Modern financial markets are triggering cognitive dissonance among investors. On the one hand, we're seeing historical highs among stock indices. On the other hand, there are obvious signs of macroeconomic fatigue.
As I detailed recently, looking at the valuation of inflation (through the prism of the Big Mac Index), the real U.S. economy, measured in physical base goods, has actually been in a hidden recession for the last 20 years. The stock market, however, has managed to more than double over this time.
