Thought-provoking new piece by Bill Gross, of PIMCO. Download the PDF here.
The multi-decade, debt-financed party is over, or at least, in a very different phase. Obviously the natural tendency from here is deleveraging and deflation, but because of that, central banks are printing a lot of money. So we have two possibilities: deflation caused by the "real" economy, and, at the other end of the bimodal distribution, inflation caused by the response of central bankers (if the medicine works, and the dose is too big, inflation will be the result of the otherwise-deflationary illness).
Keep in mind when you read Mr. Gross that he has a distinct point of view. He runs a bond fund, and tends more than most to see a world of low inflation (i.e., a world not too scary to bondholders). Many would say that he thinks that way because he runs a bond fund. Maybe. But it is also possible that he runs a bond fund because he already thought that way before he started. Doesn't matter too much which, as long as you keep in mind that he has a particular point of view.