Stocks rallied higher as poor economic news in the US Non-Farm Payrolls caused traders to push the tapering of QE even further into the future.
The current forecast for stagflation is looking quite realistic. The 'deciders' are making the monetary and fiscal policy errors almost on cue.
At some point the stock market will suffer a break, and correct more than the usual 4 to 6 percent. But with the Fed 'put' firmly in place, I suspect that this will be event driven, and the Fed will try to step in quickly to dampen the effects.
We are seeing asset inflation without a doubt. But the assets tend to be those favored by the financial sector, so don't look for them in commodities and other real things for example.
Have a pleasant evening.
