Recently there has been a lot of talk among analysts and in the blogosphere about  whether we are headed for a period of deflation, inflation or possibly even hyperinflation.  There are two significant points to note about this discussion: (1) there is no consensus view and (2) has there been a period in recent history when the debate equally includes the prospects for all three (inflation, deflation and hyperinflation)? 

It’s all very unusual and points to just how much risk and uncertainty there is out there - the financial crisis is only in hiatus: the second phase may well turn the economy inside out like a thousand year flood.  As with the initial phase of the financial crisis, a few Cassandras are issueing warnings that the mainstream is ignoring at its peril.

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