Inflation vs Deflation.....how do you tell?

I have been busy with work and not paying too much attention to my finances. But then, I am more of a buy and hold guy than a "trader" anyways.

Well, I poked my head out of the sand today, and noticed that a lot of things were changing. In fact, I thought the market had been going up for a time a few weeks ago....and I was susprised because I just didn't see a reason for it.

But now it seems to be sliding down, and at least doing a sideways dance.

I also noted that there were talks about higher then expected inflation...but I wondered it that was due to rising energy and food prices, or if it was across the board.

Interesting to find this article that seems to be saying that there are a number of things that have actually been going down.....

Why do I ask....well, deflation is a very bad thing, and should we fall into that spiral, we would be cooked.

Our economy is based on spending, and at the very least investing.....we invest in areas looking for a return. If the return is larger just putting the money in our mattress, then that is what happens.

But the economy NEEDS money out there....flowing from place to place.

Without it, it isn't dynamic.

Deflation results in a situation where you make more money just sitting on it....so people do. But this just goes to further contract the supply of money....which cripples the economy.

I wonder if energy prices are being manipulated to keep inflation positive. In fact, perhaps inflated to stunt the growth of trade.....which would tend to create more "home-grown" opportunities everywhere...and less "outsourcing".

The result might be a slowing of capital drain from places like the USA, which is already in a heap of trouble in that regard.

But is it possible that any group can have such control over energy? I think not, but then.....never say never.

Well....I'm not sure what is going on....but at least investment things are going in a direction that makes sense to me....albeit DOWN!

Oh well....I'm still looking for the bottom of the housing market....maybe that would be the time to invest in rental property. (risk, risk, risk.....)