Recalculate recovery equation: inflation/currency devaluation will kill recovery and Asian export markets.

The Federal Reserve is out touch with reality but they effect the markets so you would be foolish if you didn't factor that in when adjusting your portfolio. But an interesting aspect that has occurred with industrial output from some developed economies increasing, is the fact their exports have tanked; more notedly Asia. Now we have inflation, we all know it because we can see it creeping in from all every service cost you can think of. I know people that run/work in businesses, from financial companies to law firms to restaurants through to distributors and retail. They are all experiencing costs increases, there is no deflation. They have had to stay competitive with prices (marked down) as market share has shrunken (due to stagflation), but overheads have increased substantially. In turn prices have to rise, fees from administration, inventory costs and so on. This of course gets passed onto the client. This is happening now in a so called recession.

You can solely blame goverment intervention, central banks for creating inflationary environments. On a larger scale with Asian export markets dire a major issue will take place, that if the US recovers, it won't be a consumer based recovery as such. As mentioned costs and fees are increasing on a general scale so the consumer will try and put their cash away or save just to cover extra expenses from interest payments to goverment fees registration/insurance, food, fuel etc etc etc. This will hamper Asia's recovery significantly as the inflation will steal away growth prospects for export countries, especially consumer durable good exports (for the US and Europe). But on top of all that Asian countries may try and devalue their currencies (to boost exports) with each other as a currency based trade war will take place.

So the equation would be: US consumer's saves, income is taxed via inflationary pressures, consumption drops on Asian imports, US growth minimal = Asia exports remain negative. Asia then devalues currencies for export share, causes currency deflation, thus leading to hyperinflation.