I ran across this video and had to share it, because it shows that the principle of inflation is so basic it can even be explained to children on a cartoon like Ducktales.  The end of the video suggests that deflation won't occur with the Federal Reserve system that we have; that we will be stuck with inflation and its negative consequences.  This is probably true, since we now have "Helicopter" Ben Bernanke as the chairman of the Fed, a guy who has promised to go as far as releasing money from helicopters if necessary to fight off deflation.

However, I'm not as sure about that as I once was.  A big problem is that inflation comes today not so much from an increase in the actual money supply but from increase in credit.  Credit inflation may be worse than monetary inflation, because if it is overextended to the point that it requires a deflationary correction, then it is entirely possible that we may suffer the ill effects of inflation and deflation simultaneously.  We may find ourselves in a situation where the economy is deflating due to credit contraction (including all its ill effects such as unemployment) at the same time as the actual money supply is inflating (causing price inflation, etc).  It truly may end up being the worst of both worlds.

Here is the video: