Is it possible to have rising interest rates in a deflationary cycle?
It would be unusual, but it is indeed possible. The buyers of debt would begin to sense that there yet remains much rotten paper floating around, and they demand increased compensation in yield for increased perception of risk. This idea is a factor in the recent decline in bonds.
The bottom line is our nation will never repay the national debt, and it is a number much larger than the commonly accepted figure of $17 trillion when entitlements are counted.
Smart money is grasping this reality. The Chinese did some time ago.
In a deflationary cycle, ZNGA doesn't even matter. Our concerns will be much more basic than Farmville, Version 2.