the first part is right, it all comes down to supply and demand. the rest of your post, however, is incorrect. unfortunately, i can’t explain it in any simpler terms than i already did without going into excruciating detail – there are books written on the interelationship between deficits, inflation and interest rates. at the risk of sounding didactic, if you really want to understand this stuff, i’d get a good grasp on econ 101 and 102 either by taking some classes or reading a few books. until you have the basics down, everything that flows from the basics won’t make much sense. just my two cents.