Like co-blogger Bryan, I am much less pessimistic about inflation than Bob Murphy is. I think inflation will rise, but there's a lot of room between its current level and 10%. Also, I'm less optimistic about inflation long-term than Bryan is. So here's the bet that Bob and I have agreed on:
At any point between now and January 2013, if there is a year/year increase in seasonally adjusted CPI that is at least 10%, then I pay Bob at that time $500.
If we get to January 2013, and there has not been any 12-month stretch in which the above happened, then Bob pays me $500 at that time.
We will use the standard CPI, not the nonsense CPI excluding food and energy.