More important, he says, is that the whole world is heading for a deflationary environment stemming from a robust period of investment in the 1990s.
In a deflationary environment, unemployment is a coincident indicator, not a lagging one.
Over the past 4 years inflation has averaged well below 2%, even turning deflationary for a few quarters.
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Therefore, a long Japan-like deflationary stagnation is a more likely scenario than a 1970s-style stagflation.
Some very smart forecasters, such as Gary Shilling and John Mauldin here, think a long-Japanese-like deflationary stagnation is a more likely scenario than a 1970s style stagflation.
This is a deflationary event which is hurting the precious metal trade and keeping a lid on oil prices.
Even sound Germany has a slightly deflationary monetary policy because it lacks a reliable compass.
The third story is a deflationary one, and says that the economic recovery is something of a Potemkin village, kept intact only by dint of central-bank and fiscal stimulus.
It believes there are not yet clear signals of a deflationary mindset in corporations or the public at large, and that a recovery in private demand will eventually pull the economy out of its slump.
Bernanke believes a deflationary recession must be avoided at all costs and that prosperity can be found in a printing press.
There is only the prospect of Americans suffering through either a deflationary depression or hyperinflation.
Brazil's crisis shows a deflationary feedback loop that began with Thailand is still operating.
It is not clear whether deleveraging will cause more inflation or a deflationary depression.
Flynn cited worries in the market about possible deflationary forces taking a toll on commodities in general.
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So, if the private banks are a no show, a deflationary bust will be in the making.
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Simply said, if the Federal Reserve ceases their money printing ways, it will be a deflationary one.
Since real rates will rise in a deflationary environment, Credit Suisse also likes companies with little debt.
Building a unique global network of optical fiber, they learned the perils of debt in a deflationary market.
"The austerity that Germany wants to impose will push Europe into a deflationary debt spiral, " Mr. Soros warned.
That was the time when Enron and WorldCom were collapsing and investors were worried about a deflationary recession.
In theory businesses and workers should quickly adjust to a deflationary shock, by slashing their prices and wages.
Indeed, unless an inflationary boom is fed with more and more inflationary credit a deflationary bust we will quickly get.
FORBES: Monetary Watch June 2011, Inflation prospects post QE II
While fractional interest rates give the appearance of ease, the Bank of Japan is still operating in a deflationary mode.
Japan continues to be in a deflationary cycle, and Latin America is experiencing higher than desired inflation and tightening credit conditions.
Prices and incomes go down together and once that pattern becomes anticipated, deflationary psychology causes a destructive downward spiral of spending.
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The good news for proactive health systems is that one can thrive in a deflationary period if they shed old assumptions.
Caught in a deflationary trap, Argentines are rapidly becoming disillusioned with their president and his embattled economy minister, Jose Luis Machinea.
ECONOMIST: Another president caught in Argentina’s economic trap | The
Since stocks typically underperform in a deflationary environment, which leaves little room for margin expansion, Credit Suisse recommends cash and short-dated bonds.
But companies are up to their neck in debts, and will be under huge pressure to cut costs in a deflationary environment.
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Some even worry that the economy might fall into a deflationary trap.
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