The Ripple wiki says (emphasis added):
If the reference transaction should cost 10 millionths of a ripple, the "base fee" should be set to 10. This is the current value. This makes it very simple to adjust fees to keep them sensible -- just figure out how many millionths of a Ripple the reference transaction should cost and set that as the base fee.
Yes, and how does the system figure out what a reference transaction would cost?
It would be great to know how the transaction fee is determined and how it is adjusted in response to deflation (rising value of XRP or falling supply of the units).