Their motivating fear is the prospect of inflation.

In China, fear of inflation is unleashing large scale discontent.

Its nominal interest rates will rise as bondholders fear inflation.

Many now fear that these huge infusions of cash will make inflation inevitable.

Either choice could mean a higher future rate of inflation, just as financial markets fear.

Inflation fear was already present before the new challenges of 2011 raised questions about long term energy prices.

As concerns about deflation replaced fear of inflation, gold prices started to fall with the correction in commodity prices.

Rather, the fear is that central banks will not see inflation coming until it is too late, and that this will cause a major upward shift in inflation expectations.

We live in an age of simultaneous fear of inflation and deflation of unprecedented prosperity amid growing inequality and of technological advancement and resource depletion.

Moreover, many Socialists fear that excessive public spending may trigger inflation, and that their core constituencies will become its first victims.

But US presidents seek more than just a credible commitment to financial markets that the Fed chair will fear and fight inflation.

Some investors, at least, remember that rising inflation typically follows monetary expansion, and they fear that this time will be no different.

Foreign investors might therefore fear that future US administrations will be tempted to reduce the real value of that debt by allowing a higher inflation rate.

But the real fear is not inflation itself that is, that prices might rise at a surprisingly fast clip this year or next.

Gold prices rise sharply only in two situations when inflation is high and rising, gold becomes a hedge against inflation and when there is a risk of a near depression and investors fear for the security of their bank deposits, gold becomes a safe haven.

Fear of inflation, when viewed in the context of a possible global depression, is like worrying about getting the measles when one is in danger of getting the plague.

And core inflation measures show no sign of accelerating inflation either.

But now, in the wake of the financial crisis, a tide of distrust is sweeping the world including a new and widespread fear that central banks are incapable of controlling inflation.

In Germany, which suffered from hyper inflation in 1923, there is widespread fear that people will again lose their savings and need to start from scratch.

Inflation will soon be the last problem that central banks will fear, as renewed slack in goods, labor, real estate, and commodity markets feeds disinflationary pressures.

The Bogey of Inflation

With little wage inflation, high goods inflation is unlikely.

Inflation!

The Exaggerated Death of Inflation

The Inflation of Hugo Chávez

The Failure of Inflation Targeting

The Ghost of Inflation Future

The government might be tempted to rely on rapid inflation to try to reduce the real value of its debt. Fear of that strategy could cause investors to demand even higher real interest rates.

Forget Inflation

By contrast, inflation hawks argue that inflation must be attacked preemptively. While most central banks are inflation hawks, this stance is a matter of religion, not economic science.

And a higher debt America is one in which savers and lenders would have a justified greater fear that the government would resort to inflation in order to repudiate part of its outstanding debt.

It's a process of academic inflation.

On 17 April 2007, CPI inflation was reported at 3.1 (inflation of the Retail Prices Index was 4.8 ).

In other words, the low inflation era will become the lower inflation era.

Beyond Inflation Targets

The Inflation Puzzle

Rethinking Inflation Targeting

Asia s Inflation Trap

China s Inflation Muddle

Inflation or Deflation?

Is Inflation Returning?

Russia s Eternal Inflation

Moreover, the US government provides a very good inflation hedge in the form of Treasury Inflation Protected Securities (TIPS).

Of course, forecasting inflation is notoriously difficult.

Rates of exchange and inflation (increase 1,285,100)