

Hedge fund billionaire Paul Singer is pretty clueless about economics (Remy Steinegger/WEF)

Never underestimate the ingenuity of inflation truthers. Every time it seems like they've hit rock bottom intellectually, they manage to come up with new and even more ridiculous reasons for why inflation is supposedly higher than the official numbers say it is.

But, of course, like any conspiracy theory, it all starts off sounding plausible enough. First, they say the government understates inflation when it adjusts for the quality of goods and how people substitute for similar but cheaper ones. The only problem is that independent measures, like MIT's Billion Prices Project, have shown inflation is pretty much what the government says it is (although there's been a very slight difference the past few months). Then they point out that some prices are increasing more than the weighted average of all prices, as if this proves there's some kind of subterfuge going on. But that's just how averages work.

Which brings us to Paul Singer. He's the hedge fund billionaire who's made a small part of his fortune buying bonds from countries on the edge of default, and then suing them to get paid in full.* (This hasn't worked quite as well with Argentina). Well, it turns out that he has some very idiosyncratic ideas about what inflation actually looks like. His latest investor letter recycles all these ideas, inveighing against the Fed's "fake prices," "fake money," and "fake jobs," before zeroing in on where inflation is really showing up — his wallet:

Check out London, Manhattan, Aspen and East Hampton real estate prices, as well as high-end art prices, to see what the leading edge of hyperinflation could look like.

That's right: Paul Singer thinks Weimar-style inflation might be coming because he has to pay more for his posh vacation homes and art pieces.

Now, it's true, if you're a billionaire who's interested in decorating your high-end real estate with high-end art, then, yes, your personal inflation rate is higher than others. But tough luck. (I'm pretty sure you'll manage). The Fed, you see, isn't worried about the Billionaire Price Index. It's worried about inflation on goods and services we all face. And that, despite zero interest rates, is still below the Fed's 2 percent target. That's not going to change anytime soon, either. Indeed, just because the super-rich are bidding up the prices of houses in the Hamptons doesn't mean that middle-class people, whose wages are flat, are going to bid up the price of, well, anything.

It's also irrelevant that banks are sitting on piles of reserves, Scrooge McDuck-style, right now. Japan in the 2000s and the U.S. in the 1930s show that inflation will stay low despite all this excess money. It just doesn't matter as long as people don't want to borrow.

If this is the best the inflation truthers can do, they should probably follow Mark Twain's advice and keep their mouths shut for now. Somehow I don't think Janet Yellen is losing sleep over what people are paying for Picassos.

*Correction: Most of Singer's fortune has not come from so-called "vulture funds" that invest in distressed sovereign debt. Such funds only make up 2 percent of his company's assets under management today.