Inflation

Inflation, at the very core, is the rate at which the price level in an economy increases. It can also be called the rate at which the purchasing power of individuals is falling: as prices increase, less and less can be bought with each dollar. There are many factors that can cause inflation to increase, but two of the major ones are excessive money supply and reckless government spending.

Inflation is not a problem if it is low; but, once it escalates, it causes severe economic problems. To control inflation, central banks use different tools such as interest rates. In the U.S., the Federal Reserve targets inflation rate in the U.S. economy to be between two percent and three percent.

The inflation figures in the U.S. are reported by the Bureau of Labor Statistics (BLS) each month, for the previous month.

Since the financial crisis of 2008 and 2009, inflation in the U.S. economy has been very low. In 2013, prices increased by 1.5%, which was well below the Federal Reserve’s target. But, over the past few years, the central bank has printed a significant amount of money to boost the economy. The money supply, as a result, has substantially increased. In addition to this, the U.S. government has also spent, continuing to incur budget deficits year-over-year. Going forward, this could mean soaring inflation.


Inflation is Rampant, Says Marc Faber Not only did inflation create a massive stock market bubble, but the coming hyperinflation will decimate the purchasing power of ordinary Americans. Paper money is bleeding value and investors will soon be clamouring for…

China’s currency devaluation is a confirmation that the world’s second-largest economy could be on the verge of an economic collapse. At least, that’s the opinion of renowned analyst Jim Rickards. “There’s no such thing as a one-time thing in currency wars,”…

Former Texas Republican Congressman and three-time Republican presidential nominee Ron Paul discusses the latest inflation numbers in June, as well as the likelihood of a rate hike. (Source: Inflation On The Rise, last accessed July 16, 2015.) In June, the…

The U.S. Bureau of Labor Statistics says inflation went up by 0.3% in June, solidifying market expectations that the Federal Reserve will raise interest rates this year. The BLS released its monthly Consumer Price Index report on Friday July 17th.…

Despite weak gold prices, excess money printed by the world’s central banks could ignite inflation, driving investors to safe haven assets. Policymakers have been using monetary policy as a form of stimulus in recent years, building a house of cards…

Peter Schiff believes a hyperinflationary environment caused by the Federal Reserve’s easy money policies will lead to gold prices going astronomically higher. (Source: Is Gold Heading to $13,000?, last accessed July 13, 2015.) After the financial crisis in 2008, the Federal…

Gold prices have plunged. But those that are holding the yellow metal needn’t worry. Soon, you might be able to buy gold for double, even triple today’s price. Let me explain. Monetary Crisis Central banks around the world have one…

In the first five months of the year, data from the Bureau of Labor Statistics (BLS) says that the U.S. economy had inflation of just 0.2%—that’s two-tenths of one percent. (Source: Bureau of Labor Statistics, last accessed June 18, 2015.)…

Inflation drives gold prices higher. If the general level of prices increases, the yellow metal rises. It’s that simple. Look at the chart below. It plots the price of gold (golden line) and the Consumer Price Index (CPI) (black line),…