Those who forecast deflation fail to make this key distinction. What they forget is that while prices will be falling, the value of paper dollars will be falling even faster. So they will be correct in that prices will indeed fall in terms of gold, but they will totally miss the mark in that prices will skyrocket in terms of paper dollars being run off the printing press at warp speed.
Instead of letting deflation happen, the government is doing all it can to stop it by printing money and buying up assets to keep prices up, to keep debts from going bad, and to make sure everybody is kept whole. Not a dime has been lost by people with money in bank accounts or even in money market mutual funds.
Everything the government is doing is the opposite of what it should be doing.
Peter Schiff, Crash Proof 2.0