[abernard1]

> I'm no economist, but inflation should reflect an increse in growth and productivity.

An increase in growth and productivity should reflect deflation: more goods and services with the same amount of currency. Absent intervention, inflation simply does not happen as a long-term secular trend in a growing economy.

As mentioned in another thread, pre-modern US had growth rates higher than the modern US (~4%) with an immaterially changed CPI over a ~130 year period. This was with two punctuated sessions of central banks and wars which issued debt notes (currency).

In addition: it should be noted that Japan has had a deflationary currency for 30 years and is an economic dynamo. The only problematic aspect of that—which can be seen in the BOJ's recent ill-fated attempt to increase the interest rate—is it makes government debt (and all debt) harder to pay back. However the point remains: deflation has had an immaterial effect on standard of living.