This isn't a deflationary spiral yet

Someone on a political forum I frequent called what we are experienced a deflationary spiral. A lot of terms are being thrown around these days and lot of people are reusing them without really knowing what they mean and applying them erroneously.

This isn't a deflationary spiral. It could turn out to be one but I don't think we can say it is one yet.

"Deflationary spiral

A deflationary spiral is a situation where decreases in price lead to lower production, which in turn leads to lower wages and demand, which leads to further decreases in price. Since reductions in general price level are called deflation, a deflationary spiral is when reductions in price lead to a vicious circle, where a problem exacerbates its own cause. The Great Depression was regarded as a deflationary spiral.

A deflationary spiral is the modern macroeconomic version of the general glut controversy of the 19th century."

Source: http://en.wikipedia.org/wiki/Deflation_(economics)#Deflationary_spiral

I don't think we're in a circular cycle yet where lower prices is causing lower production which causes lower wages and demand which causes lower prices and further lowering of production.
So far what we're experiencing is deleveraging of positions in assets with inflated values and shady backing and fear and panic which is leading to credit tightening, which is probably leading to lower production.
There's a lot of phony wealth that needs to be scalped off the top. Hopefully we can get rid of the fake wealth without plunging into a downward spiral