Deflation IS the dominant mode... for now... in the developed world. Inflation has been and still is a real issue in China.
It isn't that hard to parse. The implosion of the debt financed housing bubble, and the destruction of value in the stock markets paired with it... created a sucking chest wound into which they've been pouring dollars, trying to replace lost capital, and keep the banking system intact.
A big issue still with the excess in leverage... and the impact of it in reverse at 100:1 when prices collapse... amplified through the system by the derivitization, re-amplified by the failure of trust.
The real elimination of capital, paired with the elimination of capital market function, has topped the ability of the market to finance anything... so that even with zero interest rates, you don't see anyone able to borrow. The low rates only real function is to widen the spread and give the banks a cushion... so... the low rates aren't real in terms of impact on the economy. Until they DO figure out they need to create new paths for the $$$ being generated from "quantitative easing" to reach the market, the entire economy will remain held hostage to the large banks large errors.
Assuming they won't figure that out... or act on it if they do, given their commitment to sustaining the economic hedgemony of the failed banks: The thing to watch here is housing. Has the housing bubble fully unwound yet ? No ? Is the pace in bank failures declining, or is it still increasing ? We're not out of the woods on real estate or the derivative impacts of the frauds that enabled the bubble, yet... even if the markets have chosen to pretend that problem was "solved" last year... that it is last years news.
They'll continue to pour $$$ into the rat hole left by the collapse of the bubble... trying to re-inflate to create a point at which we attain stability... but, we're not there yet.
The forward looking inflation risks depend on FUTURE problems that exist as a result of the difficulty in the effort being made at getting out of this mess without actually fixing the problems... and that is what they are trying to do... still.
The problems include the difference in economic impact between the debt used to fund long term housing purchases, and the impact of dollars dumped in to fill the holes left in capital, and into "stimulus"... There isn't any real "balance" to be had given the functions of the $$$ is different... so, the "re-inflation" target is wholly amorphous... while the deflationary pressures haven't abated in the least, even if they've been "counterbalanced" more or less effectively up until now.
Things are still wholly uncertain... but, things are becoming a bit more certain just now...
So, the other thing to watch is what DOES happen as the long term imbalances in out accounts with China are addressed... noting short term and long term impacts are different...
Inflation and deflation risks really aren't linearly connected, as most expect... so that you can only have one or the other...
I expect the inflationary scenario isn't irrational... but, I also don't think it is going to happen now, or next month... given where we are in the unwinding of housing, and where we are in the bottoming out of the massively displaced currency valuations vis a vis China...
See what Peter Schiff has to say about that this week ?
I'm thinking gold is near an interim peak...
Silver isn't likely to decline with gold as most expect...
Too funny, isn't it, that the rag is always that silver under-performs because it is an industrial metal... but, it is also expected to under-perform now because it is a precious metal ???
I think we're closer to beginning real economic recovery... even if the risks aren't wrung out, yet...
Silver is likely to remain nearer to supply deficit as that occurs... and any real acceleration will see supply evaporate.
News 
Market Data 
Discover 
AI
