Nathan’s Economic Edge has a pretty good capture of where we are presently. Check it out. (ht TPC)

…a pretty clear picture to me, one of DEFLATION at work. It is accelerating, not decelerating. That is a HUGE divergence from what’s occurring in the equity markets and from what you hear on television from the supposed experts.

I think we are on the precipice of a self-reinforcing deflationary spiral. The data is historic. The disconnect between the data and perception is historic. The Fed is attempting to do a magic trick by printing their way out of debt – it’s a trick that has NEVER worked throughout the history of mankind and will not work to create real growth now.

Debt is the ball, keep your eye on it and you’ll see through the Fed’s attempted magic trick and slight of hand!

While the money supply measured by viewing banks reserves or even deposits is increasing, total debt is collapsing.  The government’s valiant effort to offset declining private debt with massive government borrowing is not working.