I don't know if I'm wrong, but I think the main reason for the deflationary collapse is the process of money creation. Money is created through the process of lending by banks. But only the principle is the new money. Where does the money for the interest come from? Over the term of the loan, the borrower must always repay more money than the principle. The banks suck up the money via interest rates until it becomes scarce across the board because there is simply not enough to service both principle and interest. The music stops, a new bailout (bigger loans) for the well-behaved, inflation an bankruptcy for the public. A perpetual cycle until you change how money is created.