Overall, I like this post. Solid reasoning.

This part I have small nitpick about:

    > Also, the deflationary effects of high interest rates are not because it causes unemployment, but because it reduced the rate of increase of the money supply.

I would prefer to say: reduced money supply has an indirect effect upon unemployment. If it costs more to borrow money, corps will expand slower (fewer new jobs), or reduce costs (labour) to increase profits.