I also have a deflationary bias, but not because of the reasons proposed in the article. To me, the last 40 years of declining inflation can more easily explained by demographic and economic changes which slow the velocity of money.
As the US population becomes older, on average, there is increasing pressure to save rather than spend. Old folks cannot obtain as much perceived utility from newfangled gadgets and fashions as young people, and they also face the risk of running out of money when they cannot earn more. So they are spending-averse. This is reflected in the past 40y of falling inflation and interest rates.
https://www.urban.org/policy-centers/cross-center-initiatives/program-retirement-policy/projects/data-warehouse/what-future-holds/us-population-agingSecond, as wealth inequality increases, much of the increase in the monetary base has accumulated in the hands of wealthy people who are less prone to spend it. As the wealthy accumulate more and more cash, that cash is essentially sucked out of economy as if it didn't exist. That is, if it is not used in day-to-day transactions, it does not affect prices, supply, or demand for the items counted in CPI or PPI.
Third, a similar process occurs as actors outside the US choose to transact in USD. To do so, they (on net) must sell something to somebody in the US, take the dollars abroad, and either hold the dollars or transact the dollars for things like labor outside of the US. The net result is the same, the dollars disappear from US circulation and there is little or no change to supply, demand, or prices in the US. As economies expand outside the US in sectors where USD are used to transact, the need for dollars increases and so more dollars are shipped offshore.
There, a simple explanation that doesn't rely on day-to-day news, obfuscation of factors, conspiracy theories, or whatnot. Boring, isn't it.
