Inflation-Deflation Spread Hits 9% As Schrodinger's Cat Goes Nuts

The debate over inflation and deflation has just hit a spread of almost 10%, with deflation (10 Year Yields) barely budging from near record lows, while inflation (stocks) are at a level last seen when the 10 Year was at 3.25%. In other words, one is right and one is wrong, with the convergence between the two now at almost record levels of around 9%. At this point the markets can continue diverging as 10 Year yields drop even as stocks do their irrelevant thing, or, at some point, the correlation desks can get their act together and realize that this spread makes no sense and unlike a Schrodinger Thought Experiment, you can't live in a world in which assets predict both inflation and deflation at the same time. Perhaps all it takes is for some person with a dose of common sense to "observe" this discrepancy and collapse the wave function of the insanity that our market has become. The snap back will be violent.

Long term:

Intraday:

Comments

[Sigmund]

A basic tenet of the scientific method is the theory that has the strongest evidence and takes the least evidence to explain is the one that is probably true.  Seems to me that  the deflation theory beats the inflation theory hands down based on this line of reasoning.  I think Ben knows what is going on and is really just trying to keep things afloat long enough for his masters to get their "debt" wealth  converted into cash and cash equivalents.  Once accomplished the stock market  likely collapses for real.  Until this day of reckoning a little mis-direction will prevent the masses from ruining the "deflation plan."  Hyper-inflation benefits no one, especially those holding cash at near zero interest.   

[Stevm30]

Schrodinger's cat - nicely done.