Best of Both Worlds

If you look back at the last century, the two most noticeable negative economic episodes were the great depression of the 30's, when the popping of a large credit bubble led to deflation and massive unemployment and idle resources, and the oil shocks of the 70's, when sudden increases in the price of basic resources that society is built on led to rampant inflation combined with lacklustre economic conditions - stagflation in a word.

Currently, we are seeing both the deflation of a global credit bubble AND sudden increases in the price of oil and other resources. It's no wonder that people who pay attention to these things can't seem to agree on whether we should be worried about deflation or inflation - but do agree that we ought to be worried.