No we're not. The only deflation we got is asset deflation and energy deflation. Consumer prices as a whole are still rising. OK, so nobody knows the future and you're saying it's bleak. Fine, but was there ever a time you've said it wasn't bleak?
Back in the early 80’s, I got stuck with a very high interest home loan. Of course the house I had bought was not at a hyperinflated cost. The interest, while high, was tax deductable. I also remember netting over 10% interest on some longterm zero coupon bonds I had bought. I was able to refi some years later to a much lower interest rate.
The big difference I see today, is the shear numbers of people who are unbelievably upside down on their homes. I see far too many homes that are probabaly not going to go back up value to equal their mortgages any time soon.
http://www.bls.gov/news.release/pdf/cpi.pdf
For the last year, overall prices increase .1 %, so by the CPI, you are correct, overall prices have not yet declined for a full year.
But that is the lowest increase since 1954, and the fall in prices has just begun.
Fine, but was there ever a time you've said it wasn't bleak?
Not recently.