Instead if you look at what Nexus is saying (I hope I am staying on the mark here) the easiest way to reduce inflation in UO is to introduce more tangible value into the economy. That means more goods to be bought and sold. Ideally, I would think that UO players would want goods manufactured by players rather than more loot stuff. Goods manufactured by players could theoretically be introduced into the economy more quickly assuming the resources needed to manufacture such goods were available.
You pretty much got it, except one catch, the items people really want, can't be created by players, equivalent items can't even be created through imbuing. Now I understand the concept of rarity for Artifacts, I do, but when demand out paces supply by such a gross amount inflation occurs. Some artifacts have become the center piece for everyone's equipment outside crafters, and non-combatants.
Some examples.
Powerscrolls - Every Fel spawn should drop at least 1, 120 scroll, this would greatly help. It makes it less of a crap shoot, too often people get a bunch of 110's or mix of 110's and 115's. With the number of potential scrolls available it keeps prices on 120's High, and 120 skill is often a necessity as monsters have gotten tougher and Templates have gotten more specialized. Having at least 1 per spawn drop guaranteed would do a lot to deflate prices on Scrolls.
Crimmies - Less than 5% drop rate is what I heard, the problem with these is two fold. For everyday PvM players they are hard to get, for PvP players they are very desirable, and it's shameful that those that PvP and don't want to engage in factions have to compete with folks that have a vending machine for them. In short now Crimmies aren't rare, just ones that anyone can use. If they dropped 8% of the time vs less than 5% I think we'd see the value deflating.
Slither - another desirable item, they sell on some shards for over 50mil because of rarity, I know in the past 20 Medusa runs I've done solo I've gotten 2 stone dragon's tooth, and a Ironwood bow, and 3 of the staffs. 6 drops out of 20 runs and none were the rare one which is fine, but 6 drops in 20 runs, where being entitled based on damage wasn't a factor, seems to me she's a bit stingy all the way around. Though this could be my horrid luck with RNG, but considering how rare it is I see one for sale I don't think so.
Tangle - See the Crimmy though it's drop rate isn't near as bad.
Now I'm not complaining just about items I want, at one point or another excluding the Tangle I've obtained every item I mentioned through normal game play at least once, but it's the infrequency these items appear that yields the absurd prices in combination to it's desirability.
Players can't make imbued half aprons, players can't make Tali's, we can't make glasses. There is a broad avenue of what we can and can't make as players, and there are good reasons for some of it. But if stand in the middle of that street, between the affordable commodities, and those that have extremely high prices, the line is drawn between Rare Drops, and Everything else.
The Enchanted Kelp Woven Leggings are a prime example, they aren't rare by any means. On Chessy I can pick them up for 40k-45k a pair all day, yet they are probably the single most underrated item for use in Suit building in the game at this moment. Even looking at the insurance costs of 800gp a death tells you they pack a lot of mods into one piece of equipment. They are cheap because they are very obtainable.