Inflation: The Unspeakable Crisis

Michael Kinsley at the Atlantic is worried that more people aren't worried about inflation, and is sharp on what sucks about it:

A stable currency is firm ground on which you can build a life. Inflation turns life into Through the Looking-Glass: you have to run faster and faster to stay in the same place. Saving is for suckers, and money needs to be spent sooner rather than later. Planning even a year or two ahead becomes nearly impossible.

….if we are doomed to repeat this particular bit of the recent past [our last scary bout of double digit inflation in the late 70s], the press has failed in its self-imposed obligation to be the "first draft of history."

According to the considerable discussion of inflation on the Web, my alarm is misguided. Every economist I admire, from Paul Krugman and Larry Summers on down, is convinced that inflation will remain low for as long as we can predict…..  Krugman has charged that inflation fearmongering is a nefarious Republican plot….. 

This time, inflation will be a lot harder to stop before it turns into hyperinflation. Whether Obama navigates these shoals successfully will be a big factor in his historic reputation. And journalists will be kicking themselves (and other people will be kicking journalists) for missing a disaster story on the level of Hurricane Katrina, if not 9/11 itself.

In short, I can't help feeling that the gold bugs are right. No, I'm not stashing gold bars under my bed. But that's only because I lack the courage of my convictions.

That final zinger hurts. Those with reasonable doubts as to the stability of this whole freakin' system are in the unenviable position of, if struggling to be "prudent," making lots of big decisions that are going to seem really short-sighted, depending on whether or not things go seriously awry. That is, going gold will make you either King of the World or the nuttiest of chumps. Well, that's what hedging is all about, I suppose, but most hedging is done within the ol' dominant paradigm. Gold seems more like a "all bets are off" bet.

Inflation is a looming crisis we at Reason have not been ignoring: see lots of examples.