Inflation or Deflation going forward

Hi there
Welcome to the new year. Going back and looking at 2008, it was a tough year for most of the investors. Well, I what our think tank says: 2009 might turn out to be equally if not more volatile because of the interventions by the Central banks and governments around the world. After all Interventions dont let the market funtion the natural way.
Alot my reads these days have the mention of the debate going on about if Inflation or Deflation will have taken hold going forward and thus what are the implications for investments for the year 2009 and beyond.
Well, I like to bring to light a definition of inflation in terms of two major theories, given by two major school of thoughts.
According to the Austrian school of thought: Inflation is a monetary event and not an economic one, thus the relative increase in the money supply compared to the economic activity will lead to more money compared to assets, thus would lead to an increase in the asset prices.
Thus increase in money supply relatively, leads you to inflation.
Whereas, Keynesian school of thought says that inflation is an economic event, wherein the event itself leads to a general increase in the prices of assets. That means economic advancement leads to increase in the prices of goods over a period of time.
Going into the details of the definition is not the aim of this post, but let me state that Keynesian school has always used by the ruling elite to obfuscate and mislead the masses to retain their grip over the scheme of things and as usual general public content being safe with status quo does not dwell and study history has no inkling of what is right way.
So, going by the Austrian school of thought, second half of 2008 has been a pure deflation because of the evaporating money and money supply in critical markets: be they debt or credit or commodity markets.
But would it remain so going forward?
Make your own conclusions: Considering the capital infusions Central banks all over the world have made into the system and the lower interest rate regimes they all are embarking upon thus making the availability of the money cheaper + punishing the savings of people, money supply and velocity will have to increase over time.
Thus one factor that one would have to watch out for would be the money velocity which right now in US is below 1, meaning that the capital infused into the system has not trickled down into the veins of the economy. If the people all over the world, decide not spending whatever money has been infused, thus keeping the money velocity down, then Central banks would have to create an 'expectation of inflation', so that in anticipation of prices increasing in the near term, people start spending and thus the cycle tends to feed itself leading to what is generally being termed by the experts right now as INFLATION HOLOCAUST.