Price is a ratio. So, say the price of shoelaces can rise when the shoelace production net expands, or the shoelace materials flow slows. But when the bankers flow of deposits slow, that is monetary deflation, and causes the price of shoelaces to drop. Price is a ratio and causes me constant confusion about who is deflating and how is that different from contracting.
Deflation: The Bankers network reduces flow of money/debt or bankers increase the depth of the investment network. Inventory of deposits dropping implies lowered bond prices and higher yields along the curve. The higher yields enforcing an increase in deposit inventories. (I still get confused about this)
Deflation means the yield curve has a correlated demand for more deposits and less loans. I say correlated because this is a sudden banker's surprise, hence unexpected.
Unless otherwise specified, I will talk in terms of contraction and expansion of distribution networks, and reductions and increases of inventory flows. If I want price effects, I can do that last.
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