‘More than $114 billion exited the biggest U.S. banks this month, and nobody’s quite sure why’. So said several prominent websites today.

While the sentiment is accurate, it’s not as if there are no reasons why at all. The US’s unlimited bailout for current accounts held there came to an end on December 31st 2012. So some nervous (aka far-sighted) folks in Dollar accounts will want out. And in a more general sense, Europe is repatriating money at the minute with other projects in mind: for example, buying top-end properties…which are still going through the roof around the globe, as reported first here last September.

This isn’t to knock those who spot such things: I don’t have time to do it, so I’m grateful for the hawkeyes of others. I’m also grateful for the knowledge of others still who tell me the know-all stuff that was in the previous paragraph. But the problem remains as I’ve been diagnosing it since the turn of the year: the big guns are putting more and more fixes into every sector where they have a vested interest in value manipulation. The only difference now is that they’re being more overt about it. As a reliable US source wrote to me today, ‘Draghi and Bernanke have killed all the signals of stress in the financial system and the rapidly evolving bubble-itis in the equities markets of the US, UK, and EU; the next symptom to appear is rapid hemorrhaging of account balances, and then margin calls at hedge funds leading to selling of all kinds of uncorrelated and seemingly safe assets.’

Nothing is safe in 2013, and no call must make sense. The stock markets are way overvalued, but that doesn’t mean they must fall. Gold is way undervalued, but there is no longer a law that says it must rise. US and UK bond yields are farcically low considering the medium to long term risk, but they too can be smoke-mirrored into another Universe where big is small and old is young.

However, these things can’t be continued forever. That is absolutely impossible in a three-dimensional existence.

There was a very interesting (often for the wrong reasons) piece in the Telegraph today by Kamal Ahmed, The five things you need to know about Davos 2013. Ahmed noted that ‘….the general mood of Davos has been optimism….American fundamentals are better, the eurozone crisis has abated….Dr Xiang Bing gave an electrifying presentation on Thursday, claiming that it was a total “misconception” that China operated a closed, state-governed economy…..Much of the conversation has been dominated by how countries are approaching their currency as a tool of growth….The big message from [Russia] is that it is a place to do business. The  economy is expected to grow from $2 trillion (£1.3 trillion) in 2011 to more than $3.2 trillion in 2017……Mark Carney, the next Governor of the Bank of England, has been in Davos…..[his] big fear, I’m told, is that controlling shadow banking will not be high on politicians’ agenda. Why? Because they don’t understand it.’

It was an interesting column chiefly for the almost entire lack of common sense in much of the sentiment reported. For those who find this harsh, I pose the following:

1. Optimism based on US fundamentals and an abating euro crisis is not the kind of optimism I’d ever want to sign up to. On the whole, I’d rather be in Harare.

2. Xaing Bing can boff on until the 12th of never about Chinese genius: without markets to export to (and with weak consumption at home beyond the wealthy 7%) recession and unrest there are inevitable.

3. Countries that use their currencies as ‘a tool of growth’ need to learn the law of retaliation. Growth comes from making and delivering stuff of high quality at the right price, not farting about with fiat paper.

4. I am at a loss to understand why Russia is ‘expected’ to grow given that world demand for energy (on which it heavily depends for export income) is about to fall off a cliff.

5. If politicians still don’t understand how mad it is to create a tenfold inflated poisonous funny-money stratosphere above the oxygen of real commerce (in which leveraging levels are at times over 10,000 to 1) then it may well be time to start digging wells and rotivating the fairways of the world in favour of potatoes and walnut trees. Because let’s face it, carbs and proteins taste a whole lot better than bullshit.

The simple point I am trying to make here is this. Even if the MoUs are tampering with the speedometer, it doesn’t mean the cliff has disappeared. It just means we no longer know precisely when the Ford Edsel will career over it and onto the shards below, exploding on impact. It emphatically does not mean that the automobile will sprout wings and soar high into the infinite peaks of eternal economic growth. It really doesn’t.

Let us now don long trousers and recap the five things you should know about the bollocks coming out of Davos: the US and the EU are trading insolvently, 9 out of 10 Chinese can barely consume a Hershey Bar let alone ten billion solar garden lights, selling your currency and buying those of competitors is a zero sum game, Russians are good at gas, fraud and espionage but not much else, and derivative bazookas have a tendency to blow up in one’s face.

To those who insist on seeing the Davos attendees as a tight-knit regiment of psychotic humanity-cull fanatics, I can only offer this observation: if that really is their plan, then we are all as safe as houses. For people who can cling to optimistic delusion in full sight of an Andes of evidence to the contrary couldn’t hit the side of a barn with a peanut from three inches away.

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