All currencies in the history of the world have ended badly, and they have ended through the printing press. I do not believe that governments will continue deflationary policies indefinitely, because it is difficult to imagine lenders lending in such circumstances, even to the governments. I believe that the deflation view is wrong. There are three active deflation scenarios, two of which have been expressed here today. But before I talk about these scenarios, I would like to make sure we all are talking about the same thing.
Deflation occurs when the broad-based price index falls.
Pointing out that some prices are falling does not necessarily imply a general deflation. If we had zero inflation, some prices would fall, some prices would rise, and the average would be zero. Even in peak periods of high inflation, certain prices have gone down. We would expect with low inflation that many prices would be falling, and they are. Computer prices continue to fall, and medical prices are falling, but that is ultimately not important.