It’s one of those vicious cycles - it’s really hard to stop once it starts.
Also, bear in mind that China’s recent economic growth has been mainly internal consumer driven (external infrastructure investments have slowed down noticeably as belts are tightened) so while they aren’t as fucked as America would be they could see a dramatic rapid decline.
There’s also the fact that debts increase in relative value over time, therefore discouraging people taking out loans for various purposes (mortgages, starting businesses, etc.), which was a major reason for the protests against the gold standard in the US around the late 1800s - see the Cross of Gold speech.
I think the usual issue with deflation that people will wait for prices to keep going down and therefore keep buying less which feeds the deflation.
It’s one of those vicious cycles - it’s really hard to stop once it starts.
Also, bear in mind that China’s recent economic growth has been mainly internal consumer driven (external infrastructure investments have slowed down noticeably as belts are tightened) so while they aren’t as fucked as America would be they could see a dramatic rapid decline.
There’s also the fact that debts increase in relative value over time, therefore discouraging people taking out loans for various purposes (mortgages, starting businesses, etc.), which was a major reason for the protests against the gold standard in the US around the late 1800s - see the Cross of Gold speech.