Not necessarily.
There's a real possibility of DEFLATION, as the consumer debt-service requirements begin to conflict with energy costs and the (demonstrated) gradual decline of average US private-industry weekly earnings.
So, for example, housing could see a price decline--which would have very significant effects on the banking system.
Since FannieMae and FreddieMac are already a bit precariously-balanced, it might not be fun to watch.
>So, for example, housing could see a price decline--which
>would have very significant effects on the banking system.
Housing is almost guaranteed to see a price decline as a result of the factors you state and what I see as higher interest rates down the road.
However, regardless of what consumer debt levels rise to, people cannot live without a certain baseline of products. As any visit to a local Wal-mart will tell you, more and more of these products are imported from overseas. And therefore the natural result of a weaker dollar is inflation...
...however, note that all inflation isn't caught by the CPI. For instance, when you go to the supermarket in 1980 and buy a 128 ounce bottle of detergent for $5.99 and go to the supermarket in 1990 and buy a 65 ounch bottle of the same detergent for $5.99, you have 100% inflation.
However, the CPI sees this as 0% inflation.