We exited the inflation highway a couple of exits ago. Money "printing" is NOT keeping up with credit destruction which results in net moeny supply decrease, which is deflation. It is very hard to see delfation right now becuase we have only just got off that road so recently, it was only a short time ago we had the spike in commodities. But commodities are now coming down, with everything else. Clearly deflationary. People think deflation is impossible, and the goverment would never choose it. It is not impossible. The government will deflate, refi at low rates, then inflate longer term.
I was on my annual pilgrimage to US last November and I mentioned to LA friends that given the slide in house prices and the rise in restaurant prices maybe they were entering stagflation. That did'nt go down well so I dropped the conversation, but the thought has never left me regards f9