Absolutely correct. Imagine if the money supply (gold) was effectively fixed, or expanded only with new mine supply. Increases in productivity and technology would not be "stolen" by inflation (that only government and debt-issuing financiers), rather those benefits would flow to the masses of workers and American consumers, as prices would naturally decline reasonably and steadily. A middle-class person's real wages and savings would increase steadily. That's why America boomed in the 19th and early 20th century.
When prices decline, people hold their money. Why invest if you can just hold cash and wait for purchasing power to increase?
That is one of the driving forces behind deflationary depressions.