Will deflation be slow or fast?
Every time a bank lends money, it gets deposited into other banks, which re-lend those “new” deposits, producing a “multiplier effect” on the total value of bank deposits. Thanks to their belief in lenders of last resort, bankers have lent and re-lent about 97% of their deposits. When borrowers begin defaulting, the “multiplier effect” of will go into reverse. The potential reverse leverage in our banking system is an important precursor for a deflationary crash.