How are equity markets signaling economic strength while bond markets trade at the tightest levels ever?  Why do gold prices soar while inflation remains "stubbornly" low?  The answer, of course, lies in the Central Banking grand experiment that has distorted almost every corner of global markets.  Per the WSJ:

What exactly is the market trying to say about the state of the global economy? Do the recent record highs in U.S. stock markets signal growing confidence in the recovery, or do soaring government borrowing prices and flattening yield curves as borrowing costs tumble at even long maturities signal market fears that the global recovery is a distant dream?

How does one reconcile this year's 30% rise in the price of gold—usually considered a hedge against inflation—with long-term swap rates suggesting inflation will remain low
for years? And how does one explain the strength of European markets as many banking shares are trading at more distressed levels than at the height of the global financial crisis?

One answer to these disparities is that the markets have become so distorted by central bank activity that they are no longer transmitting very useful information about the economy at all.