"The country (U.S. and almost everywhere else) has increased the money supply so the value of its currency will go down. Inflation/deflation is meant to speak of what happens to the money supply; not price."

If every country in the world increases the money supply by the same percentage you will not see any decrease in the value of the currency.

True you will not see any relative difference if they all decrease equally on a measure such as the $USD or the $EUR; BUT since they are all in fact worth less per unit, as prices sort out, it will take more units in all the currencies to purchase the same amount of goods and services than previously. Further the purchasing power value of the accumulated wealth throughout the world will be confiscated to the rate of inflation present throughout the system. So when everyone devalues competitively for export preservation it puts a tremendous burden on the people and this is why the growing/developing world is screaming at the U.S. (which has the "reserve currency") to cease and desist. Other people aren't quite as numb as the developed world to financial matters and they are angry with their governments; hence the governments want the western world to stop. The western world cannot stop or they crash. Yes all countries will soon fear paper currency. This is exactly why gold MUST go up.

"Where everybody gets it wrong is when they try to factor in the amount of debt in a system. Debt has nothing to do with inflation or deflation unless one is using the modern and totally incorrect definition of those terms"

What do you call debt? The US government ratio debt/GDP is very important and has a direct effect on "inflation/deflation".

Debt, whether public or private, is spending without the immediate ability to repay. Debt satisfies a current desire by creating a future obligation. I put a lot of things on my credit card but that's not debt. I have the money to pay for the items and pay off the card each month, that's convenience. Every time there is "loose money" everyone assumes that is the new norm. People buy things they can't afford assuming the money will keep coming in, politicians start new programs assuming the tax revenues will continue. It feels as though everyone has more money but they don't in reality. The bill has not been paid. There is a future obligation that must be paid off (with interest) with a great deal of hard work and/or an extended period of reduced purchasing. Either remedy is painful because the person comes from an unsustainable high to crashing below the previous norm. This situation exists independent of whether or not the currency is being inflated. Therefore the debt/GDP has no effect on inflation or deflation.

During times when the debt to GDP is climbing monetary policy is loose and people are feeling prosperous; but it is an unsustainable illusion. Debt to GDP as it goes up requires more and more effort and resources to restore the situation becuase the future obligation must be paid and paid with interest. Debt to GDP can rise to the point where all the revenue which can be collected only pays off the interest with nothing left to apply to the principal. In the situation involving most western nations the debt to GDP is high enough that a huge amount of hard work along with reduced purchasing is required to "right the ship." Politicians know they will never get elected by promising 20 - 30 years of hard work and deprivation, so the only real solution is not an option that will likely occur. In order for western nations to produce more than they consume they would have to get their manufacturing capability back and pay their workers world standard wages. Yes they would actually have to compete with worldwide wage standards. Good luck trying to sell that before the elections. A hamburger flipper in this country makes more in one hour than a laborer makes in one day in many countries. Huge, huge adjustments that will not be made by choice are in order.

So debt to GDP doesn't figure into inflation or deflation at all unless one is working with the wrong definitions. It is a matter of adjusting the price and amount of goods and services to the current currency reality in a worldwide market. Additions of currency to the system adds some more "loose money" to an uncorrected condition which eases the current pain while assuring a longer and more painful eventual adjustment.

The western world has determined to just keep pushing ahead until the whole system blows apart. They will likely get debt concessions that will be far less painful than the real adjustment required to alleviate their financial indiscretions. But they will be subject to the new standard norm.

Once this becomes obvious to all, and usually the inhabitants of the land where this is occurring are the last to realize it, the currency would be dumped and chaos would occur over a large section of the globe. Large enough to take the whole system down I suspect. I am sure TPTB are fully aware of this and furiously working behind the scenes to have a system in place that they can shift to when it becomes imperative.

My one and only defintion for inflation remains what it has been for hundreds of years...an increase in the supply of money; and by money I mean the currency of the nation. In my case U.S. dollars. By the definition the U.S. has experienced monetary inflation and not deflation. Tough as it is now, when the prices get properly adjusted (an ongoing situstion that never actually happens but is always somewhat lagging reality) there are going to be several countries that will probably have to be saved from riot and revolution as the inhabitants.... have a something for nothing mentality, have never experienced a truly hard day in their lives, are armed to the teeth, and will feel fully justified in taking whatever they want from whomever they want.

P.