Smarty_Pants

Economic Indicators Signal a Major Collapse Ahead

"A vicious deflationary cycle is about to ensue"

This point is debatable. If the overextended MBS loans were auctioned off for pennies on the dollar perhaps. If the FED buys them for enough to keep banks solvent it will simply replace an illiquid asset with cash and the money supply will not shrink. Instead of being tied up in a worthless asset, the money will be freed up for spending and tend toward inflationary pressures.

Also: "Full of doubts, U.S. shoppers cut spending". Doubt would be the wrong motivating factor. Try 'overloaded with debt'. You can't spend what you don't have, especially if you're trying to pay off what you've already spent and still owe.

Author's conclusion is correct however. Things are going to be rather ugly going forward regardless of what central banks and governments around the globe try to deal with the situation.