The US was the world’s power when it was the world’s largest exporter of oil and manufacturing center. Since the end of WWII, the US global output has declined from 50% to an estimated 20-22%. Dollars flow to sources of manufacturing, which now is the domain of China and India. The US economy has been rolling along with the aid of other countries purchasing US debt instruments to fund the current account deficit. Removal of this additional money and the US faces a sudden negative influx of capital. When this situation arises the US government has 2 choices:
Deflation, which would absolutely collapse the entire US economy to a functional level of less than 20% of the population.
Monetary inflation to cover the bills so that the economy hobbles along.
The important item to remember is that ALL global economies are linked and any country that expands its own currency will automatically cause monetary expansion of any country it does trade with. China has nearly 1 trillion US dollars in its reserve, but what if they lost 1 trillion with internal loans to cancel their reserves? They simply print a trillion of their own currency and buy more US debt. This perpetuates the cycle in which we exist, so until the consumer goes into the bunker, this facade will continue.
Once the consumer retreats and the bad loans begin to hit the banks, governments will have to bail out a multitude of companies to keep the economy running. Remember that if the debt is mopped up with mad money, then it matches and raises any money that evaporated, hence inflation. On this basis, it is nearly impossible to consider any form of deflation until the inflationary cycle is over.
War cycles are always inflationary and countries tend to go off of gold standards to ensure supplies and oil are not limiting to try and ensure victory. This has been the case for many currencies of the past 200 years and will continue into the future. Interestingly, Portugal, England, Spain and France during the 1500's to the 1700's were able to grow their economies by stealing gold from the South American countries during their global conquest phases. Their gold was basically free, which was able to feed their fleets and government purchases etc. With the abolishment of slavery and loss of control of the "New World" from feuds with other European countries and the locals, this form of a gold-backed currency system for funding wars and growth no longer exists. Stealing from other countries for nothing was a form of printing money except it came from the ground and went to European banks with no purchase of cash required. Today, instead of robbing countries of gold and silver, banks print money to allow credit expansion for citizens to go into debt to have a household containing the latest gadgets. Money today is basically digital, a total 360 going from physical to money transferred electronically.
Any attempt to implement a purely digital economy never could and never will exist. People would return to bartering and ignore the electronic money system, which would negatively affect government revenues. This would collapse economies, so I would hazard a guess this system would never fully be implemented. Most transactions nowadays are electronic but there always is the basic need to transfer money between individuals. Another reason to own gold and silver: the government can not trace it.
As I stated earlier, the amount of money circulating in the globe is expanding and just because the US is going through hard times does not remove inflation from the global scene. The scenario of an inflationary depression is what I would expect and is worse than a deflationary depression. During an inflationary depression the price of food and goods rises above many households’ range of affordability.
In the end, there will be a deflationary collapse following the current period of inflation and it will be due to a zero velocity of money compounded with plummeting manufacturing output. At this point in the future, owning cash and bullion will be important.
I don't know anything about David Petch's politics. But the explanation in Diatribes of Deflationists: Why They Are Still Wrong Pt. 2 comes across as a reasonable explanation of how an inflationary depression could happen.