Ending The Happy Hour

From Sudden Debt Blog - Ending The Happy Hour: "Regular readers know that I am a 'deflationist', i.e. I believe that the current Great Recession is already characterized by asset and credit deflation, which will likely deepen and widen further before the global economy rebounds.
Needless to say, this view is not shared by several academic analysts and gold-standard theorists - and most definitely not by commodity speculators who, however, are mostly talking their 'book'. Some even mention the possibility of hyper-inflation, a la Weimar Republic."

I've been waffling on this issue of  Inflation vs. Deflation for quite some time.
My first reaction was that with all the money being printed it would certainly cause hyper-inflation. No one has said this but you could consider the housing bubble as an example of hyper-inflation. It's global and has effected the economies of Europe, Asia, and of course the good old USA.
On the other hand, a lot of the financial arguments made for deflation are logical and well put together. The trouble with that theory is that it's biggest fans are Bernanke and the gaggle of dolts we call our elected officials.
The one thing that bothers me about both positions, Inflation and Deflation, is that it is based on a model that doesn't apply today. During the Great Depression all of the monetary systems were based on Gold, while today they are based on "fiat" currency. I find myself agreeing more and more with a fellow blogger who aptly observed "I fear that Mr. Bernanke, a Great Depression theorist, is a general trying to fight today's war with yesterday's tactics and weapons. It reminds me of the French wasting enormous resources to build the Maginot Line before WWII, only to see it immediately by-passed by Guderian's blitzkrieg panzers in 1940. I hope Bernanke and friends are not as  short-sighted."

Note to myself: Get off of this economic theme, too much gloom and doom.