Farewell to all the Emperors

Let’s see. Markets (stocks and commodities) rally from horrible lows of March 2009. Most economists switch the party line from “end of the world” to “recovery.” By year-end smugness has returned. There was even a consensus that interest rates will have to move higher. Almost nobody accepts our view that the rally represented a flight out of money. Rather it is/was seen as a harbinger of economic recovery. And now, moving into February 2010, the music has changed.