In short, the economy then was limping because the dollar was in an inflationary spiral downward, and its descent led to the relative starvation of economic innovators.

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That has raised global concerns that China will have to tighten so much to prevent an inflationary spiral that it will bring its economy in for a hard landing, into a recession.

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The good news from the deflationary trend, of course, is that it makes it unlikely the Fed will raise interest rates here, and almost guarantees that the U.S. economy wont go into an inflationary spiral.

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This is probably a good thing as the vicious circle of stated inflation driving an inflationary spiral is often the reason for inflation itself, yet below the headlines inflation is just a process of too much money in the system.

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Fed Chairman Ben Bernanke, who has been accused by many of setting the stage for an inflationary spiral through his asset purchase programs or QE (quantitative easing), recently said he has the best inflation record of any Fed chief in the post-war era.

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