[Gibbon1]

Well it's not just one sentence. One of the problems with deflation is debt payments. And the value of labor, assets and prices.

Lets say a store has $50,000 worth of inventory bought on revolving credit. In normal times, $50k worth of inventory might sell for $100k. The $50 worth of gross margin goes to pay, labor costs, rent, and the owners take. Lets say due to deflation that 50k is now only going to sell for $90k, the business is short $10k. What's the owner going to do?

Go out out business that's what.

So the problem with deflation is it tends to rape the books of perfectly well run businesses. And then you get cascading failure. The mill has a cash flow problem, goes bankrupt, and then half the business in town close.

A most subtle problem is a lot of businesses really run on credit backed by pledged collateral. The chain of collateral forms what called a credit chain. When you have deflation and a demand slump the assessed value of the collateral becomes suspect. Credit chains shorten and collapse. And businesses can't get liquidity. And then fail.

It goes on and on.