Despite the market’s recent struggles, John Hussman — whose funds have some solid long-term track records — isn’t seeing a great opportunity to “buy on the dip”.

“My impression is that the market remains in a tenuous state in that we have not meaningfully cleared the overextended syndrome that has been with us in recent months,” Hussman writes in his latest market commentary. “We’re certainly not inclined to ‘buy the dip’ to a material extent, and I continue to anticipate a second wave of credit difficulties in the months immediately ahead.”

Hussman adds, however, that “if we can move through 2010 without a second ‘crisis-level’ wave of credit strains, we’ll be more able to rely on post-1940 criteria in setting our investment positions, with less concern about the more hostile ‘post-crash’ dataset.”

In terms of whether or not inflation or deflation is on the horizon, Hussman offers an interesting take, calling the inflation vs. deflation debate a “false dichotomy”. He thinks inflation will hit the U.S. given the massive wave of government spending, but he doesn’t think it will occur for several years. And, he says, “whatever happens with the general price level, we can expect wage growth to be uncomfortably tepid in the next several years.”

Hussman also has a lot to say about the European debt crisis. While European officials have attempted to portray their $1 trillion rescue plan as different from that of the U.S., Hussman says the plan in the end shares a similar goal: “to corrupt its balance sheet and debase its currency in order to protect the worst stewards of capital from the consequences of bad lending and poor investment.”

Hussman says it is hard to say when and how the European debt crisis will be resolved. But he suspects it will involve Greece, Portugal, and perhaps Spain ditching the Euro. And that, he says, is probably for the best.