Inflation Prometheus Lionhart, M.D. Inflation Prometheus Lionhart, M.D.

Exploring the Ins and Outs of the Inflation Rate

Inflation is a key economic indicator that measures the rate at which the overall level of prices for goods and services is rising. It is a crucial metric that governments, central banks, and investors use to understand the health of an economy and make decisions about monetary policy, interest rates, and other economic factors.

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Inflation Prometheus Lionhart, M.D. Inflation Prometheus Lionhart, M.D.

Inflation - Gold as a Hedge

Conventional wisdom is that when inflation is bad, you should buy Gold. The idea is that gold is a “store of wealth” with a traditional value for centuries. and its value has often held up well during times of high inflation. This is because gold is a scarce and valuable resource that is not subject to the same forces that can cause paper money to lose value. When the value of paper currencies falls due to inflation, the price of gold tends to rise as investors flock to it as a more stable store of value.

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Inflation Prometheus Lionhart, M.D. Inflation Prometheus Lionhart, M.D.

Inflation - How is it measured ?

There are 3 primary tools used to measure inflation: Consumer Price Index (CPI), Producer Price Index (PPI), and Personal Consumption Expenditures (PCE) price index. The CPI is used as a measure of inflation and to adjust various economic statistics, such as wages and benefits, for changes in the cost of living. The PCE is used as a measure of inflation and to inform monetary policy decisions by the Federal Reserve. The PPI is used as a measure of inflation at the wholesale level and can provide insight into the pressures on businesses to raise prices.

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Inflation Prometheus Lionhart, M.D. Inflation Prometheus Lionhart, M.D.

Inflation - What is Cost Push ?

Cost-push inflation (sometimes called supply side), occurs when the cost of producing goods and services goes up, leading to higher prices. This can be caused by a variety of factors, including an increase in the cost of raw materials, labor costs, or taxes.

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Inflation Prometheus Lionhart, M.D. Inflation Prometheus Lionhart, M.D.

Inflation - What is Demand Pull ?

Demand-Pull Inflation is the type of inflation that occurs when products are awesome, people have money, but the supply is limited. The demand for these awesome products and the money to pay for them drives up the price.

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Inflation Prometheus Lionhart, M.D. Inflation Prometheus Lionhart, M.D.

Inflation - The Basics

Last year a gallon of milk was $2. Now a gallon of milk is $3. It is the same gallon of milk. Same plastic, Same Cow, Same Farm, Same Store, Same Everything… but the price is different. Why? Because the value of the money has changed. The milk is still worth the same. The money is worth less. This is inflation. Over time this is a more pronounced thing. You probably have heard your parents or grandparents talk a bout how cheap things were when they were younger. A soda was 1 penny or something like that. Coca-Cola is still Coca-Cola… the difference is the money.

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