I'd be much more comfortable with inflation than deflation, because there is another factor involved in the equation, and that is the velocity of money.

Money supply by itself does not cause inflation or deflation, but only in conjunction with economic activity. If the economy stalls, deflation. If it cruises, inflation. (At least given a constant money supply). The Fed thinks it can control inflation, but a dead economy is difficult to revive, so money is being printed at a great rate. But this is not enough, if it is not being used in the short term for economic activity it is wasted. The Fed needs to throw money into the economy to kick start it. We especially need jobs, to create demand, but the US has been diverted by other issues - is slow to address the jobs issue.

Either way, though, inflation or deflation, gold is a safe haven for a while at least. But give me inflation every time! Cheers! Isaiah