Ok, well firstly I'm assuming thats your arguement not Richard Russell's?
It seems to me a little ironic that you would attribute the onset of deflation to some variant of the peak oil argument. As you have seen, the perception of oil scarcity has spooked markets and sent inflation and inflation expectations higher. You say per capita energy is in decline, and that that oil is on a 'permanent and irreversable decline'. Putting aside what that actually means for now - you must be assuming that scarcity of this kind will cause inflation to be such that prices of wage goods would rise so high to destory demand completely and cause global recession, which then leads to this deflation era?
If that is the argument, then this is really a peak oil debate, which goes on around here all the time with no particular outcome. And if that's all it is then forgive me for not shaking in my boots about deflation.
