Nowadays in press there are a lot of reports on inflation but what I find bewildering si that columnist get the logic underlying the report wrong. What is I understand is that Infaltion is phenonmenon of money supply only( too much money chasing too few goods)... growth never leads inflation as long as you can supply goods and services in demand (or demand created by the money available in the hand of economic agents). Unbridled money supply growth pver the past decade or more, has created this situation. All this while bulk of that money chased financial assetsviz. stocks, credit derivatives, real estate, bonds... as the money supply increased the appetite for risk increased and so the value of such assets. Now with tide turning, cost of credit and availability of it becoming dearer, risk appetite has declined, hence, financial assets have been faced large scale unwinding of such risky bets. 

            Central banks have started to pump money in their financial system, or cut rates to ease the finacial distress. Money supply has started to increae back again. All this money needs to find a home, Bond or commodities. Commodities seemed a good bet because aprt from few countires Bond market globally is not that developed. Commodities being a hard asset can not be produced put of thin air like money 9fiat currencies)... Voila... commodities are seeing some of that money which always use dto head for the bastion of financial markets come to it... Too much money is now chasing it for ALPHA...

 Conclusion: Inflation allt his while was their in asset markets (primarily in financial assets or real estate) and not much in the commodities, so we enjoyed it as it fueled our nominal wealth. now with that money inflating commodities, we are feeling the heat... ( we are crying at the symptom and not the problem)....THE NEXT CYCLE, WITH INFLATION GENIE NOW OUT IN OPEN, WE SHALL SEE THE INFLATION EXPECTATION INCREASE (something central banks are afraid of becoz its their job to manage that expectation and not real inflation aka.. money supply)  AND THAT CASUE TWO THINGS: BARGAIN HIGHER RETURN FOR RESOURCES (LIKE LABOUR) AND DEMAND HIGHER YIELD ON FINANCIAL ASSETS... HIGHER RESOURCE PRICES TO COMPRESS EARNINGS AND HIGHER YIELD TO LOWER PRICE PAID BY INVESTORS FOR THAT EVERY DOLLAR OF EARNINGS...SO ALL IN ALL ASSET DEFLATION....