Monetary Inflation and Deflation may not be a two-way street. I'm thinking it may be more like a ratchet. Seeking confirmation from the community on this idea.
-We know that 10% reserve requirement fractional reserve lending would take a 10 dollar deposit, loan out 9 dollars, deposit 9 dollars, loan out 8 dollars, etc until the 10 dollars had turned into something like 79 dollars.
-The way that deflation occurs is for people to pay back loans, thus causing the destruction of money.
The idea I came up with tonight however is, when you pay back a loan, you're not necessarily destroying the money created during the original loan. You're likely only killing one of its child-loans (not the 9 dollar loan, but maybe the 5 or the 4 that occurred later on down the chain).
Therefor, once the money is created, it may be like a genie being let out of the bottle, it cannot ever be fully recontained. Is my logic sound or have I overlooked something? Monetary expertise requested from fellow turdites.