The elites are peddling the danger of deflation as job losses to disguise their real fears...
The part the elites fear most about deflation is debt defaults. The whole stinking system runs on debt when times good for the rich, but the whole thing falls apart as the interest rates pass zero on the down. The rich need interest to keep getting richer, they fear folks just walking away enmasse middle finger aloft. From China to Europe the bastard bankers drone on about how deflation will result in falling prices that will turn into job losses. This is the basic neo-con propaganda line about anything that threatens their position and the biggest scare tactic going.
University of Chicago finance prof John Cochrane argues that sharp, sudden deflation might well cause trouble. But a gentle, anticipated deflation, probably not. Cochrane reminds folks that from 1870 to 1900, Canada had zero inflation — and spectacular growth.
The real world isn't a simple yes/no sorta place, just as during mild inflation some prices go up, some come down [housing vs. computers] the same is true during mild deflation BUT the focus shifts as to what gets demanded. The prices that go down the steepest will be those on needless crap as that's where demand can most easily/comfortably be eliminated by individuals. Afterall who really needs a 6th cashmere sweater or a second Hummer, so the Hummer and other needless crap industries will suffer.
The prices of and demand for bread, beans and potatoes certainly won't suffer. The demand for real stuff will increase. Jobs will be lost in useless sectors during mild deflation. i'll be first in line to re-train them into the sectors where jobs will be 'growing' [hands on organic ag.]. Mild deflation could turn the head of our galloping consumer economy enough to establish a permaculture way of life that empowers us to take responsibility for our own welfare, provides endless opportunities for creativity and innovation, and connects us to nature and community in ways that makes sense of the world around us.
Mild Deflation, far from the phantom boogeyman of the establishment money merchants, will end up being exactly the slow-motion slide to gradual degrowth, to a change in production to a more localized, hand-built, labor intensive world economy. Deflation could move the our agricultural system from intensly insane to organic and sequester GHGs - externalized costs of capitalism. What the banksters deceptively refer to as a phantom menace is nothing but common sense because there are no profits, no good jobs, no dreams for your children on a dead planet.