You get inflation from the destruction of the means of production/service of an economy.
Why did Zimbabwe get hyperinflation? They took over their farms and gave the farms to non-farmers.
OK, why do you get deflation? In a credit-based economy, you get deflation when credit availability is destroyed.
Thus, if printing more cash destroys more credit availability, then you get deflation.
Deflation is an economic reaction to a slowing speed of money. Lower prices encourage spending sooner.
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You seen some of the editorial work I've been up to?
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The point is, in an integrated worldwide economy, the velocity of money in major countries (I don’t think Zim really counts here) is closely tied to ALL business expectations, not just those of the US or Europe. A Chinese contraction would cause velocity everywhere to slow.
Falling prices over time reward delayed purchases, creating a vicious cycle as sellers become increasingly desperate for buyers, who begin to delay every purchase as much as possible. Credit naturally contracts without deliberate intervention due to bad debt caused by loss of collateral value.
What we’ve seen is massive intervention resulting in commodity bubbles. Stimulus is finding its way into the few areas with reliable demand.
Slumping overall demand is the root cause for deflation.
The United States currently has 20 million people unemployed as a consequence of these processes. We'll probably end up with another 20 million unemployed from the same processes in just a decade.
We have to figure out how to keep folks employed and paid.