference. Basically, I’m in a château in France surrounded by financial experts from all around the world. As you can imagine, the debate has been lively! Hearing the different perspectives on the current carnage is fascinating.

For much of this year the gold price has appeared to be inversely related to the perceived fate of the US economy (the key word in the sentence is ‘perceived’). This is hardly surprising since gold, like most commodities, is priced in dollars.

Fleet Street Daily editor Ben Traynor says Monday’s post-bailout stock-market rally is unlikely to be repeated again anytime soon. And as long as the roots of the financial problem – too much junk debt in the system – still exist, Ben says investors should treat any stock rally with extreme caution.

Things appear to be going from bad to worse over in Britain. The latest growth forecasts from the OECD say the country is already in recession, and is the only major economy to reach this dreaded condition…so far. Ben Traynor at Fleet Street Daily says the outlook is grim for the the economy, the FTSE index and the British pound. But there are still ways to make profits when times are hard.

Fleet Street Daily editor Ben Traynor says more and more analysts are predicting a “calamitous” breach of 5000 for Britain’s FTSE100 benchmark index. Ben says the stock market slump means it is a good time to increase your holdings of cash…

Fleet Street Letter’s Ben Traynor says China’s domestic market will insulate the economy from a fall in demand for its exports. Strong local consumer and investor confidence undermine the theory that China will be shot down by the global downturn. Ben says this is good news for Western investors looking for growth while their local economies stagnate.

Across the pond, Fleet Street Daily’s Ben Traynor says the Bank of England has about as much idea as the rest of us when it comes to the current economic crisis. Worse still, Ben says embattled British prime minister Gordon Brown could do even more damage to the economy as he seeks a short-term reprieve in opinion polls by targeting major oil companies.