This sudden shift in the markets' thinking reflects a feeling that the fourth quarter represented the worst of the recession, and that things have begun to moderate since then.

While "the market" is probably wrong on the timing of the recovery, this piece does highlight an important dynamic: if things are recovering, we definitely have an inflation problem. If things do not recovery, we have a depression problem. In other words, heads, we lose, tails, we lose (no one wins). Or put another way: the piper must be paid for 25-35 years of financial excesses.

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