Exactly.
We are in an unusual time where there are strong inflationary pressures and strong deflationary pressures and they are holding each other in check. I’m no economist, but even one of the best, John Mauldin, says economics IS NOT A SCIENCE, and is at best an educated guess - that is often wrong.
Read: This Time it is Different. Because in many ways, it is not.
There is no real basis for the level of the equities market other than a false belief in recovery that is non-existent and built on false hope from infinite QEasing - proven by the fact when the slightest hint of that QE easing coming to an end causes the market to gasp.
False hope.
And the deflationary pressures are so strong (metals, commodities, natural gas) that inflation may never show up and the highly feared D may occur when it is realized that the economy is indeed still bust.
Watch the markets collapse then.
The soaring equities market is the effects of inflation. That is where a lot of the excess money is going. When that collapses other prices should rise accordingly.
Econimics most certainly IS a science, the problem is people thinking that science has all the answers and is always right. It’s not. Far from it. Far FAR from it.