Today is that time of the month again, and by the time you read this you will probably know what the Bank of England and European Central Bank have elected to do. For the UK’s central bank the question is when, rather than if. It seems clear interest rates are going down soon, but whether it is today, well, since you will be reading this article at least 6 hours after it is being written, you are in a better position to judge; by 12 o’clock the cat will be out of the bag.

The European Central Bank has a tougher call. Inflation in the Eurozone hit 3.1 per cent two months ago, and stayed there in December. Yet there are signs the Eurozone’s economy is slowing. Perhaps the problem relates to the euro itself, for while inflation in some countries is rising - it hit 4.3 per cent in Spain last month - in others, such as Germany, it’s falling.

Talking of Germany, the runes could be suggesting the economy is stalling again. Industrial production fell 0.9 per cent in November, while retail sales fell 1.3 per cent on the previous month. The good news: no one is talking about Germany hitting recession at the moment, but the economy now looks set to grow a lot more slowly this year than was previously expected - and remember, with the US coming off the rails, Europe, and that very much includes the UK, needs a strong Germany.

But cut through the dilemma facing the ECB and an even bigger challenge is revealed, for right now the rationale for a rate cut is matched, it would appear, by only one thing, and that is the rationale to increase the rate of interest.

For the last ten years or more, the Fed and European Central Bank and the Bank of England, have played with the rate of interest, keeping inflation in check, but not so much that economic prosperity was unduly affected. In the US and UK, and some EU countries, the result has been economic boom. Make no mistake, for many developed countries the last decade or so has been a golden age for economic growth.

Yet, by slashing interest rates, a property bubble was created. Some say that in future the Bank of England’s inflation remit should cover inflation of asset prices, but then, which asset prices? If it is told to take into account house prices, maybe it should worry about shares too, but then while house prices have shot up this decade, shares, at least shares on the FTSE 100, have fallen. So if asset prices were included in the inflation data, the UK’s central bank would have to take into account even more contradictory data; the resulting equation would become far too complex.

Maybe the answer to the problem already exists - it’s called the Retail Price Index - which includes mortgage payments and council tax - perhaps the decision to make the Bank of England target the CPI figure earlier this decade was a massive mistake.

But then again, back in the early years of this decade, deflation was a very real fear. Economists were thinking about Japan, and how it left it too late to fight deflation, and found even zero interest rates were too high. As a result, the economy of the rising sun has been something of a land of permanent economic sunsets over the last decade and more.

So it was the fear of deflation that lay behind the decision by central banks to slash interest rates - we can blame them for going too far and creating a debt bubble - but then again, if they had been more circumspect in reducing rates, today we might be blaming them for creating an economic depression.

But the dilemma is made even more difficult when you take into account the Japanese wilderness years were preceded by soaring asset prices - and a property market explosion that couldn’t possibly come to an end because, after all, Japan was a highly and densely populated island. Yet the bubble burst, and the pain was far too serious for the Bank of Japan’s prescription of economic paracetamol to work.

As we said earlier this week, the British economic depression of the mid-19th century followed a boom in the construction of railroads, and the 1930s depression followed a period of massive technological advances - rising productivity can create the danger of demand lagging behind supply, leading to recession, or even depression. Such a crisis can be avoided by borrowing from future earnings to push up demand.

Also bear in mind that in the US, inflation is measured using a system called hedonics. We all know that PCs and TVs and mobile phones pack in more features per dollar these days. Well, in the US that is taken into account, so if, for example, PCs stay at the same price, but become more powerful, then this change is shown up in the data as negative inflation. As a result, US data indicates lower inflation figures for the US than they would if they used the same criteria that the British Office for National Statistics employs.

Then there are the massive rates of savings in China and Japan. In Japan savings are high because of the economic uncertainty, in China it’s a cultural thing. When global savings are high, global deflation can be the result. So by their high spending, US and UK consumers were merely re-addressing the balance.

So what’s the answer? Well, actually, there is no clear answer at all.

We are too keen to cast blame, to look for someone who we can say is responsible for the mess. But maybe the real problem is this - it’s just the way it is.

To the charge that Alan Greenspan and Gordon Brown are responsible for creating an unbalanced economy with too much debt and too reliant on consumers, we would say they are innocent.

To the charge that Gordon Brown tried to take credit for the good times, when actually, economic prosperity was down to factors largely beyond his control, we would say guilty.