I still think devaluation will be the tool used to light the inflationary fires, which is the only way to make the system solvent again (on paper at least, we'll still be living in hollowed out shell economies with major demographic, energy supply and other structural problems).

In economies that import most of what consumers buy, like the US and the UK, devaluation directly raises retail prices. Then the unions start clammering for higher pay, and those who work for the Government will get it. Everyone starts complaining about the cost of living and the public starts to get a inflationary mindset. They'll fiddle the CPI figures but people will know what's happening and the flight out of cash and bonds will begin.

It has already begun in the UK. Sterling has collapsed and it looks to me like we're heading to parity with the Euro. This has to feed through the system eventually although right now all retailers aare discounting everything to get people through the doors before Christmas. They'll have to start re-building their margins in the New Year else they'll all be bust rather than just most of them.