Anyone who believes we are heading toward INFLATION is wrong...it won't happen. At least not for a few years anyway.
We have actually just returned to deflation after the effects of QE1 & QE2 are wearing off. As long as our gov't doesn't artificially inflate our economy with a stimulus, we'll remain in deflationary times.
Until consumers deleverage their debt, they will continue not to spend. And as long as demand doesn't increase significantly (which it won't), we'll remain in deflation. Private sector demand for credit remains at historic lows and demand for credit is another indicator of deflationary times.
Let us all be reminded that the single biggest reason Bernanke imposed QE1/QE2 was to keep DEFLATION from ocurring.
The following are deflationary indicators:
-Falling Credit Marked-to-Market
-Falling Treasury Yields
-Falling Home Prices
-Rising Corporate Bond Yields
-Falling Commodity Prices
-Falling Consumer Prices
-Falling Stock Market
-Spiking Base Money Supply
-Banks Hoarding Cash
-Rising Savings Rate
-Purchasing Power of Gold Rises
-Rising Number of Bank Failures”