Optimism

If credit is used for productive expansion, it need not result in collapse. Our credit boom does appear to be finally imploding though.

Japan's real estate collapse brought about massive expenditures on infrastructure, which follows along with your reasoning of what the credit is spent on. I think with this recent bridge collapse we're about to see similar expenditures here in the US. On a massive scale.

"Stagnant wages and a declining dollar have thrust the country into a deflationary cycle"

This is when the hellicopter drop comes into play, these deflationary bubbles being popped are in reality only the elite pulling out their profits.

Pirate Capitalism only follows two rules.

Rule One, Pass the costs on to the Public.

Rule Two, keep the profits Private. These are the only rules one needs to follow in order to understand how the game is played. Peace.