Akkam’s Razor

President Bush has named Ben Bernake to replace retiring Fed Chief Alan Greenspan. Bernanke has the appearances of an independent thinker, more of a "technocrat than an ideologue".

What really got my attention is why his name rung some bells for me - the spectre of "deflation":
Via MSNBC:

In his two and a half years as a Fed governor, Bernanke was best known for raising the novel concern that the U.S. economy could be devastated by the type of deflation that crippled Japan for many years.

Without getting to deep into economics, of which I barely know anything, there are three ‘flations to be concerned about…

This article at SafeHaven defends the notion that deflation is a real threat, to be preceded by the "popping" of the housing bubble. The main factors that could cause this, as listed by Mike Sherlock, are:

1. Enormous consumer debt
2. Falling wages
3. Global wage arbitrage
4. Credit expansion that can not be maintained
5. Mal-investments
6. Over capacity
7. A world-wide housing bubble
8. A re-inflated stock market bubble
9. The normal business cycle
10. Past history

Now, given that Bernake has written on the Great Depression, and advances the point that deflation, recession, and depression are all intertwined, and the fact that all but one of the above factors could be described as in force, could the economic consensus in Washington be the deflation is on the horizon?