Doug Short at Advisor Persectives has an interesting look at historical inflation here:
The one chart that caught my eye was this one on inflation since 1872:
What caught my eye was how prevalent inflation was prior to 1940. Also curious to notice that during the roaring 20’s there was no inflation. During the 30’s there was a large bout of deflation, but it is arguable that deflation was a result of the great depression, not the cause.
I am not arguing that America should abandon the effort to foil deflation – unfortunately the biggest losers to deflation are those that carry debt. Deflation magnifies debt – and given the state of public and private debt deflation could result in disaster. So lets be clear – the rarely stated reason goverments around the world are so aggressively fighting deflation is because of the huge public and private debt in our economies. And the only realistic path to reducing that debt must be inflation.