Are we heading toward DEFLATION

I know lots of folks are screaming that the runaway spending in Washington will lead us into hyper-inflation similar to what happened in Argentenia, but I have to wonder if we are not actually slipping into a period of deflation, similar to what happened in Japan.

Anyone have any reasonable guesses on this?

I see oil dropping, its trading under $74 per barrel down from $90. Gold and silver have pretty much stalled, granted they are near their highs but they've stalled within a modest range for the past couple months. Food peaked about a year ago but seems to be holding firm. Clothes and many consumer goods seem to be getting cheaper. Housing is showing no signs of firming up and foreclosures are up, so I see housing and commercial real estate losing more value.

What are you seeing?

Yes we easily could be. And like Japan we may never recover from it.

We should be headed for high inflation with all of this accrued debt…. But…
The economy is so bad it can’t inflate.
It looks like stagflation to me.
Remember the government can pay off all of its debt by devaluing our currency (high inflation will accomplish the same thing). It’s like I borrow a hundred bucks from you and with the inflated monies, I only pay you back eighty dollars.
Gold is too expensive and the bottom can fall out at any moment.
I have been buying utility stock (natural gas) and if everything falls on its ass, you could end up with a spare tire off of one of the trucks.
Don’t buy any stock until after September, this month is when the stock market always tanks.

I wish I had a crystal ball to figure this out.

You mentioned food prices. What I'm seeing both in the stores as well as market forecasts is that food prices are rising and will continue to do so. Due to the drought and subsequent fires in Russia which wiped out at least 20% of their crop (and their subsequent banning of exports of Russian wheat), wheat prices are most likely going to soar. As wheat goes, so will the rest of the food.

Don't forget that ethanol plants keep corn prices way up so all food products made with it are also rising. The big difference with this cycle is some items will just not be subject to the inflationary trend due to low demand from fear on the part of consumers.