It may well be that yesterday will go down in financial history as the day currency dealers and credit managers finally gave up on America. For some months now, the Federal Reserve has been talking out of both sides of its mouth. As of yesterday, it seems to be employing altogether different orifices.

For reasons best known to itself, the Fed chose to announce that the economic recovery isn’t there ‘and may not be for five years or more’. But in case anyone was still in doubt, it also chose to raise the spectre of more QE (which had supposedly been wound down) and more bond-buying by the Reserve. They both amount to the same thing, really – buying bad money and printing new money: two sides of the same coin.

Unsurprisingly, the Dollar fell to a 2010 low against the Yen.

In another excellent column this morning, the Telegraph’s Ambrose Pritchard-Evans noted that now ‘the US has become the problem’. It’s the only thing in the piece with which I disagree: as the Slog’s been saying for months, the US – with its assumptions of eternal superiority and short-termist Wall St – has always been the problem. It’s not the only one, but it is by far the biggest.

As Britain too has found out, financially-created wealth is illusory wealth – notional wealth that disappears once somebody says “3000 Gilders for a tulip?” I’ve too often heard market traders tell me that “it’s all about confidence”. It isn’t: it’s the result of a confidence trick – and everyone in the world fell for it. Even the Chinese – with their new discovery that you can float any old aunt fanny onto the bourses – thinks it can control asset bubbles and keep on exporting forever.

What goes up can and will come down. You can’t eat bonds, build housing with gilts, or sensibly insulate lofts with cash. Ultimately, real trade is about assessing a market, and supplying it with a distinctive product at a realistic price. Branding can justify premium price, and marketing communications can spread the word about quality and advantage. Financial services are ultimately a commodity which can be replicated. Exporting them is like exporting your language: people will pick it up for themselves.

In terms of exports, none of the US, UK or EU have been doing the page one stuff properly for at least a decade – probably two. Their citizens have bought cheap imports from Asia, and borrowed to carry on consuming according to the free-market Friedmanite model. That model – along with globalism – is bollocks, and it always was. Globalism assumes a uniformity of economic cycle worldwide – something that has never been a reality, and almost certainly never will be. Friedmanite capitalist growth theories require a world of permanently indebted consumers….perhaps the daftest idea put forward since the command economy.

More of the same just isn’t going to cut it, but we seem to have political classes in the West who just don’t get this. Perhaps they read the papers, and think that covers it. But it doesn’t: the press – in fact all media – are nothing more than folks giving a daily weather forecast during a period of catastrophic climate change.

Oddly enough, I sense that the UK Coalition (I’m talking Osborne and Hague here, not Cameron or Clegg) do at least realise that Britain will be a nation of paupers within ten years unless we radically revamp our economic output. But even Hague seems unable to grasp that neither the US nor the EU are really where our future lies. Only radical reform of themselves could change that judgement.

But there seems little or no likelihood of that. Despite dozens of obvious clues from the shamefaced leaders of the financial Establishment, the Big Picture continues to elude Western leaders.