There’s inflation, exhibit A is the stock market. Sam Zell says the stock market “feels like the housing market in 2006.”

Stocks keep going up no matter what. Every day practically we hit new highs. The Fed keeps dumping money into the financial system. The Bank of Japan is printing on a massive scale too. Housing prices and rents are up significantly in New York and in Washington DC, the 2 cities closest to the printing of new money.

Bernanke wants this to happen. He is desperate for “inflation.” One of the problems with inflation (more accurately a rise in prices) is that it’s like fire. It is unpredictable and can spread quickly into a parts of the economy no one expects.

The Fed has told the world that we will have ultra-cheap money through the middle of the decade. Where is this money going to go? Right now it’s stocks.

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