An Economic Disconnect

The stock market is up three days in a row! This despite the fact that inflation is rearing its ugly head. The dollar is on life support. Each new quarter brings more huge write-offs in the financial sector. House prices are swooning and the U.S. auto industry is on the ropes, etc. etc. So why is the market going up? Could it be that inflation might be good for us (for a change)? The U.S. consumer has been on a spending binge and our savings rate is microscopic. Inflation would devalue the dollar and push up interest rates (eventually). This would make paying back debts (both national and personal) easier and encourage savings growth. And a cheaper dollar boosts exports and constrains imports. So perhaps the medicine (for now) is more inflation?