Deflation generally occurs when the supply of goods rises faster than the supply of money, which is consistent with these factors, the supply of money goes down, the supply of other goods goes up, demand for money goes up and finally demand for other goods goes down.
Economists generally believe that deflation is a problem in a modern economy because it increases the real value of debt, and may aggravate recessions and lead to a deflationary spiral. To be true, deflation is one of the most scariest part in the Economic sections.