I also would like to hear rsync's answer. But I'll make a guess:
The (world) population is no longer growing (much). But productivity growth hasn't stopped. The result is that stuff gets cheaper, that is, the same number of dollars buys more. That's deflation.
Worse, we've gotten to the point where many people have what they need - not necessarily everything they want, but most of what they need. (I'm not going to buy twice as much food if my salary doubles. I'm not going to drive twice as many cars. I'm not going to buy a house that's twice as big. I'd use almost all the money to pay off debt and to invest.) That makes it hard to create inflation in the basic stuff, because you can't make demand exceed supply.
>The result is that stuff gets cheaper, that is, the same number of dollars buys more. That's deflation.
It's more about the number of dollars out there. Fractional reserve means that a dollar saved leads to dollars being created. Boomers saving up for retirement meant lots of dollars being created. Boomers withdrawing and buying stuff means lots of dollars will be destroyed. Fewer dollars means dollars become more valuable i.e. deflation.
The (world) population is no longer growing (much). But productivity growth hasn't stopped. The result is that stuff gets cheaper, that is, the same number of dollars buys more. That's deflation.
Worse, we've gotten to the point where many people have what they need - not necessarily everything they want, but most of what they need. (I'm not going to buy twice as much food if my salary doubles. I'm not going to drive twice as many cars. I'm not going to buy a house that's twice as big. I'd use almost all the money to pay off debt and to invest.) That makes it hard to create inflation in the basic stuff, because you can't make demand exceed supply.