Inflation, deflation... the truth is that in my personal life I haven't seen much of either. The cost of gasoline was up substantially. Now it's down (finally) again. The cost of some cutting edge consumer electronics fas come down (but then, I guess plasma HDTV's are no longer cutting edge), and the cost of groceries has gone up a little (but not enough to scream Inflation!") Housing prices haven't really come down here. About all that has happened is the market has cooled.

I'm Canadian. I guess that changes my outlook a bit. But for all this talk about deflation and inflation, I have seen neither over the last year. Your best bet would have actually been to assume that neither would happen.

Sometimes I wonder if pumping all these trillions of dollars into the system won't just support the previously untenable status quo of credit. By this I mean that everyone was already running around levered up 50:1 on dollars that didn't exist. Now the dollars do exist, so they can run around doig the same with less leverage. NOT spending more profligately. NOT spending less. Just actually doing what they already were but couldn't continue to do because the money really didn't exist.

I'm no economist, but the thought has occurred to me that we may have neither hyperinflation nor hyperdeflation. Just status quo. Where would that leave us?

MR