In spite of a few depressed sectors (housing, automobiles, banking --whatever) the U.S. is currently experiencing around 4% inflation based on the CPI. (For the real numbers see shadowstats.com --John Williams website).. We have recently, and briefly, experienced inflation approaching 8% and are around 4% at present. Real unemployment based on the old way of computing this figure is running a little over 20%. Considering that we are in the midst of a severe recession, I find this rather startling (not the unemployment figure, but the CPI!) Volcker says he is not worried about deflation, but is concerned that the Fed may be sowing the seeds for future inflation. I have to agree. Those folks buying gold @ $1300 must certainly agree!