Deflations hurts - people with business loans people with home loans people trying to get business loans people trying to get home loans Deflation helps - wealthy people This should be common sense, but it apparently isn't. Think of it this way. If I've got half of all the money in the U.S. stuffed in my mattress, and the money supply contracts, I've still got the same amount of money - but you all out in the world struggling to get by needing lines of credit to start a new business or keep one running -will have less of it. Making it harder for you. and easier for me.