What About Deflation?

The financial media is all about inflation, but actually we have seen the forces of deflation in action. Houses, stocks, and now commodities are crashing in value. Wages are probably next on the list. Inflation makes these go up, not down. Maybe we are simply seeing a decline in the standard of living instead of inflation. I am starting to rethink my bearishness on the long bond. The long bond has been the place to be of late, as the forces of deflation creep into our lives. A rate cut would keep the forces of deflation at bay.