Hyperinflation Warning!!...

Just kidding.

The cost of living in the U.S. unexpectedly dropped in April for the first time in more than a year, reinforcing forecasts that the Federal Reserve will keep interest rates near zero for much of 2010.
The 0.1 percent fall in the consumer price index was the first decrease since March 2009, figures from the Labor Department showed today in Washington. Excluding food and fuel, the so-called core rate was unchanged, capping the smallest 12- month gain in four decades.
Retailers such as Wal-Mart Stores Inc. are cutting prices to bolster sales as customers face almost 10 percent unemployment and rising foreclosures. The European debt crisis, which has pushed up the value of the dollar and may restrain global growth, will probably further depress prices at a time when inflation is already running below Fed policy makers’ projections.
“There simply isn’t any kind of price pressure of any consequence,” said David Resler, chief economist at Nomura Securities International Inc. in New York, who accurately forecast the decline. “This puts the Fed firmly in place for the foreseeable future.” [More]

I probably shouldn't ping on this too much, but virtually all Deficit Doomsday scenarios depend on a plummeting dollar and runaway prices for their scariness.  What seems to keep happening is the US economy manages to look slightly less ugly than the other choices, and the scare talk may actually reinforce the flight to US-denominated safety.

This doesn't mean inflation isn't a threat, but it sure isn't going to catch us by surprise.