INFLATION OR DEFLATION ?

I keep hearing people worrying about inflation when deflation seems to be what is occurring.

It is being observed that interest rates on Treasuries are falling (including the 30-yr which is now below 4%, I believe) and have been for some time which is deflationary, not inflationary. What is their time frame for inflation? Do they think it will happen, for example, before the end of the year? What will trigger it?

The employment picture is not good, which is a deflationary sign not an inflationary sign. Interest rates are falling, on CDs and Savings Accounts as well as on Treasuries, which is not an inflationary sign. Public confidence is falling which is not an inflationary sign. Financial sector loans on real estate are falling which is not an inflationary sign. Corporations are banking money which is not an inflationary sign. Housing sales seems to be in a double dip which is hardly inflationary. There are increasing cries for Federal and state fiscal austerity which is not inflationary. In fiscal austerity, government employees (teachers, policemen, firemen, Civil Servants, etc.) get laid off, contracts with companies get canceled and new ones are curtailed, etc., which is deflationary, not inflationary.

I think people look at all that deficit spending by the Federal government and think it MUST mean inflation. It seems reasonable. But what all that deficit spending seems to be doing is to keep the present situation from being much worse than it is. Well, I have been expecting runaway inflation since 2001, but no longer speculate when it will occur. As for me, I'm going with deflation and finally became convinced of it just a few months ago and have been investing accordingly, e.g. such as buying a block of 30-yr Treasury bonds at 4.5% interest a few months ago. With the fall to 4% interest, the value of the bond has increased by about 7.5%. There are those who speculate that the interest rate will fall to about 3%.