The fallacy here is that money (dollars) is (at least in theory) backed by something of value. In the economy presented in the article, the only thing of value is the land, which is of infinite worth, because there's nothing else to buy. By definition, it's worth however many dollars there are, so as the economy goes through the normal inflation process, the land increases in value without bound.
Break the spell by thinking of it this way: if there were two pieces of land, they would increase in resale value at the same rate. If there was a piece of land and a truck, they would increase in value at the same rate. We're looking at inflation here, not a bubble.
In the real world, currency is backed by assets (even if those assets are only a promise to pay). It doesn't make any sense to talk about dollars independent of their backing.
