Exactly, production can only decrease to a certain level (malinvestment will fail), real demand never disappear because of a deflative monetary policy, people are adaptive, they will save more but not stop spending. Imagine that you remove all the fiat money in circulation (maximum deflation), it will not crash the economy, people will immediately find other ways to do the trade, there are so many things can be used as currency
It will. You yourself recently explained to me the reasons why the U.S. economy had collapsed in the Great Depression (people lost their money when banks went bust), and this had been miles from "removing all the fiat money in circulation". Did people find ways to do the trade?
Money is the blood of the economy.
In my opinion, 1929 depression is caused by the fact that most of the people have been robbed off of their wealth long before the bubble burst. It does not matter if you find other ways to trade when you have already spent all your wealth in exchange for some useless paper. And without inflation monetary policy throughout the decade before 1929, such kind of thing would never happen
You say that most of the people had been robbed off of their wealth long before the bubble burst, but this alone would immediately cause the instantaneous collapse of the bubble (right after people had lost their wealth), since the bubble can only exist as long as new money is flowing in it, and in ever increasing amounts at that.