The system does not work well going in reverse. It’s kind of a grow or die thing. Like sharks have to keep moving to live, the monetary system as to keep growing. After decades of inflation-dependent financial ‘innovations’, balance sheets would implode with deflation. Trillions of virtual wealth gone in the blink of an eye. Banks still have only recognized a fraction of their loses with the first round of deflation. A second would do them in. We lost 90% of the banks in the US during the first depression. Also, a self-reinforcing collective psychology comes along with it. People pull their money out of markets, don’t take on debt, etc… -exacerbating the negative effects. They treat deflation like a national security issue for a reason, because it kind of is.
Not that we can perpetually grow our debt loads ad infinitum, obviously. Because, that, at some point, has an endgame as well. But, I think, TPTB may believe it so. It’s hard to tell the degrees of delusion, economic-anosognosia and professional lying within officialdom, but you can be sure, they are all present.
