Inflation vs Deflation Debate - Marc Faber vs Mish Shedlock

Marc Faber and Mish Shedlock debate on inflation vs Deflation- The Keynesians will Bankrupt the western world

Mish Shedlock, of SitkaPacific Capital is one of the very few economists to have warned about deflation rather than inflation , Mish debates Marc Faber who have always warned about inflation / hyperinflation : Mish argument is that Credit is contracting, despite Ben Bernanke's trying to expand the money supply , but that money supply is just sitting there as excess reserve on the balance sheets of the banks , unless that money makes its way into the economy we are not going to see inflation I think there is another leg down in housing certainly another leg down in commercial real estate , we have not seen the write offs that are gonna happen with credit cards , lots of defaults coming , and more recently we are seeing something else too : where state budgets are coming out of control where states have to cut back we are seeing it in New Jersey we are seeing it in Kansas we are seeing mayors of various cities proposing to fire all the city workers and hire them back as non union workers , all of that stuff is a deflationary force , but the real point here is that Bernanke can print all that money but unless that money makes it to the real economy we are not going to see inflation " Mish explains
"The money supply is just sitting there as excess reserves on bank balance sheets," Mish says
Marc Faber on the other hand : says that Bernanke also known as 'Helicopter Ben' is good in dropping money on the US economy , he won't do it from a Helicopter but he will do it electronically , there is a biog misconception that when the economy is poor there deflation and when the economy is strong there is inflation it is the opposite says Marc Faber , because when the economy is bad the government pile up this fiscal deficits and they print money , there is a private credit contraction which is offset by a government credit expansion Marc Faber added and they gonna print and print and print and eventually another symptom of inflation besides soaring oil price since December 2008 , soaring equity prices since March 2009 will be rising consumer prices across the board and also all services will become more expensive