Two types of inflation in my mind: 1) price to consumer and 2) price of ‘assets’

1) Inflation in gas prices, groceries are real things. Premium was $1.45 in CA in 2002 and is $3.30 at the same gas station today. May not feel like inflation b/c these items inflated before / during the RE bubble. $3.30 is cheap if you remember it being $4.50 beforehand. Do the same math with a gallon of milk. I remember 2.50 in the early 2000s and see 4.50 to 5.00 nowadays

2) Cash earning near 0% in bank accounts is fleeing to hard assets and equities. Can someone explain to me why most of the S&P is trading above 10 yr averages in midst of recession?

If you follow the ‘smart’ money, John Paulson is long into gold.

The bigger x-factor in inflation/deflation is the reduction in consumer credit from the banks.