I agree that deflation is the natural direction that the economy and the markets want to go in but the Cb's will not let it happen. They want to get the commodities under control and the insiders will use the deflationary scare to acquire more of them for themselves.

Ultimately they will not allow deflation. That does not mean that inflation will occur equally in all things. The things you need will be the items that inflate the most as the discretionary items fall.

From the Cb's perspective they believe they can always stop inflation but once deflation gets ingrained it can't be stopped.

So ultimately we agree on most points. The question is how bad they allow it to get before they intervene. They can not allow any major bank to blow up because of the derivatives exposure which was the main reason for the currency swap announcement. They are also not very transparent so who knows how much intervention is currently going on.

On hyperinflation - It is a loss of confidence in the currency causing an increase in money velocity as people try to trade their paper money for tangible assets. Nobody can predict exactly when that will occur but it is usually preceded by an increase in inflation (Cost push) that can run for a few years. The Cb's know this and will try to walk a fine line.