‘Davos Man’ is on display this week. With the Alps in the background, he offers his opinions on lazy TV channels.
Our guess: he does more harm than good.
But there they are…almost non-stop — the great and the good, the Establishment, the elite of the elite; they are today’s ‘global leaders’. They get together in their fortress retreat at Davos, Switzerland — guarded by 5,000 Swiss troops — to gum about what’s wrong with the world and how to improve it.
‘We’re going to need to fix our broken supply chains’, says one earnest corporate honcho.
‘We’re doing all we can to develop a sustainable system of energy inputs’, says another.
‘Witing Off’
Klaus Schwab, founder of the sponsor, World Economic Forum, with his heavy Teutonic accent, cannot say the ‘r’ sound. So, he says we will have to ‘wite off the huge costs’ of what he thinks will be difficult year of ‘transformation’.
Of course, the world is always witing off its past…its old technologies…its hula-hoops and failed cryptos. It’s always transforming itself. As we discussed yesterday, things become their opposites…bull markets turn into bear markets…young, dynamic countries become old and degenerate…white shoes yearn for mud.
Mr Klaus, mind you, is not just an observer of ‘transformation’. He’s an activist. His goal is not to follow, but to lead. And therein lies a tale. For how does he know where the world should go? The baker in Berlin…the hod carrier in Karaloon…the lumpenproletariat of Las Vegas — each has his own destination.
No matter. Davos Man knows best.
Ms Kristalina Georgieva, meanwhile, has a delightful Bulgarian accent. She came from the World Bank and replaced Christine Lagarde at the IMF, who replaced Dominique Strauss-Kahn, who was disgraced after he allegedly exposed himself to a cleaning woman in a New York hotel. (The affair looked like a set-up…the charges were dismissed, but not before Strauss-Kahn, who had been a leading candidate to become president of France, was ruined.) Ms Lagarde went on to head up the European Central bank.
At Davos, Ms Georgieva picked up the ‘transformation’ theme:
‘2023 will be a difficult year for the world. The silver lining is we can use it to transform economies & accelerate change that’s good for our climate, good for growth. At the IMF, we recognize our responsibility to be a force for good.’
We’re not going to sit back and see what direction the world takes, she says; we’re going to give it a shove!
Un-free world order
The major challenge facing the planet, says she, is ‘fragmentation’. By that she means that the global order — which Davos Men (and women) helped create — is cracking up. She did not mention the main culprit — the US Government; it has abandoned free trade in favour of un-free trade. Its sanctions, restrictions, and tariffs are now fragmenting markets and reducing the prosperity of the whole world.
And so, Ms Georgieva came to Davos to deliver a report, prepared by the diligent number crunchers at the IMF, showing that if they ‘manage’ the world economy carefully the cost of this ‘fragmentation’ would be only 0.2% of global output. Not 0.3%. Not 0.1%.
Those researchers must have been punching the numbers so hard; it’s surprising the ref didn’t stop the fight. But they just kept delivering the rabbit punches, putting the growth of the world economy at 2.7% in the year ahead.
Their calculation is ridiculous. Imagine trying to determine the effect of unknown events on an uncertain future in a largely unmapped US$90 trillion world economy? To a 10th of a percent!
But what do you expect? The biggest financial event of 2022 was the dramatic rise in inflation — to the highest levels in 40 years. It’s what forced the Fed to reverse its monetary policy…and cost the world asset markets an estimated US$20–30 trillion in losses. (Estimates vary!)
Price tsunami
By spring of 2021, the tsunami of price increases was visible on the horizon. Anyone who bothered to look could see it coming. The feds had cut off supplies of goods and services (with their COVID Hysteria lockdowns)…and they had greatly increased the supply of money (with their stimmy cheques, unemployment toppers, and PPP loans). Consult any Dummies’ Guide to Inflation; you will see that the result is bound to be higher prices. But the economists at the IMF are neither dummies, nor realists; they are fantasists. Here’s a CNN Business summary of their view, as of April 2021:
‘The IMF credited continued government stimulus and vaccine rollouts for stronger growth projections. It said that consumer prices could be volatile, but it does not expect high levels of inflation to take root because of weak wage growth and unemployment.’
Good thinking!
What a wonderful bunch of mental defectives and pompous poseurs. We speak of the whole Davos crowd…as well as their pet economists. It must be delightful — in a childish way, of course — to think you can not only foretell the future…but actually improve it before it happens.
Not content to run their own businesses, governments, and non-profit organisations, they think they can ‘transform’ the entirety of human life on planet Earth…and wite off anything that gets in the way.
Regards,
 |
Bill Bonner,
For The Daily Reckoning Australia
