Can you say "De-flation"

In a recent video, Robert Prechter says the Dollar will hit a "Major Bottom" and that a deflationary depression is coming.

Social Safety Nets Mask Deflationary Depression

Robert Prechter, president of Elliott Wave International

is looking for a "major economic depression.” I think it’s clear we’re already in one.

Dollar Hit's a "Major Bottom" [Video]
http://finance.yahoo.com/tech-ticker/article/298957/Dollar

The only reason it’s not more readily visible is because people are living in foreclosed houses, unable or unwilling to pay their mortgage; one in 9 people living in the US is on food stamps; and unemployment insurance has been extended twice. Congress is now debating extending it a third time.

If Congress doesn’t act, 500,000 Will Exhaust Unemployment Benefits by September, 1.5 Million by Year-End.

Although the official unemployment rate is a mere 9.5%, alternative measures show it’s over 16%. Moreover, an unprecedented 4.4 million workers have been unemployed and looking for work for 26 weeks or longer. "Wage freezes, benefit reductions, and mandatory furloughs are hitting a wide gamut of white-collar, blue-collar, and no-collar industries."

In simple terms, more social safety nets are in place now than during the Great Depression.

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(Full) http://www.minyanville.co... src="http://www.mylot.com/images/emotes/confused.gif" alt="confused"/>Define "DEFLATION:"

In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the annual inflation rate falls below zero percent, resulting in an increase in the real value of money — a negative inflation rate.

The term deflation was used with an alternative meaning by the classical economists, to refer to a decrease in the money supply and credit.

Deflation should not be confused with a temporary fall in prices; instead, it is a sustained fall in prices that occurs when the inflation rate passes down below zero percent. That is, there is a fall in how much the whole economy is willing to buy, and the going price for goods. Because the price of goods is falling, consumers have an incentive to delay purchases and consumption until prices fall further, which in turn reduces overall economic activity - contributing to the the deflationary spiral (and fall in investment!).

An answer to falling aggregate demand is stimulus, either from the central bank, by expanding the money supply, or by the fiscal authority to increase demand, and to borrow at interest rates which are below those available to private entities.

A different view is that deflation increases sales and economic activity by making essentials (food, housing, fuel etc.) which cannot be delayed, more affordable to struggling consumers, thereby reducing severity and duration of recession.