Yesterday’s release of the FOMC minutes seriously called to question the potential onset of deflation and it is causing the battle lines to be drawn. There is no question that the FEDERAL RESERVE BOARD is in the throes of a battle between those who remember 1937 and those who are more prone to favor some cleansing of the financial system by bearing the costs of too much debt. Thomas Hoenig, Jeffrey Lacker and others are worried that the FED has stayed too loose for too long and are merely going to recreate the atmosphere that was responsible for the current crisis. Bernanke, Rosengren, Kohn and others are output gap-oriented and remember the pain of stimulus removal before growth has gained traction. This is where we are in real time and the FOMC minutes reflect that the FED CHAIRMAN has and will prevail. Since Bernanke is an academic, he gives open debate a place in his FED–unlike the autocratic Greenspan. But debate is not outcome and while the media gets to fill time and space, the FED’s most recent minutes has illustrated a clear path.