Devotees of the Terminator franchise breathed a sigh of relief last week: Thursday, 21 April is the latest date predicted for “Judgement Day” – the total destruction of civilisation – but we still appear to be here.

In much the same way, in 2008 many prophets of doom, including some highly paid “experts”, were predicting the total meltdown of the capitalist system, but, like the Terminator writers, they had to keep putting back the date of the fulfilment of their predictions as time passed without the anticipated disaster.

In fact, most of the world recovered fairly quickly from 2008. This should not be surprising. A brief study of the last 300 years of capitalism shows how crises are a regular occurrence, but so are recoveries, and the overall growth in prosperity has continued. Free markets are very resilient.

However, although cyclical crises and recoveries are to be expected, there remain structural problems in many Western economies that need to be addressed. By far the most dangerous is the US federal budget deficit.

Standard and Poor’s, the aptly named credit rating agency, has issued a warning that the US government’s credit status may be downgraded in two years time if nothing is done about it.

The markets take that prospect very seriously. While it remains extremely unlikely that the federal government would ever default, the loss of its AAA rating would be a body blow to business confidence. Although America is not as dominant as it once was, the increasing integration of the global economy makes it truer than ever that “When Wall Street sneezes, the world catches a cold.”

Gold shot through the $1,500 an ounce barrier at the news – when the smart money feels insecure, it buys commodities.

Confidence is not helped by the casual response of the US Treasury, which continues to claim that it has the situation well in hand. It does not – and everyone in business knows it. The longer the Administration denies the problem exists, the worse the problem will get.

Yet we remain optimistic. The last two years have confirmed our belief in the recuperative powers of business in a free market. We are doing our part. If only our political leaders would do theirs.