Can we agree that price deflation is possible in some items while there is simultaneous price inflation in others?
No. Sorry, Uncle Miltie says "Everywhere and always a monetary phenomenon." That's our fundamental disconnect: the basket-of-goods measure is a proxy.
Yeahbut, isn't that "proxy" what the author uses to conclude, "Inflation is falling in the United States, Europe, and China, suggesting a real threat of impending deflation that could cripple the global economy?"
Inflation may be "everywhere and always a monetary phenomenon" but economists always use consumer prices to measure it. So why are we supposed to pay any attention to them? Why is CPI valid when they cite it and not when I do? Argumentum ab auctoritate?
My premise that prices on discretionary items are falling while essential items, with their inelastic demand curves, continue to rise was to be followed with a suggested cause. Namely, that income insecurity increases savings rates and reduces demand for discretionary items, thus reducing prices. 'People not buying stuff' is not a symptom or a cause of deflation. Further, it is certainly not a "monetary phenomenon."
Also notice that two of those essential items, food and energy, are explicitly omitted from the CPI basket. If we mean for the basket to be an inflation/deflation proxy, how can such omissions be justified?