The markets are experiencing the joys of hyper-liquidity... The FED has been printing money for Wall Street for over a decade...and it shows...
Of course some of the liquidity occassionally sloshes into the commodities markets...but that is immediately "cured" by bashing gold hard...
And none of the money has gone to the ordinary wage earners...who we all know "cause inflation" ....at least in prices...
Thank God for our de-unionization and de-industrialization, in favor of the Chinese who know how to handle salve labor!
Inflation in asset prices is naturally OK; since only the "responsible rich" actually own assets in significant quantities...
But the hyper liquidity for the asset markets comes at a cost...the trade deficit is very high...as it must be to avoid the "evils" of wage inflation...
And the cheap labor economies of Asia, like China, are now in the catbird seat...as the current high level delegation of American economic officials beg forgiveness for all that new money in foreign central banks...
The current House of Cards will natually fall...indeed it has started to fall with the weak dollar...but at least for now everyone is content to admire the Emperors New Clothes...
Even if that Emperor is the Bank of China!
