Inflation Remains a Non-Issue

Many Americans assume that inflation is rising. They fear that the recent increase in commodity prices will lead to higher finished goods producer prices and then higher consumer prices. This fear is intensified because people tend to notice when prices go up for products they buy most often.

As economist A. Gary Shilling points out in a recent commentary, such “widespread fears of inflation are understandable. Historically, inflation is a wartime phenomenon when government spending is huge, while deflation reigns in peacetime. .....