I've never heard of its doing so. That was approximately half of my point (#1 in the above). If you think I was suggesting it's a thing anyone should be worrying about, then I respectfully advise you to read what I wrote again. If you merely think I should have been more forceful about how unlikely such an event is, you may be right. [...] Ability to procure things I value. If my bank account stays exactly as it is and prices of food and books and computers and other things I spend money on halves, then the portion of my wealth embodied in my bank account has effectively doubled. If the prices of those other things double instead, then the portion of my wealth embodied in my bank account has effectively halved. Of course in practice different things' prices change in different ways. And in practice the relationship between money and those other things I care about stays pretty stable, which is one reason why Thomas's analysis is highly misleading. And in practice I care about future prices at least as much as about present prices (but present prices are pretty much our best estimates of future prices, at least for well traded assets). So measuring wealth in money works very well in principle. But Thomas was (in effect) envisaging a weird situation in which the value of money relative to everything else increases abruptly, and although it's very unlikely ever to happen it seemed worth pointing out some actual likely consequences. [EDITED to add: This is currently at -1. I honestly have no idea why that might be. Anyone -- preferably whoever actually downvoted me -- want to explain?]

The closest direct analog is a crash--if I go from being able to buy one share for one dollar to being able to sell my one share for one penny, one can see this as the value of cash going up 100X. (This is somewhat contrived when dealing with cash, but it does seem that the foundational level of wealth is food and ammunition. It could happen that the exchange rate between those and cash and stocks skyrockets, and that would be Bad News for a lot of reasons.) Indirect analogs rely on opportunity cost--because you invested in A and got a 2X return, you missed out on investing in B, where you would have gotten a 2000X return. This is a profoundly unhealthy way to view markets.