The situation in the US remains tense as a result of the political problems in the US.

However, the markets have increased in the last few days and the dollar is quite stable. The consensus view remains that a deal to ensure an increase in the debt ceiling will be agreed. The real issue is that interest is paid on the 1st November on US Treasury debt.

The politicians are taking this to the wire as usual but even at this late stage I cannot see a default happening. This political brinkmanship in the US is now a feature of the global economy that the markets are having to become adept at handling. I believe that in time the BRIC economies will try to detach themselves from the dominance of the US in the global economy. There are already signs of this happening but it will take time.

If the US defaults for the first time in its history there will be financial Armageddon and we will be thrown bank to a global recession at least similar to 2008 and probably substantially deeper. The dollar will fall in value resulting in chaos in the world markets due to a substantial loss of confidence in the world's most powerful economy. It will take considerable time to recover.

But, as I have said, the consensus view is that this will not happen. A solution, at least in the short term, will be found as the converse is unthinkable.

Portfolio Management Service

For those investors who have signed up to participate in the Portfolio Management Service I have already made various changes to the content of their portfolios and I think that we have the right mix to take advantage of the upturn that will certainly happen when this issue is resolved.

Please do let me know if I can be of any assistance regarding your existing portfolios or if there are other aspects of your investments and financial affairs that need to be considered at this time.