The past 7 days have brought a solid ray of sunshine to the housing market. Not only did the January S&P/Case-Shiller Home Price Index rise for the eight straight month but SUPPRISE, SUPPRISE, SUPPRISE, February’s Pending Home Sales beat market expectations 8.2% (a decline of 0.2% was anticipated.

Steven A. Wood chief Economist at Insight Economics, LLC states:

RGE Monitor senior analyst Arun Motianey has recently joined investment guru Nouriel Roubini in saying we are headed for an inflationary world.

Motianey postures three scenarios: 1) inflation without indexation; 2) inflation with indexation and; 3) deflation.

“Deflation is a very serious risk [but] inflation is a greater likelihood.”

Motianey recently told Tech Ticker he thinks the central banks will probably choose to monetize public sector deficits.

SMALLER METROS LEAD RECOVERY

Steve Cochrane of Dismal Scientist has laid out the case that smaller metros are leading the recovery:

“The recovery is spreading to more regions, particularly favoring manufacturing hubs and commodities producers.”

“Nearly half the nation’s metropolitan areas are out of recession, though they account for just over a third of total output.”

Martin Hennecke, associate director at investment and financial advice firm Tyche says that investors should take a closer look at how much recovery has occurred in the United States and other Western countries.

He questions whether those countries are generating a real recovery. “We are not seeing any growth in the United States, let alone any sustainable growth…The U.S. economy has never really recovered. They have just been throwing money at the problems, been bailing out the banks,” he recently told CNBC.