While those two battle it out, it looks to us that stagflation is the most likely outcome for this economic slowdown -- we've already told you why the economy is barreling toward recession, here's why inflation is more of a concern than Alan Greenspan would lead you to believe:

The Consumer Price Index is up 3.8% in the first four months of this year. (In comparison, the CPI rose only 3.4% in both 1999 and 2000.)

Smart traders see inflation coming. That's why the yields on the benchmark 10-year Treasury note are climbing.

Meanwhile, energy prices are screaming higher at a 10.3% annual pace. And things are getting worse. Crude oil hit $30 a barrel on Monday, the highest price since February of last year.

But what should be a flashing neon "DANGER" sign for all investors is the fact that the price of gold, a natural hedge against inflation, has gone through the roof. It was up $13 last Friday ... $10.75 higher intraday on Monday ... and is up a total of 11.4% against the dollar since April 2. Wow!