... because of the relatively fixed money supply and the deflation problems that caused. ...
I see this claim occasionally, but I don't understand it. What exactly are the deflation problems that a fixed money supply has caused? Some economists (Bernanke, for example) believe that any deflation is worse than high inflation. I would like to understand the reasoning behind this belief. Some claim that even low deflation leads to hyper-deflation, but history has shown this to be false.