Breaking down the inflation/deflation debate

I find it rather intriguing that so many people argue their points for inflation/deflation solely on two points, credit contraction, or money printing. Few people have even mentioned supply of goods as a cause of inflation, and no one, at least that I have read over the last year and half, has ever mentioned # of market participants (i.e. money velocity) or type of government as factors or how they change the outcome of such events.

In this piece I thought I would bring to you my ideas, not of what I think will happen, or how things play out, but rather factors that have gone unnoticed.

1) Supply of goods is just as important as supply of money. If you reduce the amount of goods or service within a fixed amount of money that is in exchange, the end result is relative to that of expanding the money supply. This could explain the deflationary event we see before extreme forms of inflation. During a Deflationary period, production and services are cut in order to limit capital loss, and central banks print up money to paper over the deflationary cycle thus creating inflation in the process.

2) The most perplexing issue is how different types of government effect the outcome of money velocity. The expansion of the money supply or the contraction of the credit supply is effected differently by which form of government we have because the form of government we have is parallel to the type of economy we have. The centralization of wealth is the key issue here. 

For instance, how would inflation effect a Oligarchy vs a Republic? Ultimately I think the end result is the same, however how it plays out or disseminates through the economy is different. Personally I believe more market participants creates less volatility and fewer market participants creates higher volatility in price evaluations etc. In a free market type society inflation would cause price increases across the board with some variation in price increases for different goods and services but the difference between the rate of inflation would be rather minimal. In an Oligarchy we should see extreme divergence between the inflation of prices to the point where some prices would be actually falling and other rising dramatically because the movement of money is in so few hands. What really bothers me is what happens when the government is the only market participant left?