Just as I don't understand the thinking of the average American, I don't understand what's happening economically. I've been reading dire predictions for almost 5 years about how Obama is going to wreck the economy. Hyper inflation, mass panic, crashing market, plague, locusts, dogs and cats living together!
While it's not going well, it's not crashing as predicted. 
The establishment has many, many arrows in its quiver to keep things propped up. The Soviet Union had a far more controlled economy than ours, and it was able to keep it going for 70 years. Nonetheless, what we have is not a free market by any means, and it will succumb to greater and greater central control until it inevitably collapses. But I do not believe that time is at hand, or near at hand.
As for inflation, there has been plenty of de facto inflation as Americans have seen their paychecks go down or stagnate as staples such as energy and food increase. There may be no wage inflation, but the purchasing power of consumers is decreasing just as if there were inflation. This is the end result of central planning policies that prop up corporations, banks and pension funds at the expense of upward mobility for the average person.
My own thinking is that I would never bet against the establishment. That's like betting against the Union in the Civil War. But you shouldn't put all your eggs in that basket, either. My investments run the entire gamut: from precious metals, to real estate, to stocks and bonds, to art and antiques. As events unfold, I tweak things here and there but I always remain invested in everything. Recently, precious metals have been down, so I've been buying coins. I also bought quite a bit of real estate in the past few years and improved some of the real estate I own. My pension is in stocks, and that has improved quite a bit since the 2008 bust.
All of this is the result of an increasing money supply which has continued unabated since 2008. So long as there is no wage inflation, and so far it looks like there won't be, the expansion will likely continue. But I don't delude myself into thinking that what we have resembles anything close to a free market. What the government giveth the government can always take away, and I assume at some point the other shoe will drop. It's just a matter of time before the Fed will have to tighten money, and when that happens, all markets go down.
