Numerous people have asked me to respond to the Zero Hedge post Deflationists Take Note: Bernanke Succeeds In Offsetting Shadow Banking Collapse

In essence, I had already addressed the issue in Williams Calls for “Great Hyperinflationary Great Depression”; A Very Easy Rebuttal when I said …

My call does not change. The US will go in and out of deflation for a considerable period of time, just as Japan did. The determining factor is mark-to market valuation of credit and money supply.

Right now, the Fed has temporarily overcome massive deflationary forces. For how long remains to be seen.

Some asked for a further explanation and emails still come in asking for a reply. In response, I added an addendum to my “hyperinflationary depression” rebuttal to address topics covered by ZH in his post.

If you missed it, please click on the previous link to see a detailed response specifically to the “Deflationists Take Note” article.

Bottom line: All things concluded, there is ample reason to believe the US is still following the path of Japan, and on a marked-to-market credit aspect basis the US will likely hop in and out of deflation for the foreseeable future.

Mike “Mish” Shedlock
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