Depending on which expert is talking, the world is either falling into a deflationary abyss or launching an inflationary moonshot. What's truly weird and fascinating is that they're both right. The mountain of debt taken on in the past few decades exerts a profoundly deflationary pull on the economies of Europe and Japan, and to a lesser extent the US. At the same time the torrent of currency flowing out of the world's central banks is swelling the accounts of the super-rich who are converting it into real assets as fast as they can, causing near-hyperinflation in some favored markets. Hence the spectacle of Paul Krugman (and most Fed governors) complaining about low inflation and warning of a deflationary death spiral, while things like this are happening:

Christie's Contemporary Art Sale Nets $852.9 M., All-Time Auction Record

This evening Christie's brought in the highest-ever total for an auction, at their contemporary sale in New York, grossing $852.9 million across 75 lots. That figure beat the sale's formidable estimate of $630 million to $836 million, and more than doubled the $343.7 million that its rival, Sotheby's, brought in at its contemporary art auction last night. The previous record for an auction was $745 million, which was set back in May at Christie's contemporary art auction in the same room.

The sale saw new artist records for 11 artists, among them Cy Twombly, Ed Ruscha, Peter Doig, Martin Kippenberger, Sturtevant, and Seth Price. Seventy-five of the eighty lots on offer found buyers, for an impressive sell-through rate by lot of 94 percent.

Andy Warhol's Triple Elvis [Ferus Type] (1960) and Four Marlons (1966) sold early as lots 9 and 10, going for $81.9 million and $69.6 million, respectively. By the time the second figure was reached, the crowd--whether reeling from the action or no longer capable of being surprised or just no longer impressed by anything under $80 million--forgot to clap.

To say it was a hot room would be to put things mildly.

This is not a story from a deflationary world. Nor is the parabolic arc of trophy real estate prices:

Primrose Hill penthouse breaks record for most expensive property in area

A penthouse flat in a Primrose Hill development has broken the area's record for the highest price based on surface area. The new build apartment has an asking price of more than £4,400 per square foot, around four times the average for the location.

The property is in the St Edmund's Terrace development, a luxury complex by developer CIT featuring 36 flats and a separate two bedroom townhouse, all overlooking Primrose Hill.

With a surface area of 3,600 square foot, the asking price for the penthouse apartment is in the region of £15,840,000, while prices in the block start at £3.8 million for a two-bedroom flat.

The most expensive London home by surface area - a penthouse overlooking Buckingham Palace - is reported to have sold off plan this year for significantly more than the previous record of £5,000 per square foot.

To sum up, this place costs (at the current USD/Pound Sterling exchange rate) $6,900 per square foot, or $25 million for a 3,600 square foot penthouse. And it's not even the highest-priced place in town.

There are dozens of similar examples from around the world of rich people tossing ridiculous sums at shiny baubles. But the process is not random: Each case involves presumably well-informed investors swapping financial assets like cash, stocks or bonds for real assets that exist in limited quantity and can't be replicated by desperate governments.

So throw out those economic theories that require inflation OR deflation. Apparently we've entered a time in which both can exist -- and rage -- simultaneously. And until this case of financial schizophrenia is resolved, wealth will continue to flow from deflationary sectors -- savers who earn negative real rates on their cash, workers who see their wages squeezed below the poverty line while their employers report record profits, local governments with shrinking taxe bases that force them to close libraries and fire teachers -- to the owners of real assets who see their wealth march ever higher and who have little else to do but buy more toys.

Sounds a little like the days before the French Revolution.