Are There Different Types of Inflation? US Money Reserve Explains

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There are many reasons for prices going up. Some are due to weather catastrophes, supply chain issues or higher input costs. Are there different types of inflation?

 

When your prices go up, this is usually just called inflation. The economists will also break inflation down into smaller parts, each with a more specific appellation. Learn about the different types of inflation from the US Money Reserve.

 

Core Inflation

 

For most people, inflation is simply how much more they spend on their grocery bill compared to last year. The Bureau of Labor Statistics (BLS) has created something called the Consumer Price Index (CPI). This is a basket of goods, which best represents what the average American spends, each month.

 

The term, “Headline Inflation” is the “raw inflation figure,” according to Investopedia. This includes food and fuel. Economists will use this to gauge the overall impact of inflation on American pocket books.

 

Inflation figures have been kept for years and economists want to be able to compare the statistics with one another, over time. Therefore, economists have tried to remove extraneous factors that might cause dramatic rises or falls in the inflation number. Therefore, they created another statistic, called “Core Inflation,” which has energy and food removed.

 

Food and energy prices are much more volatile than other goods. Of course, consumers still need to buy food and energy, so they might experience more dramatic price changes than the government records.

 

Price Inflation

 

The term, “Price Inflation” is what you experience at the store and will be measured over a period of time. There is another element to inflation that is hidden, but the government will secretly admit. That is the supply of money.

 

The ideal economy will create money reflecting its productivity, each year. Unfortunately, the US economy does not work that way. Especially since 2008, the Federal Reserve has been printing more money, calling it “Quantitative Easing.”

 

Quantitative refers to “great amounts” and Easing is a “way to make something better.” What exactly is the Fed making better? The very fact that it uses this term suggests that it is trying to fix something by printing large amounts of fiat currency.

 

Precious Metal Inflation Hedge

 

There are different camps in economics and some believe that inflation is partially caused by governments printing money. By the US governments own admission, they are increasing the money supply. If they increase it by more than productivity increases, then that could cause inflation.

 

So, what can you do to protect yourself against these price increases? The US Money Reserve sells precious metals as a hedge against inflation. As the Fed prints more money, it should also lead to the increase in the price of gold and silver.

 

When you hear about inflation, you might want to investigate into the exact cause. Different types of inflation are caused by different factors. This helps you properly adjust your budget. You can also adjust your wealth portfolio by purchasing US Money Reserve gold – the inflation hedge.