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In Pope Francis' recent interview, he says:

Thinking with the church, therefore, is my way of being a part of this people. And all the faithful, considered as a whole, are infallible in matters of belief, and the people display this infallibilitas in credendo, this infallibility in believing, through a supernatural sense of the faith of all the people walking together. This is what I understand today as the ‘thinking with the church’ of which St. Ignatius speaks. When the dialogue among the people and the bishops and the pope goes down this road and is genuine, then it is assisted by the Holy Spirit. So this thinking with the church does not concern theologians only. ... This is how it is with Mary: If you want to know who she is, you ask theologians; if you want to know how to love her, you have to ask the people.

He even goes on to explain it a little bit, saying:

and, of course, we must be very careful not to think that this infallibilitas of all the faithful I am talking about in the light of Vatican II is a form of populism. No; it is the experience of ‘holy mother the hierarchical church,’ as St. Ignatius called it, the church as the people of God, pastors and people together. The church is the totality of God’s people.

Thing is (and I almost hate to admit this), but I've never heard of that before. "People Infallibility", if you will, seems rather novel. (And yes, I get that its not really that, but I can see it being misinterpreted as such). Is this a new term, or one that I just missed out on being of from the heretic arm of the church? :)

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This doctrine is taught in The Dogmatic Constitution of the Church of the Second Vatican Council, paragraph #12 as follows:

"The holy people of God shares also in Christ's prophetic office; it spreads abroad a living witness to Him, especially by means of a life of faith and charity and by offering to God a sacrifice of praise, the tribute of lips which give praise to His name.(110) The entire body of the faithful, anointed as they are by the Holy One,(111) cannot err in matters of belief. They manifest this special property by means of the whole peoples' supernatural discernment in matters of faith when "from the Bishops down to the last of the lay faithful" (8*) they show universal agreement in matters of faith and morals. That discernment in matters of faith is aroused and sustained by the Spirit of truth. It is exercised under the guidance of the sacred teaching authority, in faithful and respectful obedience to which the people of God accepts that which is not just the word of men but truly the word of God.(112) Through it, the people of God adheres unwaveringly to the faith given once and for all to the saints,(113) penetrates it more deeply with right thinking, and applies it more fully in its life."

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Welcome to the site! This next has nothing to do with the quality of your answer (which was very good, by the way), it's just standard to help new visitors avoid misunderstanding the site (as I did at first.) As a new visitor, I'd recommend checking out the following two posts, which are meant to help newcomers "learn the ropes": the help page and How we are different than other sites? –  David Stratton Dec 4 '13 at 0:15
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I believe it to be the reason that faithful Catholics like myself can even attempt to answer questions like this!

If we do this

Always to be ready to obey with mind and heart, setting aside all judgement of one's own, the true spouse of Jesus Christ, our holy mother, our infallible and orthodox mistress, the Catholic Church, whose authority is exercised over us by the hierarchy.

then we can do this:

...uphold especially all the precepts of the Church, and not censure them in any manner; but, on the contrary, to defend them promptly, with reasons drawn from all sources, against those who criticize them.

St. Ignatius Loyola - Rules for Thinking with the Church

I asked a priest when I got really into this website whether or not it was a decent thing for a lay Catholic to do, especially with regards what would seem to be Biblical interpretation. He said to always say "I think" or "It is my interpretation that" and not project my personal and inept interpretations of scripture or tradition on the Church. So, I don't believe there is any pretext for saying that the whims of "a faithful" is infallible.

But, as Chesterton pointed out in Orthodoxy somewhere as well as The Ball and the Cross and innumerable essays. The people in the middle ages who wrote books were the nutty savants, the sane men plowed fields and the sane women reared children. Sanity, by virtue of the Natural Law which God instituted and gave to all mankind must be infallible.

So, when the common Christian believed in the the Assumption of Our Lady, lots of Bible alone people and common materialists doubted it could be true, but

the entire community of the faithful can not err in matters of belief (infallibilitas in credendo) Pope Pius XII enlisted this in 1950, for the definition of the dogma of the Assumption.

http://www.dizionarioesoterico.com/definizione-significato/infallibilita_92665.html (translated from Italian)

And therefore, a dogma which was true for about 1900 years because men and women believed it, is still true today, when the pope elevates the doctrine.

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Aha. I was just writing something to the effect of your last couple of paragraphs... –  Andrew Leach Sep 24 '13 at 12:45
    
Heh, yeah I re-read my original answer and realized I forgot to address the question. –  Peter Turner Sep 24 '13 at 12:47
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