Regular Sloggers will know the cynicism here in the Roost about paying much attention to what bigwigs say. Much better to observe what they do. Take American business for starters.

U.S. companies are holding more cash in the bank than at any point on record. This means two very important things: American business expects the recovery to falter, and the EU to turn into even more of a basket case; and by neither investing nor hiring, the hoarding becomes a self-fulfilling prophecy of faltering recovery.

The US Fed Reserve yesterday revealed that outside of financial services, companies had squirreled away 1.84 trillion dollars in cash and other liquid assets by the end of March.

That’s an increase of over a quarter from a year earlier – and the largest-ever increase in American history. Cash in total was over 7% of all company assets – the highest level for nearly half a century.

This widespread demonstration of corporate nerves is very similar to the US corporate manager’s unwillingness to buy own stock just before the 2008 debacle – when again (as the Slog’s predecessor nby reported at the time) everyone was being gung-ho in public about the economic outlook.

The banks’ conservatism about lending (US money-supply is at its lowest since 1929) is a further bad portent. Obama is asking Congress to cough up $30 billion to bankroll small business, but this is just more Presidential window-dressing. However, the American mess has a long way to go before it gets anywhere near the pit of insanity now pertaining in the EU.

European Central Bank chief Jean-Claude Trichet (pictured above) has gone all coy about how much sovereign junk-bond wallpaper he’s currently buying. He says it’s nothing to worry about, but won’t show us his workings-out. Unlike with Christine Lagarde of France, we can at least be sure that there are some workings out: but this is like telling the police you’re innocent but no, they can’t come in.

Monsieur Trichet was however good enough to acknowledge “renewed strains in interbank-lending markets”, banker code for “I’m keeping their money safe while business dies of fund starvation”. As we noted last week, the eurozone’s banks have stuffed record sums of cash into the ECB rather than lend it out to each other…or something productive like I don’t know – an export company maybe.

Anyway, having delivered severe doubt unto the media, Jean-Claude then raised the EU’s growth forecast for 2010. The Euro’s exchange rate promptly improved – which was, let’s face it, the sole point of the exercise.

Perhaps what all this goes to show is that if you believe all the balm being dished out, then you must be….somebody on a Bourse trading floor somewhere. All the major markets made gains yesterday. There is not a single viable empirical reason why they should have done that, and there are no factors whatsoever likely to stop them yo-yoing down again once the sheer weight of evidence finally permeates the heads of those folks in the funny-coloured jackets.

It’s no way to run a railroad, but the train’s dive off the cliff and reduction to scrap-iron is the only thing that will change the management.