Dang, you beat me to it! We've got oil, gold, and housing prices all plummeting and this proves that we've got deflation. Then again, we got prices for medical care, food, and education going up so does that mean we got inflation at the same time we got deflation?
Give that man the kewpie doll. That is the correct answer.
It's a race to the bottom. The Fed and Paulson's Treasury induced deflation (not Barney Frank) by making a rule that even foreign redeemers of CMO's, credit default swaps, and other exotic derivatives would have to settle in dollars, even if they were in the Eurozone. Hence a rush to dollars which has driven the (much-inflated) buck up from 71 to (Friday) 86 on the DXY (dollar contract) Index. Which in turn tripped up gold and oil, and started a big rush to unwind hedge-fund and mutual-fund positions, even among holders who desired to continue to hold these attractive assets. (See the definition of "fiduciary".) They had to sell, by law.
But the Fed and Treasury have injected so much cash, and the Treasury has so scuzzed up the national balance sheet by taking questionable assets onto the books of the People of the United States, in our name but actually for the benefit (IMNSHO) of the investment banks (of whom, remember, Hank Paulson is still one -- Treasury is just his day job), that an inflationary or even hyperinflationary reckoning would seem to be baked into the pie by now.
For a better-reasoned and more fact-studded discussion, have a look at this Minyanville article:
http://www.minyanville.com/articles/WMT-TGT-bailout-RAD-recession-deflation/index/a/19691
You might also find this discussion useful:
http://globaleconomicanalysis.blogspot.com/2008/10/keynesian-claptrap-from-pimco.html