Quote from tandh:
How can there be deflation when the money supply is being inflated?
Deflation = reduction of the money supply
Inflation = increase of the money supply
I know that in recent years the meanings have been changed in dictionaries, but the above are the true meanings of the words, and they still hold true today. When you increase a fiat money supply, the result is higher prices, and the opposite is true when you deflate.
But what people forget is that in a free market society with solid money, prices to come down, and that's a good thing not a bad thing.
It's a good thing to pay less for something rather than more.