The bubble of optimism from the top (US economy saved from 'catastrophe') will soon pop.
Employment numbers may support such 'saved the day' claim but even if businesses are now hiring it is likely to be just about everywhere you don't want to work.
A bigger contraction is on its way which will make it difficult, if not impossible, for continued optimism and programs, such as an overhaul of health care, will not see the light of day.
Although the headlines appear rosier in America they are a bit different for Japan and England. Japan's eternal downturn is now entering a deflation period, according to the Bank of Japan.
Plus Mervyn King, the Bank of England Governor, also warns 'deflation remains a very clear and present risk'. Yes, indeed. But will the continued quantitative easing to fend off deflation work? We don't think it will.
The big global deflation turn is nigh and when it arrives there will be a loud pop.
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