[mlocher]

Temporary drops in prices are unlikely to have that effect. But Mr Brigden thinks the combination of falls in commodity and house prices with weak demand means that US headline inflation is likely to go negative next spring and stay that way for months, dropping as low as minus 3 per cent. “When deflation goes on for the best part of a year, expectations are more likely to become entrenched,” he says.

We definitely are seeing deflation right now. How long it will continue is the $64,000 question.

Our deficit is becoming a drag and if Obama gets what he wants in terms of fiscal policy, will be a much bigger drag. At some time, perhaps within the year, our bond ratings could be cut and that will have a significant impact on the US. The solutions will be more taxes, stop spending, default or devalue the dollar.

Stopping US gov't spending aint gonna happen!

If the dollar is devalued, inflation is certain to set in.

[TigerLikesRooster]

That is why we cannot rule out high inflation as a possible future, because unlike Great Depresison of 30’s, U.S. has additional risk of sovereign default.

[EEDUDE]

“How long it will continue is the $64,000 question.”

Don’t you mean the $64.00 question?

[moose2004]

Maybe Obama will start a new war, WWII was the only thing that got us out of the Great Depression.