Not much more than two years from one of the greatest financial panics in history, sentiment is now as bullish as it has ever been. The global economy grew 4% last year and is likely to do something similar this year, while the global share index is up 25% in six months and 90% from its low in March 2009.

In January 1932, the Dow Jones was still almost a year away from bottoming and the global economy was in the depths of a depression.

Normally after a 90% rally and with almost universally bullish sentiment, you’d be heading for the hills, but there are profound shifts taking place that make the current situation more complicated.

The explanation of the difference between 1932 and 2011 could fill libraries, and now doubt will, and to some extent it simply comes down to the compression of time due to faster communications: these days everything is instant; in the 1930s you had to read the paper.

But one of the big differences is the politics of money these days. Back then money was a constant, a fixed idea, and not just because of the gold standard. National and personal debts were something that got paid off.

In 2011, money can be worth something different every day and debts are as permanent as the pyramids.

Nearly two and a half years after the panic, the US government is still borrowing and cutting taxes and the Fed is printing money. Interest rates everywhere except Australia remain super low and the only governments trying to cut spending and increase taxes are being forced to do so by worried lenders.

Moreover there is a profound disconnect between the corporate world and the political one. Profits and share prices are rising, and executives and investors are extraordinarily optimistic; politicians and central bankers are still stuck in the GFC, especially in Europe and America. China has moved on to inflation-controlling mode, but its authorities are still printing money to maintain employment by artificially holding down the yuan.

To reduce unemployment and stay in power, politicians are still debasing money. The Fed is about to begin its next round of quantitative easing, even though some economists are forecasting 4% growth this year, and President Obama has now renamed his “Economic Recovery Advisory Board” the “President’s Council on Jobs and Competitiveness” — it’s no longer about economic recovery but about employment and exports, and therefore the currency.

Companies, meanwhile, have snapped back to health partly by not hiring, thanks to technology.

I rang a phone company yesterday and had quite a lively conversation with a computer. She had a nice voice and seemed genuinely interested in what I had to say: if I weren’t married already I would have asked her out. But she doesn’t eat or drink and can handle any number of inquiries at once.

We are increasingly shopping online. To the extent that live human beings have to be involved, companies use the ones in China or India or the Philippines. As they become more expensive, it’ll be Africa.

Two things thing happened at once in 2007-08: bankers rediscovered risk and reduced the supply of credit, and the second wave of the digital revolution got under way in earnest.

Credit markets are now operating in the “new normal” — that is with properly assessed risk — and will keep doing that until a new lot of bankers come along who don’t remember the last bust.

And technology will continue to suppress employment, especially in the biggest employing business sector — retail.

And that will probably lead to inflation, since the only thing governments can do counter this is to reduce the value of money by printing it, borrowing it and lowering its prices.

*This first appeared on Business Spectator.