Will deflation bring peace to the world?

Last week the Swiss National Bank discontinued the Swiss Franc's currency peg with the Euro without any warning. When the crisis in Greece became evident in 2009 the Euro became weak and fund managers started buying the Swiss Franc as a safe haven. This pushed up the value of the Franc and made exports too expensive so in 2011 the SNB determined to maintain the value of the Franc at 1.20 to the Euro by buying Euros from the market. So far they have spent $199 billion in suppressing the rate of the Franc. However, accumulating loads of Euros meant mounting losses as the Euro kept getting weaker. Meanwhile, the European Central Bank has almost finalised a plan of Quantitative Easing by buying European government bonds worth $635 billion in an effort to release more funds into banks to force them to lend more to businesses, which is what the Federal Reserve did in the US. Inflation in Europe is down to 0.2% and while we in India are cheering the fall in the price of oil the same fall is adding to the risk of deflation in Europe. Bond buying will release a flood of Euros and drive down its price even further making it too expensive for the Swiss to defend the currency peg. So they gave up. Those who have borrowed in Swiss Francs suffered big losses while Indians, who have black money in Swiss banks, will be celebrating. Will QE work? No one knows. Japan started its own QE in 2013 when the new Governor of the Bank of Japan promised to double money supply by buying government bonds worth $1.4 trillion. But instead of lending more to businesses banks just sit on their cash or invest in shares, which is one reason why stock markets all over the world are booming. Japan seems to be stuck in a liquidity trap. Last year China grew by 7.4% which is the slowest in 24 years. China may be forced to devalue the Yuan this year to and try to stimulate growth by making exports cheaper. So what of India? The IMF is predicting that India will grow faster than China in 2016. As China slows its demand for commodities will fall, resulting in a fall in commodity prices, which will help our Prime Minister's efforts to increase our manufacturing. The Reserve Bank reduced interest rate by 0.25% a few days back, which should increase consumer spending and encourage businesses to invest more. Foreign investors are buying Indian stocks and debt, bringing in large amounts of foreign exchange into India. Not much point in increasing manufacturing if our goods become too expensive because of a stronger rupee. So what will the RBI do? What if the US resorts to another bout of QE, bringing down the value of the dollar? Hyperinflation in Germany resulted in Hitler coming to power, what happens if the entire world falls into deflation? In a deflation people stop consuming as they wait for prices to fall even further so we may all turn into monks and there will be peace. We hope.