Posted by Alister Bull

Highly regarded Federal Reserve historian Allan Meltzer has some sharp words for journalists calling for his views on whether the United States is heading for a Japan-style bout of deflation.

“The last time somebody asked me that question it must have been the fifteenth time that I’d heard it, and I said that it must be the most stupid question I’ve heard in 40 years of dealing with the press,” he told the Cato Institute during its annual monetary policy conference this week.

“It is time that the people talking about deflation go back to school and learned about the difference between maintained rates of change and one-time changes in level,” he lectured the high-powered audience of economists, which included Fed Vice Chairman Donald Kohn and Richmond Fed President Jeffrey Lacker.

Kohn had earlier said that he didn’t see a big deflation risk. Lacker made similar remarks on Friday.

Why all the deflation talk all of a sudden? It didn’t help that U.S. consumer prices tumbled in October. Or that the newest Nobel prize-winning economist, Paul Krugman, used the “D” word in Friday’s New York Times.