Morgan Stanley: inflation is biggest risk

http://www.moneynews.com/StreetTalk/Morgan-Stanley-Inflation-Risk--Double-Dip/2010/07/30/id/366105

Inflation is the biggest risk to emerging economies, but it helps reduce the debt burdens of developed countries, including the US.

My investment thesis is that US government monetary officials will declare war on deflation in an attempt to ward off another (deeper) recession and curb high unemployment. This will justify the Fed deploying another round of fiscal and monetary stimulus, Quantitative Easing 2.0. This will stoke inflation globally, even if it could appear dormant in the US for a while longer.