I just ran into a very well written post on deflation by Robert Prechter over at Safehaven.
I like the post because it is exceptionally well organised. It enables me to read it and to consider deflationary history and then to consider what might be different today (didn't I just read somewhere, like a most recommended post today, that $3.8 trillion has been spent trying to keep the markets liquid?)
What don't I know? I don't know how big that injection is relative to the existing cash money supply as opposed to the money created through credit. That is a whopping 13k for every man, woman and child in the US and that is simply scary.
I looked a little more around the website and this guy explains inflation and deflation very well. Actually, the above post is contained in this broader write-up. This really is worth a read and I am considering getting this guy's book.
I am still thinking deflation because as much money as they've put into the markets I still think credit is contracting fast. But it is scary... Certainly should the market change that credit can expand and be leveraged grossly out of wack again it would be inflationary because there's no question the base has gotten considerably bigger.