This article sparked questions on potential for U.S. hyperinflation.....
http://www.generationaldynamics.com/cgi-bin/D.PL?xct=gd.e071221
Japan has had near 0% interest rates for decades, but still has no hyperinflation... Why?
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Just a personal perspective.
I have lived in Japan for a decade now, enjoying deflation (deflation is good for cash-savers) as prices remain unchanged or continued to fall.
The main things I notice about Japan is that the public has just not fallen for the bait of cheap credit since the bubble burst. Houses are perceived as a depreciating cost, only bought after due comparison to rental costs. There has been no speculative mood for property since the bubble burst. They think America was simply nuts to have followed a speculation fueled asset-inflation model which already failed so spectacularly in Japan. During the bubble, banks were lending 130% against land.
Japanese people now save for goods rather than use extended credit. That is how it seems to me, anyway.
My credit card works more like a debit card. I am asked at the point of sale if I would like to extend the terms of repayment. I always choose 'one-pay' and the full amount is automatically debited from my bank account at the end of the month. That is hardly a recipe for hyper-inflation, even at zero percent interest rates.
The culture of consumerism is alive and kicking in terms of demand for goods (lining up an hour for Krispy Kreme donuts, the latest iphone, or the privilege of paying $100 to watch two fat men in diapers rolling around in sand ), but the mentality is completely different to the West in terms of attitude to debt. Save, then buy, not the other way around. That is how it seems to me anyway and it would certainly help to explain the apparent oxymoron of deflation accompanied by cheap credit availability. Credit here is like Betamax video; great quality, but no thanks.
I'm not Japanese, but I do have an aversion to debt and live a frugal lifestyle way, way, below my means. Much to the surprise of posters on another board, I do not own a fridge. ;-) Why do I need a fridge - the shops are all within a short walking distance so I let them store the food until I want to consume it.
Yes, I realize that 'frugal' can also be termed 'tight-wad', but I am not a miser, just averse to waste.
In brief; people like me (and there are now many in Japan - they *learned* from the bubble experience) will not be the source of a price bubble in anything. Too 'frugal'. ;-)
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