Legendary Swiss investor Felix Zulauf wrote this note to Itau Global Connections newsletter. An excerpt below including his views on: Economies, Stocks, Interest Rates, Commodites, Currencies & more

A short while ago the VIPs and aspiring VIPs of world politics and business met at the World Economic Forum in Davos, a resort in the Swiss Alps famous for great ski slopes, and discussed the state of the world economy and what lies ahead. In contrast to the meetings of the last few years, doubters have disappeared and the general mood was upbeat. Leading politicians pointed to their great achievements in overcoming the great financial crisis and the positive results, although in my view the “improvements” are primarily a result of more money printing by leading central banks due to a disturbing inability to make progress via politics.

However, economic indicators seem to confirm the general mood of an improving world economy, and according to my analysis this may remain so in the first half of the year. Recent numbers released in China, the US, Germany, and even the euro zone as a whole are welcomed good news. The question is whether this improvement will continue for the whole year or not. I will address this question in another report in coming months, as I think it is not relevant now, because coming months should see at the very least acceptable economic numbers. The main exception is Europe, where I see total credit growth now falling into deep negative territory, which makes a sustainable improvement virtually impossible. Spanish retail sales down more than 10% year over year are a shocking reminder that problems in the real economy remain unresolved.

Nonetheless, the investment industry is getting euphoric.

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