Interesting discussion. I agree, inflation certainly is not a problem either now or will it be in the immediate future. That dubious distinction belongs to deflation, which will be around for quite some time as the global asset bubble is unwound. Meanwhile, the mass liquidation of assets assures us of a strong dollar.

The government is printing money like there's no tomorrow (and there may not be). The worldwide demand for these dollars permits the Fed to loan them for 3%. One day, these chickens also must come home to roost. Mr. Kunstler envisions one plausible scenario.

A fascinating, far-looking piece. The Phoenix rises from ashes. The reason for this, I suppose, is because the Phoenix is unable to reinvent itself. The American Eagle has the same distaste for self-immolation and pain. So, like zombies, we play out the hand we've been dealt.