The main reason is the velocity of circulation of the US dollar.

It looks to me like the euro crisis has triggered a huge flight of capital out of Europe and into the US.
This new demand for the dollar and dollar-denominated assets is causing the velocity of the dollar to fall.
A fall in velocity has the same effect as a deflation of the money supply. Dollars that are being held and not traded are dollars that are effectively out of circulation — they're not bidding up prices.

Interestingly, this connects with recent money supply changes. Some background:
The broader measures of money supply — M2 and M3 — are lower velocity than the narrower measures, especially the Monetary Base. This is because broader measures contain financial instruments that change hands more slowly. M3, for instance, counts large-denomination time deposits. These are not included in narrower measures.
An even broader measure is L, which, as far as I know, is no longer compiled by the government, or at least officials do not admit to it. L contains, among other things, Savings Bonds, which some people hold for twenty years or more.
Why L is no longer compiled, or is complied in secret, we don't know, but I think we can safely conclude it contains information the government does not want us to have.

Recently, the broader measures have been shrinking, while the narrower ones, especially the Monetary Base, have been exploding.
I think people are moving money from instruments included in the broader measures to instruments in the narrow measures.
The narrower measures have a hair trigger, they can be sold or moved instantly. I think people are very frightened and they want this flexibility. They are afraid of any kind of long term commitment.
But the narrower measures, especially the Monetary Base, are mostly still just sitting in the banks. Bankers are afraid to lend, and a lot of borrowers are afraid to borrow, so the money just sits, waiting for launch.
It seems likely that people are moving into narrow-M instruments because they want to be able to move their cash quickly, in hopes of dodging the effects of the next crisis.
Summarizing, because of the rise in money demand and fall in velocity, triggered by the fear generated by the euro crisis, I think we are in another severely deflationary situation.
This constitutes a buying opportunity, because I'm sure the Fed will not allow the deflationary conditions to spiral down into a depression. They will look for ways to get the money out of the banks, or inject more money directly into the economy (more "stimulus") setting us up for a runaway inflation that will drive prices of practically everything to the moon.
Repeating what I've said often, you should learn all you can about money demand and velocity because, in my opinion, they are now by far the dominant forces causing changes in the economy and investment markets. Velocity was explained in the June 2008 EWR, in chapter 8 of my little Uncle Eric book #2, WHATEVER HAPPENED TO PENNY CANDY?, and throughout my Uncle Eric book #7, THE MONEY MYSTERY. (There are 11 Uncle Eric books.)
On another matter, I am sometimes asked...

... why I don't use stop loss orders?

Because I've never had good luck with them. This newsletter isn't called Early Warning Report for nothing. I'm usually early. I buy the investment, it goes down, I get stopped out, then it takes off like a skyrocket.
This isn't to say stop loss orders should not be used by you. Maybe your luck is better than mine.
However, I would point out what happened during the May 6th "flash crash." The Dow plunged 998.5 points in 20 minutes, then came back. Thousands of investors were stopped out and left with big losses that would not have happened if they hadn't used stop loss orders.
I think a lot more of that kind of thing is headed our way. The fiat money system has begun to crumble. This is becoming obvious to all, now that the euro is in trouble. And, the heavily regulated global investment system is riddled with fraud, foul-ups and fear. The tens of thousands of incomprehensible financial regulations are a jungle where the crooks hide.
Many things could trigger more downward (and upward) spikes. Examples would be war with Iran or North Korea, more revelations about the colossal frauds committed by the euro governments, a natural disaster, or a US invasion of Pakistan.
Also, very likely, the "plunge protection team" (aka the President's Working Group on Financial Markets) will make a mistake.
Everyone on that team is as much a member of the species homo sapiens as you and me, and equally inclined to occasionally fumble.
The Plunge Protection Team has so much power to intervene in financial markets that it's like a Greek god — supernatural powers steered by the emotions and guesses of exceedingly fallible humans.
It seems to me a certainty that the day will come when they will pull the wrong lever and demolish the whole world financial system.
And if the US team does not do it, the Greek gods in some other government will.
This is one of the many reasons it is important to have a portion of your wealth outside the financial system.

A gold, silver or platinum coin in your hand...

...is a great deal safer than your bank account, T-bill, stock or any other financial instrument in the hands of the Plunge Protection Team.
The Aden sisters are two of the best analysts around, and I never hesitate to recommend their newsletter, The Aden Forecast. In their May 11, 2010 issue, they wrote,

It's impressive to think that gold's bull market is in its tenth year. It's had consistent yearly gains since 2001, averaging 17% per year, yet it's still a quiet market.
The average investor is really not aware of this, but they are slowly seeing the turn. This alone strongly suggests the gold market is far from being a bubble.
Bubbles cause a lot of attention while euphoria is in the air. But comparing the enthusiasm in today's gold market to the tech frenzy bubble in 2000, or the real estate craze in 2007, the difference is like night and day.
This is good for gold investors because it's saying that the gold market still has much further to rise in the years ahead.

I agree with every word of that, and I would conclude the same about silver and platinum.
This isn't to say the precious metals won't go through frightening gyrations. I think they will, because I think everything will. As money demand and velocity bounce around, so will prices of nearly everything you can name.
As long as governments have as much economic power as they do, wild gyrations will be the rule, and stability will be unknown.
If you are not holding at least a quarter of your wealth outside the financial system — in precious metals, fine art, a business, antiques, real estate, or other tangible assets — then I suggest you get started.
And, I hope you will encourage everyone you care about to do the same.
I will continue doing my best to get you through this period of turmoil as safely and profitably as possible. I believe there is a better world waiting for us on the other side, and I want you and yours to be in fine shape to enjoy it when we get there.