Deflation *always* happens to some degree, but its effects may be orders of magnitude less than whatever inflation is going on at the time. If we had deflation > inflation, the whole US debt-based ponzi scheme (aka currency) would collapse as all debts were being paid off. You have inflation to borrow money because money is printed to create new debt. You have deflation when the debt is paid back. The only way to sustain this scheme is to keep lending out a lot of money and lining the pocketbooks of the bankers. That "reserves ratio" isn't really a number for cash they have to keep on hand--it's actually a limitation on how much money they are allowed to create from nothing. We are hung by a noose by Big Money, and it's too late to save us.