My only quarrel with those who are convinced we really will fall into deflation is that in real life things tend to play out in funny ways and the attempts to prevent this from happening (expect massive public works projects if the democrats sweep back into power on the jobs issue) can result in hyper-inflation.Trouble with the inflation/ deflation debate is that everyone has their own definition of those words. People use "deflation" to express such potentially different concepts as deflation in a monetory sense, wage deflation, deflation in consumer and producer prices, and deflation in prices of financial or real estate assets. Further, Greenspan's reflation strategy debases the $ which happens to be our common frame of reference to express any of the above. The result is everyone ends up confused as no-one knows what anyone else is really talking about...Ok, here's my attempt at forecasting:Stocks, wages, and financial assets are going to deflate in terms of precious metals, and commodity prices. So, in the (possible) case the reflation of the money supply "works", we may get new nominal highs in the stock market, and wages may rise. However, gold, silver, and commodities would rise much faster, still leading to a lowering of living standards - a modified K-Winter of sorts. Not sure it would be sustainable (don't we need "creative" and "debt" destruction??), but thanks to the Fed's appetite for exciting global experiments we are likely to find out...SB
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