As the economic crisis continues to unfold, recently a sense of uncertainty has begun to pervade the market. Even dyed-in-the-wool risk takers admit that they don’t know what to think anymore. Inflation, deflation, recession or depression – there are so many vagaries that it appears to be anyone’s guess what will happen next.

Losses of $500-$600 billion are enough to make anyone shudder. But Charles Delvalle says these estimates don’t come close to measuring the eventual fallout of the current credit crisis.

Credit losses could reach $2 trillion. That translates to $10 trillion of liquidity wiped out, using a very conservative estimate of leveraging (Lehman Bros (NYSE:LEH) had a leverage ratio of over 30 last year).

Charles says we could be entering the biggest deflationary period since the Great Depression. The best protection lies in top grade corporate bonds.