But Gary Shilling, president of A. Gary Shilling & Company, argues that the real threat is not inflation, but deflation. He says that supply generally exceeds demand these days, driving prices down. If you combine that with slow economic growth in the U.S. in the years ahead, Shilling says the result will be deflation.
What about the next round of quantitative easing (QE2) expected in early November? Many believe that further stimulus to the economy could lead to inflation, especially if it is not carefully done. Shilling, however explains why it won't make much difference.