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ECRI Future Inflation Indexes Indicate That Worldwide Inflation Is Receding

We are on the way to a world wide deflationary period. The commodity boom has ended. Despite massive liquidity infusions from the major central banks, the money supply is shrinking as the credit crunch continues. Great article, it clearly illustrates the change in direction. I believe all the central bank efforts to hyper inflate will eventually fail. Then, Bernanke’s theory that The Great Depression could have been avoided if only more money was thrown at the problem, will be proven wrong. Unfortunately, it appears that the need for credit is so great, and growing, that the central banks are falling behind. For now the problems are primarily contained within banking and corporate borrowing arenas. When city, county and state governments start defaulting for lack of financing, probably sometime in 2009, we will likely face a choice between either “the mother of all bailouts”, or something much more sinister.