but you do understand deflation correct? when many big companies file for bankruptcy those dollars are removed from the system... nobody gets paid and you file for "forgiveness" because you cannot repay...

in 2008 bankruptcies plastered the headlines as many banks filed for it... many of the big banks (too big to fail or we would have a whopper of deflation) recieved phony money from the fed to balance their holdings of terrible loans... (people who recieved loans that shouldnt have and knew they couldnt pay it back)

bankruptcies are still happening though they are continuously being off set by the MASSIVE money printing from the fed...

so the deflation risk is from the pressures of bad loans from people not being able to pay back their loans... if the people file for bankruptcy or they just dont pay, then, the banks file for bankruptcy as they cant "pay back" their federal loans...

hopefully this is understandable...

just like if certain things happened in agriculture... sign off on ethanol, crop insurance subsity is gone, record acres, and perfect weather for the next 4 years would send grain prices lower along with a stronger dollar if the fed decides to quit printing money...

and all of a sudden more farmers than we realise are under water... some of them in my area would be the fact that many farmers put up hog buildings and custom raise someone elses hogs... those big hog producers if things would turn wrong for too many years would upset alot of local farmers balance sheets...

if a bunch of people would file for bankruptcy at the same time money is taken from the system... the threat is real and WOULD happen if the fed did not lower the dollars value in order for people to make money to cover up ALL the bad loans....

and interest rates being low help as well to lower the cost of the loan...


to sum it up... if the fed really did their job then they would have never allowed the run up in the stock market like they did in the 90s... actually for hurtfull deflation to take place "feel good" inflation has to happen first... its more of a correction...