With Europe slumping towards recession and Brazil doing the same, the US is fated to save the world from the horrors of deflation. Strangely, the US finds itself the only island of prosperity in a planet that is deflating. Ironically, money has been pouring into the US dollar, which in turn hurts our exports since this makes US merchandise more expensive. With the creation of additional trillions of dollars, the US has been unable to create its much desired 2% inflation rate. This, of course, is a testament to the deflationary forces. The European Central Bank, which would love to turn to QE, is stymied by Germany’s stubborn resistance to creating inflation.