It’s a quiet news week (as they say) so far. But as I posted last Saturday, a lot of the élite’s diaphonous veil of defence is being lifted. The World Economic Forum’s 2013 report talks of a widening gap between rich and poor, and unsustainable government debt, as the overriding problems we face – an interesting sign that the WEF is prepared to almost say “Yup, this neocon stuff is indeed complete tripe”. But then, it said the same thing a year ago, and for those of the brass neck-fittings, it cuts little or nothing….especially not slack.
Mohammed El-Arian, however, wrote a piece in today’s (paywalled) Financial Times openly admitting that sovereign and central bank fiddles had made almost every market a mug’s game for the investor. El-Arian – one of my top four insighters in the world today – noted that ‘unusual central bank activism has artificially elevated certain asset prices…Several asset classes now have highly manipulated prices due to experimental central bank activities’. You’re right Mo my man, and no mistake: expanding central bank balance sheets tell a pretty obvious tale – and not always of elevation. Gold suppression is now so obvious as to be almost a thing that needs mathematically factoring in. As Pimco Man adds, ‘Have no doubt: central banks are both referees and players in today’s markets. With 2013 starting with so many liquidity-induced deviations, investors would be well advised to take greater care when pursuing opportunities that rely mainly on the “central bank put”.’
Of course, one could phrase this opinion more bluntly, as in “The whole deck of marked cards is also rigged just to be sure”, but that’s the job of a free press, not Mohammed El-Arian. More often than not, the press has avoided being free by tying itself in knots to date. But Jeremy Warner broke out today to write this:
‘Britain has not enjoyed a trade surplus in goods since 1981, or more than 30 years ago. This long-standing weakness has been partially compensated for by a relatively large surplus on services, and on overseas income, but even so, Britain has been in overall current account deficit ever since the mid-1980s. In other words, the UK has been persistently spending beyond its means. Despite the crisis, it shows few signs of changing its ways.’
Based on previous form, it could easily be true that nobody told Jeremy the order of the day is to shut up and take orders (much of his output suggests that Mr Warner never consults anything much beyond a 1954 Ready Reckoner) but I have to admit that his piece today did act as a slap across the face for anyone in denial about the depth of poo in which we find ourselves.
So sports fans, the segue into complete chaos is becoming increasingly obvious, the spin decreasingly convincing. The awareness of Greek embezzlement, Spanish bank insolvency, Italian misreporting, British water-treading, Russian roulette, Chinese not very inscrutable hard landing outcomes, and American deckchair rearrangement is spreading…..and the counter-arguments are fading away. There’s a long way to go before Debbie Culcha awakes from her sofa-induced slumber – and the distractions are still myriad – but deception is now becoming much more difficult. And although the distortion factor is constant (‘the Basel Committee has decided to opt for a “graduated approach” to avoid “disruption to the orderly strengthening of banking systems or the ongoing financing of economic activity”) once the price of pizzas, Malibu and Southern Comfort starts to climb, none of the jargo-bollocks will amount to a hill of beans.
Up until this point, the inevitable future could be hidden behind the detail of today’s news. No more: the gloves are off, revealing the hairy hands and wolverine fingernails beneath.