Place yer bets Im leaning towards deflation will continue in 09 from a consumer perspective as the FED continues inflation from an Austrian view. Overall Prices of the majority of assets will continue downward. So I Suppose the media will say there is deflation. http://en.wikipedia.org/wiki/Deflation http://en.wikipedia.org/wiki/Disinflation http://en.wikipedia.org/wiki/Inflation http://en.wikipedia.org/wiki/Hyperinflation
Honestly, I think we have inflation so bottled up right now. The money supply is growing and nobody is slowing that. If the credit freeze suddenly is not a problem then the cork is out of the inflation bottle, Obama is in charge and look out.
all you need to do is look at this list. the USA is in some fine company and we're likely to move up the list next year with a trillion+ dollar hole in the ground. and likely a trillion+ dollar hole in 2010 with 5 year ARM resets beginning then starting with the boom from 2005 it should be worth the price of admission http://en.wikipedia.org/wiki/List_of_countries_by_public_debt
IMHO I think inflation will likely to develop out at some stage as the massive USD been printed out to bail out failed enterprises and many propose government spending projects. Also keep in mind that the growth in many emerging market will probably still grow amid lower pace!! The main inflation drive likely to be artificial low rate and credit creation at Central bank level..