[jmherbener]

In fact, neither hyperinflation nor deflation are in the interest of those who run our central-bank, fractional-reserve monetary system. The system benefits its members (some more than others) by generating ongoing monetary inflation and credit expansion. Most of the time, then, we get that result. The exceptional cases, like the deflation of the Great Depression or the inflation of the 1970s, occur when our preferences change dramatically enough in response to the forces of the boom-bust cycle that the Fed is unable or unwilling to counteract their effects. It seems to me that Bernanke has demonstrated that under his leadership, the Fed is both willing and able to prevent any monetary deflation. Given his inflationary bias, I think the next decade will be more like the 1970s than the 1930s.