World financial markets have recently shown increased volatility. What is less often noticed is that beneath the day-to-day tremors the corrections of the last few weeks have, on the whole, been benign.

For example, the shake-out in commodity markets has come after a period of extremely rapid rise which, if continued at its old rate, would have been a warning sign of inflation and brought forward world monetary tightening. Even the gold price, which nearly doubled in the past three years, has now slipped back. The dollar has edged downwards, together with sterling, while the euro has edged upwards. Real long-term interest rates have rebounded from almost unbelievably low levels. And equities have come off their recent and unrealistic highs.