A lot of my friends — both in real life and on the blogosphere — do not understand my stance as a deflationist and think that I'm a crazy lunatic — exactly what I think the likes of John Embry and Eric Sprott are :-)
Their assumption is that because I am a deflationist and I believe stocks will bottom only after a decline of more than 80% — more like 85% to 90% from the top — that I also think the CPI and prices of off the shelf products will fall by the same amount.
It is not the case. Give for example that the biggest purchase of a lifetime is a property, the fact that this property's price falls by 90% skews enormously the expenses and spending any consumer. It's enough to be extremely deflationary. That's exactly what happened in Japan.
And here's what it looks like: