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The Deflation-Inflation Alternate Routes to Depression

The coming economic collapse (Depression) is inevitable but the route taken to this ending is uncertain. The road has parallel routes:

  1. Deflationary Collapse
  2. Hyperinflationary Collapse

Which route is taken depends upon government. In our highly regulated and manipulated economy, economics is important but generally takes a back seat to political considerations. As Axel Merk stated (with my emboldening):

Ultimately, we believe that markets are healthiest in the free-market environment but unfortunately, that’s not the world we live in so we have to look at interaction between the market forces and policymakers. If there is one thing positive to say about our policymakers, it is that they are quite predictable.

The Fed has backed off (temporarily) further monetary stimulus. Or, at least that is what they would have you believe. There

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