Deflation mystery- Still unsolved

Deflation not a threat to economy: Bankers
With inflation fast approaching zero per cent, bankers have sought to allay fears that the country may be in the deflation mode on grounds that the consumer price index was still high and deflation was a statistical phenomenon due to base effect.
"Deflation is unlikely to have any major impact on the economy. Negative inflation, if it happens, will occur mainly on account of declining oil prices, easing monetary policy. It is unlikely to stay long," IDBI Bank Chief Financial Officer R K Bansal told media here.
Source: EconomicTimes

Totally agree with the bankers on this. Additionally, I think-
1. Inflation by definition is change in prices over a period of time. Fluctuations in demand and supply keep happening in all the markets and all the time. Deviations in prices from the equilibrium due to such fluctuations should not be taken as trends. In short- Let us wait for another couple of months to see the price trend (both CPI and as well as WPI)

2. The key point here is that WPI is near zero percent and the CPI is still around 9%Is this good or is this bad? Well...difficult to say now. Anyways, what is more important right now is to see and understand the forces that have led to a dip in WPI (still will not call it a trend)? Given that we do not seem to be in a liquidity crisis right now, falling WPI could mean that either the demand is falling or the supply is increasing in the goods market. Given the slight fall in the optimism in the economy, I think it is the former.
There can also be additional forces at work here. But, it will be interesting to see how things change from here.

The good thing is that the common man may actually start believing that the inflation in at zero percent and may start spending. However, we don't want to move into a situation where the common man starts thinking that the inflation is going to continue to fall- this will make him delay spending now.