English, I think the key moment comes when the FED/Treasury debt can in fact no longer be rolled over at existing rates. When we have to compensate skeptical foreign bond holders to roll the debt over at higher rates. Of course this becomes contractionary and I believe leads to deflation.

What we have witnessed since 2008 is a deleveraging of the private sector being countered by the public sector increasing its debt. This is the tug of war. I recommend reading Steve Keens papers on all of this. Start with the paper "The Credit Tsunami" Here is his sight: http://www.debtdeflation.com/blogs/

Since the Name Prechter clearly elicits emotional responses forget about him. I actually think Steve Keen explains it in the most simple fashion. It is really about Debt to GDP ratios.

We have expanded it since the begining of the cycle in the mid 30's. We are now on the back side of that expansion. That is what deleveraging is all about...and we are there.

The impact will be deflation. Of course Keen does a great job explaining it, he gave me a good education.

Plunger