Or IOW, the anticipation that inflationary boom may succeed has been driving up equities in true greater fool fashion.
That's because any price spike in commodities (eg oil) and food (eg oil/gas->fertilizer) will have another immediate effect at reducing consumption
The other effect it will have is helping to kill our chances at real recovery by strangling industry that needs those raw materials. A big part of today's recession is fallout from the commodity boom a year ago.
The US was built by self-reliant people and a significant portion of the population still share those characteristics.
I also share your optimism and always have. The creativity, innovation and entrepreneurialism don't go away just because the Fed is propping up insolvent banks with endless bailouts. Those won't go away with the reflationary bubble or the final collapse. OTOH, I have my money parked in speculative investments (e.g. buying tech in March and selling recently) and some inflation hedges (e.g. Canadian energy trusts). Those don't help the long term economic recovery. For that we need one simple thing: higher (i.e. market controlled) interest rates.
Higher interest rates won't increase consumer demand and won't reverse housing deflation.
Deflation is how the Market removes surplus capacity. Thus, there is no magic bullet such as changing interest rates that will solve the current deflationary depression.
Nor is there a pain-free solution.
The solution will occur, of course, but it will be painful. Prices will drop until enough capacity is removed from the industrial, transportation, service, housing, office, and retail industries.
If you want an easy Gedanken mental thought experiment to illustrate the above, simply imagine yourself walking in to a bank to ask for a commercial loan for a building based upon future rental rates to your tenant increasing.
After you've had a good chuckle realizing that no banker would make such a loan any longer, you'll catch on to the stagnant or falling price zeitgeist that is making its way through the entire planet's economy.
That's deflation...the one thing that a fiat currency and central banks were supposed to be able to solve...turns out to be more difficult to do in practice than in theory.