Sir, – A simple explanation for the current financial crisis. Greece, Ireland, Spain, Italy, Portugal and others, including the US and UK, have been running huge deficits on their incomes and expenditures. The deficits have been financed by enormous borrowings from the banks in these and other countries, (including state-owned banks in China). The banks treated these borrowings as loan assets on their balance sheets. Deficits are not assets and a huge chunk of the world’s capital has disappeared as a result. It used to be called eating the seed corn. – Yours, etc,