Deflation strengthens the US dollar. Less dollars in the money supply mean that each dollar is worth more.
I was referring to the international exchange rate.
The Dollar falls in value relative to other currencies. If they are losing value, foreigners won't buy our debt. Which could be catastrophic.
Also as the value of that exchange Dollar loses value commodities become so much more expansive and you find that your Dollar buys much less gasoline, for one example.
Also there would not be less Dollars in the money supply.
If there is deflation, the Fed has to do everything in its power to inflate and it does that my increasing the money supply.
As I said, the total results are the worst of all possible worlds.