Any Fool Could See This!

People can't understand the difference between "inflation" or "deflation" because they keep focusing on the wrong things (like prices.)

Inflation in a fiat economy is the increase in credit. Deflation is default of past credit.

What do they have in common though?

Lack of purchasing power.

However, for entirely different reasons.

In, inflationary economies (US 1970's, India 2011, China 2011), you are losing purchasing power because your salary is not keeping track of the money printing machines (= prices.)

In deflationary economies (US today, Greece 2011, Spain 2011), you are losing purchasing power because your wages are collapsing relative to prices.

Yes, it can be coincidental. It's called "money flow". What's inflation for one economy is the deflation for the rest and vice-versa.

In the US, we are still very much (and shall continue to be) in the Big-D!