The things that might upset your thesis is the decline in consumer confidence and the decline in wealth and income of retirees. If these follow through in an agressive way to personal expenditure then deflation, or at least a significant reduction in inflation, is likely to occur as less money chases the available output. In turn this will lead to reduced expenditure by business, both capital and revenue and the whole thing will feed on itself.
Required in these circumstances will be increased government expenditure to break the circuit and with an already budget deficit it will be harder than it otherwise might have been.
