Risky versus Non-Risky assets

So far one of the most dynamic themes in world financial markets has been risky v. non-risky assets.

I've taken a chart of FXY, TLT, EEM, FXA, SPY, and BRZ.

FXY is the Japanese Yen currency etf.
TLT is the US long term government bond index.
FXA is the Australian Dollar currency etf.
BRZ is the Brazillian dollar currency etf.
SPY is the S&P 500 equity etf
EEM is the emerging markets equity index.

One year chart of Risky and non-Risky assets.

Here, we see an obvious inverse correlation of the risky and on-risky assets. The yen is considered non-risk asset because it is one of the countries who's currency was used to fund the risky asset purchases. Government bonds have also been more nevegatively correlated to the riskier assets, going up when the other is going down and vice versa.

So, here we have a problem. The way these items trade, a lot of economists somehow contradict themselves. For instance, some of them say the long bond yield will go up due to all the money in the system, yet the economy will be growing below trend and the stock market will be lousy for a while.

So by this account, US government bond prices will continue to fall but due to the inverse correlation that is prevalent, the risky asset prices will go up, all this with a sub-par economy. Shouldn't stock prices be pathetic with a sub-par economy? But they just might go up if the correlation holds. So who is right? the economists or the inverse correlation relationship between the assets?

Also, inflation is to be subdued because the price of housing will come under pressure and rent will decrease, regardless of a possible commodity price increase because the rent portion in inflation numbers is quite heavily weighted. Also, world demand has been incredibly anemic and will continue to do so for the immediate future, that doesn't bode well for commodity prices. Demand destruction has a huge impact on the price due to the high elasticity of commodities.

The stimulus plan and monetary easing will take time to work. The multiplier effect also will take time to course through the economy. In addition, the banks aren't lending a lot of their capital out because they are saddled with bad assets. Also, commercial real estate is just beginning to get hit hard by the recession. All this leads me to believe that US government bonds will still do well even if the recession ends soon. The anemic growth will still put us in a period of government bonds doing better than risky assets.

Economists seem to be talking in much quicker time frames as if they will happen all at once. The correlation will stand and thus the risky assets will start going down again. Later on, maybe 1-2 years down the road, government bond prices will start to erode and riskier assets will do well once again, but not for quite some time.

It's a quite a leap of faith for predicting so far ahead, but if things progress faster or the system gets cleaned out faster than I think (more likely the latter), I'll be the first to change my outlook.