The market continues to chase inflation ghosts, even where none exist. We saw a mania of inflation concern last summer only to see that collapse along with the global economy. We saw another in December when the Fed first announced the move toward QE. We are now seeing yet another as the Fed moves aggressively to implement its strategy.

Gold is near $950 and oil is over $52 as the market chases its version of the Loch Ness monster. Japan experimented with Quantitative ease early this decade and still is flirting with deflation…So I guess inflation could happen, but it just seems unlikely to me, as long as the economy remains unwilling to take up all the credit being extended. Thre is a phrase for that eventuality: It’s called “pushing on a string”.