Joe, I love you man, but you cannot have inflation and deflation at the same time. It's a semantical argument. Over time, as those who would seek to confuse us about such matters have succeeded to great extent, definitions have become fuzzy. It is not unlike what happened in Orwell's Animal Farm, remember... "All animals are equal, but some animals are more equal than others."

As far as inflation and deflation go...either one or the other is happening. You can have price increases, a result of inflation, and price decreases, a result of deflation, at the same time, but if they are happening at the same time, the cause of one (being money supply related) is not the cause of the other.

What complicates the entire issue is that prices can rise and fall for a variety of reasons, and money supply is only one of them. However, when money supply increases exponentially, inflation HAS ALWAYS, in every case in history, been the result.

If my assessments of human nautre are correct, Bernanke and whoever comes after him will inflate until they destroy the currency. They will never surrender, even if it bankrupts the entire nation and world. Ultimately there will be deflation after the dollar ceases to function and there is no money left. This will be real deflation where gold and silver corn and maybe seashells return as money for at least a time or half a time and bonds become worthless. A few shares of Kimber might pay off your mortgage in this situation, fortunately. Bull