I've wrestled with this problem for a while and admit I can't figure it out. Having said that, if the U.S. government and other governments around the world create one trillion dollars and throw it at the banks, one would think that was inflationary. But if the banks don't lend the money out and use it instead to shore up their own bottom lines, then how is it inflationary? And if you have a hundred trillion dolars worth of derivatives (et al) collapsing beside the one trillion dollars the government has created then is that not still deflationary (by a long margin)? I tihnk deflation will win but there may be a short burst of inflation beforehand. Like I said I can't figure it out but I like to read all opinions. Anybody?