This will only work if your characters are not yet equipped with armor. This is very simple, all you need to do is buy just one armor for the character you want this to work for and make sure he has no other armor equipped. Once you have bought the armor of your choice save your game, then equip the armor and then load your game. You will notice that your characters defense stays the same as if he has still got the armor equipped but he has not, then simply repeat the process and there you have it, infinite defense increase.
Defeating the white dragon
When fighting the white dragon after defeating Brimhild, try to stay out of its meteor attack range. The dragon does not move. Stay just outside it or it will probably knock out whichever character it hits. It can knock out more than one person. Line Ylenne up on a straight line with the dragon. Then, use Ylenne's Hell Fire attack. It should have the range to hit the dragon if you are just outside the meteor attack. Use the other characters to restore her MP so she can use Hell Fire repeatedly. For this strategy to work, you need lots of Magic Potions and Grilled Eels (30 each recommended if she is over level 20). If done correctly, the dragon should not kill anyone after you learn the meteor attack range.