Deflation as I understand it accounts for not just paper money but also things like credit/loans/property valuation as well. Nobody should have any doubt that lots of "money supply" in the form of credit/bad loans/housing value was lost and deflated. And my understanding of "money supply" is the cumulative total of paper money and pretend money aka credit. Now the twist that I seek clarification on is what exactly does this "bailout" do to what I understand was a deflationary environment? Although if anyone can correct me if I'm wrong on my understanding of deflation I'm up for a lesson there as well.
The bailout has me imagining "hyper inflation" but I suppose that's only if the press can print fast enough to offset the real estate markets continued fall. Or of course if housing values were to reverse and head back up, which IMHO cannot see occurring at this stage.
Are we deflationary here, and if so what's coming next?