Ugh. Horrible article. First off, Mish and Denninger have been calling this delation for MONTHS. Deflation isn't COMING, it's here.

That restriction of money supply (credit) IS THE DEFINITION, NOT THE CAUSE of delation seems lost on this man.

Inflationists such as the Austrians perhapsf didn't see this coming--the lack of apparent inflation as we dumped money into banks is because most of this got dumped into the GLOBAL money supply: the banks bought foreign assets or sat on the cash initially. However, all global currencies were taking a hit at that time. And in fact, it's admitted by Bernake et al: most of us have no idea, no way of knowing and nobody to ask where all the bailout money went. I just heard they were having parties in Dubai around that time.

So very good boys, you noticed it's hard to refi the home now or get credit. Gee, I wonder why. And commodity prices haven't really fallen, gold maintains close to it's 5 year high, gas is holding in there and there's a world-wide scramble for "safe haven" investments. The food on everybody's plate is steadily getting more expensive. As as conumer item production falls inline with reduced demand and skyrocketing international shipping costs, guess where your $2 t-shirts and $10 bluejeans are going?

The way of the dodo that's where. Don't confuse that with the fact that dumping trillions into a broken system isn't inflationary. I wouldn't even confuse it with credit availability at this point because supra-market entities and not "organic market forces" now drive Wall Street and the money/credit supply.