I am not invoking his authority, but his piece is a convenient and concise depiction of the current situation.
Now, if you accept his basic framework, the likelihood of a much more serious collapse (he broaches the possibility of a "new Great Depression") depends on monetary authorities in Japan, the EU, and the U.S. refusing to pump liquidity into the economy soon enough and fast enough.
Under the doctrine of inevitability (DOI) that some here seem to imply, if I have understood you at least partially, there must therefore be some reason(s) why such a policy would have to be rejected. I do not attach pejorative implications to a DOI, incidentally. If that's what you've got, now is a good time to motivate it.
There is clearly a narrow interest in deflationism, by and large, but it is not obvious to me why such an interest must assert itself in the face of increasingly obvious threats to social stability.
For PK, it is merely a matter of hidebound "ideology." I would think that any Marxist doctrine of inevitability would offer more compelling factors which would certainly foster ideological rationales but more important, convey some bundle of economic and/or financial imperatives to the guys in charge.
One story broached here and elsewhere is the idea of razor-thin profit margins which leave massive numbers of business firms and their employees vulnerable to market perturbations. This is unconvincing on the surface because profit rates have been high and such a fear would seem to add to pressure on monetary authorities to ease. I expect manufacturers will start howling for the Fed to ease, as they have in past episodes. The question is still, why shouldn't we expect this and end up looking back on this as we currently do at the '87 glitch.
Go ahead and school me.
MBS