[raiflip]

That article is pretty bad. Even at this point in the article it is clear he does not understand why a small amount of inflation is good. For example he says:

"According to popular thinking, in response to a high rate of inflation, consumers will speed up their expenditure on goods at present, which should boost economic growth.

So why then is a rate of inflation of 10% or higher regarded by experts as a bad thing?"

According to this line of thinking if a little bit of something is good, then more of it should be good, right? I think we can all see the faultiness in this logic. What he doesn't get is after inflation reaches a certain point, people start expecting their money to be not worth as much in the very short term, leading to increase in buying, leading to higher inflation, and so on. This spiral is how economies like Zimbabwe end up with crazy inflation. However at a low rate, around 2% and a little higher, people do not immediately expect their money to be worth less in the short term, and therefore the economy does not enter this spiral.

The rest of the article goes into some decently complex economics. Suffice to say his core argument - that inflation hurts wealth creators because it decreases the value of said wealth- does not hold water unless said wealth creators are putting all their money in places with interest rates less than inflation. This means no investment in their or a business, but just parking the money in a bank. Anybody with that kind of money will know to put large amounts of money in inflation-protecting assets. Because risk of an investment is generally the amount of interest you get above and beyond inflation, parking money in assets growing at the rate of inflation is generally very safe.