Deflation begets Inflation

Interesting 2009 forecast on the Accrued Interest blog. He doesn't see any inflation in 2009 since the Fed will be spending most of the year fighting deflation. However, "to suggest that the Fed will provide just enough stimulus to avoid deflation but not create a significant inflation problem down the road is ridiculous".

This is the important point: the harder the Fed fights deflation (and it's a given at this point that "there will be no limit as to how far the Fed goes to fight deflation") the more certain a nasty bout of inflation awaits us when the cycle turns.