I think that the interesting points to come out of this statement are the things which have yet to be said, i.e. – how is all of this going to be paid for? Sure, adjustments to pension death benefits and the slab structured Stamp Duty Land Tax are a massive boost to savers and spenders in the “here and now”, but this equates to a significant cut in tax revenue for HMRC. Ultimately, what goes around comes around, so once the election dust has settled, this will need to be quickly addressed and the easiest way of doing it in my opinion is to increase income tax.

While I’m on the subject, quite why local councils still raise tax on the basis of house prices as at April 1991 is completely beyond me. The highest band of H, relates to properties worth £320,000 and above. Bearing in mind what has happened with house prices since 1991, it is certainly about time that these bands were revalued. In so doing, local authorities would be able to preside over locally generated funding as opposed to being overly reliant on central government hand-outs. In all likelihood there would be some sort of outcry from homeowners in London and the South East protesting against the disparity of Council Tax bills elsewhere in the UK. As a Londoner living in the North of England, it is interesting to see how out-of-reach even the previously undesirable areas have become for young homeowners. This crazy situation cannot go on forever and something will eventually have to give. How can you have professionals like Lawyers, Accountants and Doctors being priced out of areas you couldn’t pay me to live in?

Osborne’s Stamp Duty overhaul, it is said, will benefit 98% of homebuyers. There is a part of me that is pleased, but there’s a bigger part which has grave concerns over the extra boost this will give to an already massively overheated market. In my opinion, there is nothing other than a very hard landing in store, maybe not now, but definitely at some point during the next parliament, whichever colour that may be.

Speaking of “overheated”, the FTSE100 looks too expensive at the time of writing and I am fully expecting 2014 to finish around the 6,500 mark. My daughters both want a new bike each for Christmas, so whilst I’m not expecting a Santa Rally on the markets, we live in hope that Santa can fit a couple of new Raleighs down our chimney. Happy Christmas and a peaceful New Year to all my readers.

I’m no rocket scientist, but when I saw that silver stood at $15.39 today, I couldn’t help but think that this particular commodity seems to have been somewhat oversold. The dollar looks like a very strong currency compared to Sterling and the Euro right now and it would appear that this strength has had a damaging impact on all commodities over the past couple of weeks.

However, I cannot understand or rationalise why the drop in value, especially in the case of silver, has been so magnified. I could be mistaken, but this looks very much to me like a most excellent buying opportunity.

I am pleased that the FTSE100 has shown incredible resilience from mid October to stand above 6,500 at close of play this week, but I do not foresee any particular growth above this level by the time Auld Lang Syne slurs its annual airing. At one stage during mid October, I was beginning to feel rather pessimistic, but the psychological barrier of 6,000 was not breached and we’re all still breathing.

The other main story seems to be what David Cameron will achieve by entering into talks with the Northern European nations and in particular whether he can walk away with a glimmer of hope or some kind of respite from the £1.7billion the UK has been asked to cough up for managing our finances correctly.

The European question appears to be the issue which will define Cameron’s time at the helm in years to come. I believe he has a golden opportunity to use his political nous to outmanoeuvre UKIP, or else he will be consigned to the pigeon hole of historical figures marked “Also Ran”.

How markets respond to European issues generally is something I will be keeping a close eye on during December, but I am predicting a flat end to the year. Captain Flint’s market prediction that “Pieces of Eight” will come good however, could well be worth a little flutter.

I continue to see that stocks remain overpriced amid the latest news from Eurozone powerhouse, Germany, where industrial output seems to be grinding to an inexorable halt. The IMF has also started to see that maybe its growth predictions were a little bit overcooked, leading to forecasts being cut.

It (the IMF) has stopped short of congratulating the UK and USA on their apparent strength and resistance to an otherwise gloomy World picture. There would appear to be an ever increasing school of thought which forecasts doom, in particular for those economies where the level of debt compared to GDP is actually being increased.

China, in particular, has increased borrowing dramatically ever since the credit crunch first started from 140% of GDP to 220% today. To some economies, this can be viewed as easily affordable and nothing to get worried about. But for countries like Italy, the time is fast approaching where it may have to go “cap in hand” to the ECB. After that, I don’t really want to dwell too much on what impact that would have in terms of global contagion.

Anyone sceptical about the supposed merits of paying down your debt sooner rather than later would do well to pay close attention to what transpires over the next year or so.

In simple terms, if you lend some money to a friend and the friend pays you back, you wouldn’t think twice about lending them money again in future if they asked. The problems start when the friend can’t pay you back. You’d probably refuse to lend that friend anything else in future.

Similarly, countries around the World dangerously close to default may find that it becomes impossible to get anyone to lend them any more money, causing an “about turn” in economic growth and future prospects. This realisation may be dawning on the markets and the unthinkable potential outcome may be a factor in why prices have dropped recently.

Both the UK and USA appear better positioned because of their tighter fiscal policies, so it would definitely be a defensive move to have equities nowhere else until this scenario has played out some more.

Ironically, it wasn’t until I was thinking of writing this article on Thursday 4th September that the FTSE100 briefly pushed through 6,900 points; more like an Autumn of 69.

I think most people in financial circles recognise the fact that this is simply an old saying which seems to have endured the many generations of traders and that there is not much science being applied. Indeed, if we look towards the IMA Sector for China & Greater China, you would be kicking yourself all the way round Kowloon Harbour had you sold everything in May and then returned to trade at the beginning of September. All your trading floor buddies would be sitting there gleefully reminding you that your 3 month holiday would have come at the expense of a 10% market return during the precise period you decided to sojourn.

By comparison, the UK market has stumbled and jittered its way to somewhere slightly above 6,800 at the time of writing, caught in the headlights of where to run, following the very sudden realisation that Scottish independence could very well become reality by the end of next week.

How has the spectre of devolution manifested itself with the large financial institutions and what economic impact will that have on the wider economy in the UK as a whole? I can tell you that most of the largest fund houses and banking institutions are currently pulling billions of pounds of assets out of Scotland. Companies are seriously looking at relocating to the square mile. Our fragile recovery is in real danger of being snuffed out completely, which will see us being tipped back into recession by year end.

In a way, I’m pleased that the UK markets have not raced away at the same speed as the other global markets, because I think that these are starting to look overpriced. I have always looked at UK All Companies as a defensive move when I bring it into a portfolio, so I am confident there would be a softer landing if markets corrected now, than if I were to be invested more globally.

Markets really hate uncertainty, so the situation North of the border has done nothing to help, especially since opinion is so evenly divided. We can only hope if devolution happens next week, that markets start to respond positively on account of the knowledge becoming certain. The alternative scenario is that “It Cuts Like a Knife”!

By way of an example, a bank choosing to lend to Banco Bilbao would need to insure against default at a rate 71.31% higher than LIBOR. At the other end of the scale, if you wanted to lend to JPMorgan Chase, you would need to insure against default at a rate 28.57% higher than LIBOR.

The market clearly thinks you are most likely to get your money back if you lend to JPMorgan, but the downside to this will be that the “spread” will be much lower and so will your return.

Similarly, global markets such as the FTSE100, Dow Jones and Nikkei 225 all tend to factor in value and likely returns based upon data released at regular intervals by the various institutions represented.

I got to a stage last year when I became utterly fed up with the continuous positive market/economy lines being spouted by various industry pundits. I’ve been researching IMA Sectors every month for over 10 years and what worries me most at the moment is the very narrow range in which we seem to be trading. This makes me wonder whether markets are just happy to bump along continually without much fuss, or if there is an as yet, unexplained underlying issue which has resulted in this sideways movement.

The problem I have with the FTSE100 breaking through 7,000 points and beyond is this: The FTSE100 is a true representation of the market capital of the top 100 companies in the UK. If the UK continues to trade with an annually huge deficit (much more being imported than exported), then where is this extra capital going to come from exactly, which is supposedly going to see the markets ride off into the sunset? I’m not buying it.

I asked a fund manager last year exactly the same question and he told me that the FTSE100 should be trading at 10,000! I think he was more interested in enticing me to ply his fund with my clients’ money. Luckily, I could quickly identify that he didn’t have an answer, so until I get a satisfactory response, I will be exercising caution until further notice. The FTSE100 is currently quite close to its historical high point, so I am inclined to believe that the next significant move will be down.

One other interesting piece of news this week came from the Financial Conduct Authority, who have tabled a suggestion that the banks should in future, be able to certify their staff as “Fit and Proper” instead of the regulators. As you can imagine, this went down a storm with the IFA community. In my opinion, we have yet to recover from a bank-led financial meltdown, yet the very bodies who are in place to protect us from this awful scenario ever reoccurring, seem to have accorded both forgiveness and trust prematurely to the far from rehabilitated culprits.