Yes, when your money buys more that's called deflation. Is deflation bad?
It's not. It's the SUDDEN contraction of credit after an inflationary boom that causes the unprofitable entities (malinvestment) to go under.
You can have deflation without having an inflationary boom first.
The contraction of credit is caused by bank failure.
You can have deflation without bank failures.
The bank failure is caused by runs on the bank after the market recognizes the unprofitable entities and depositors think that their deposits may have been loaned out foolishly. Since the inflation was caused by banks lessening their reserves(loans in excess of deposits on hand), they don't have enough to cover the run and they fold up shop leaving their depositors penniless.
You do know the evil Federal Reserve will be the lender of last resort to prevent a bank run from causing a bank to fold? And FDIC insurance will stop depositors from being left penniless.
Under the latter, though the loans will have to be paid back with "stronger" money, the strenghtened money will also purchase more goods in the market, offsetting the loss to the debtor. The mortgage will be harder to pay but the groceries will be easier to buy is the best way I can put it.
And is the supplier of the groceries harmed by the lower price he receives for his goods?
The Great Depression was just the grandaddy of all banks (the Fed) doing what little banks had done all along --issuing more paper than there was gold to back it.
The Fed issued too much money during the Great Depression?