Four years of Olympic navel gazing starts here -- and it's about time the Brits got on board. As a nation we so love moaning about our capital city, London, that we ignore the cool rating it gets from the rest of the world.

We so enjoy a good whine about the weather, public transport, queues, and each other that we lose sight of the values of creativity, fair play and tradition that draw people around the world to these shores. At least we have put one topic of contemplation to bed -- that of the "gifted amateur" approach to sport that has dogged so many of our national sporting performances. This Olympics demonstrated that Brits also know how to win at things! That should now be the starting point for the preparations for 2012.

Go Buy a Porsche

The Olympic performance might be one of the few positives to cling to as the latest UK growth data shows the economy grinding to a standstill in the second quarter. Our guest host this morning, Ralph Silva of Tower Group, thinks the risks of European countries going into a Japanese-style period of stagflation are rising.

If this happens his advice -- not entirely without merit -- is for investors to be prepared for a very long period of very little gain in financial markets and instead spend any surplus cash on sensory gratification through sports-car ownership or whatever else excites. After all, inflation will erode the value of the capital and financials assets may do little to protect it if we continue to see a contraction in corporate profits. Welcome to stagflation.

Ralph strongly believes the next crisis for investors comes in the commodity markets where traders will be left holding futures that no one else will buy.  He suggests some of them should start building storage facilities as they need to prepare for delivery! If this plays out there will be some more pain in the hedge funds that moved in bulk into the commodity space as a hideout from the financials. Few participants in the real economy will grumble about lower commodity prices.

Jackson Hole

The European central bank hawks were still on message at the gathering in Jackson Hole. We played some clips of Axel Weber, ECB council member, who insisted there is a risk of prices continuing to rise. This week will be an interesting test of the central bank's metal -- starting with the IFO survey on the German economy on Tuesday and a euro-zone sentiment survey towards the end of the week. With a number of European economies either in, or flirting with recession, the market is increasingly looking for a shift in tone.

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