Agree. Myself, I believe there could be deflationary pressures coming down the pike despite helicopter Ben’s frantic attempts to stem deflation.
Indeed, we would be experiencing crushing deflation now if not for the Benanke’s moves. If Bernanke did nothing, or raised interest rates, we would see the quickest way out of the problem (a relatively short but deep depression), but such actions are not politically possible in America. The domino effect around the world would not be worth the price either.
We must realize there is no way out of this situation without pain. The decision has been made to spread the pain out over time and keep the downturn as shallow as possible. There is not a right or wrong decision, just a preference.
My analysis (and I actually do analyze) indicates we will emerge from this interlude of stagnation around 2022. we will have fits and starts followed by dips until that time. The housing market should find decent footing around 2014. Job creation will be slow and agonizing for at least 5 years.
It’s not important to be right on economic matters, everyone is right eventually if they stick with a position. What matters is to be right at the right time. The hyperinflationistas have been wrong for a couple of years now, and I think they will continue to be wrong.
What’s worse is that the hyperinflationistas think gold will save them. If HI strikes they will go through their gold in a few weeks, those with large holdings may last a few months. There is only one defense against hyperinflation: Possession of arable land with water, and the means to defend it.