It's fine with me if you don't believe that inflation is happening.
Wait, didn't we both agree earlier in the thread that inflation
is happening, and that the Fed is deliberately pursuing it? I've acknowledged from the very beginning of the thread that we are in an inflationary period, so much so that I agree with your statement that leveraging my house is a wise financial play. So why are you now suggesting that I don't believe it exists?
I really feel like you're not being straight with me in this discussion if we can't even agree on what we've already agreed on!
though probably nothing is a better measure of inflation than the price of silver, gold, and currency exchange vs. the Swiss Franc
Why are those items better than measuring the things people actually need to buy in order to live? American families don't eat, live in, or drive to work in gold, silver, or Swiss francs. Looking at the dollar relative to those commodities is certainly a fair way of judging which of those two certain segments of the market think is a better thing to hold on to at any given time, but their prices are not measures of what it actually costs to live in the country, because they aren't goods that people use or need in any appreciable way. If you pick a few items out of a basket of millions of things people can buy, you're not measuring the price of anything other than those few items.
If you define inflation as "increasing the money supply" or "debasing the currency," then you can pretty much call anything we've done since we went off gold "inflation", in which case we just can't have a meaningful conversation, because you're using your own definition of the term, not the one economists use. If, however, we try to talk about it in rising prices as we've been doing here, we really do need to be precise about what prices we're measuring, and you showed a remarkable lack of precision in your numbers above, and seem to be latching on to items that we all know have skyrocketed in value against the dollar, while leaving out much more important things that have stayed much flatter.
Peanut butter prices just spiked like 30% because it was a bad peanut harvest. Do we say we're headed for 30% inflation? No, of course not. You need to look at things in aggregate, and when you do (whether it's the CPI number you claim is misleading, or the MIT index which looks at the price of nearly everything) you see somewhere between 2-4% for this year. In good times, that would be unacceptable, and a drag on our economy. Right now, it's the only thing that's keeping some people at work, feeding their families, and participating in our economy.
This "justification" is basically saying that when the banks lower their lending standards too far, thus assuming too much risk, we should bail them out by devaluing the currency rather than letting them go out of business as they should.
No, that's not what the author was saying at all. Read the last paragraph I quoted, which states that nothing about the fed targeting a nominal GDP number (which will implicitly target a moderate inflation number during economic downturns) prevents us from liquidating bad lenders when necessary. He elaborates on this in the following paragraphs, which I didn't quote above:
In fact, NGDP targeting, despite the stench of sugar-high money games that Austrians perceive in it, might actually increase our ability to impose losses on foolish creditors via default and bankruptcy. This would pay a huge moral dividend, in terms of our ability to avoid the unfairness of arbitrary bail-outs
...
if we had sufficiently aggressive monetary stabilization, we could avoid acquiescing to “emergency” rescues that flamboyantly reward bad actors, because allowing bad actors to collapse would no longer threaten the rest of us.
The argument being made is that having the Fed as the lender of last resort makes it an excellent check on the power of large banks, who can no longer claim that they're too big to fail. I wouldn't expect someone who fears government control of money the way you do to agree with the wisdom of this, but it certainly makes economic sense that once individual borrowers and businesses have somewhere else to go for emergency credit if their bank goes under, the moral case for bailing out those bad banks is significantly weaker, and we can limit the losses mostly to just the bank that goes into default or bankruptcy.
Inflation steals from people who have saved by reducing the value of their savings.
There might be a grain of truth to this statement if banks just kept peoples' money in vaults, but they also lend it out so that the money can do something productive in the economy, and inflation has a positive effect on one side of that transaction that you completely ignore when you focus exclusively on savings accounts. Simply saying the ones who make bad loans should fail doesn't address the problem of what happens when the losses cause a systemic shock to the economy. Given that we're not ever going back to gold or abandoning fractional-reserve banking, we need tools to deal with these things when they happen, and inflation is one such tool to balance the distribution of losses between creditors and debtors.
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