Well, it seems the rhetoric over inflation is getting more heated. Is it real or a false illusion? We have been calling attention to an upward turn in prices since last fall. This concern has not been shared by the Fed or Wall St. in general. There is evidence however to suggest that inflation is on the rise as reflected in the declining bond market since Labor Day. Indeed, first wholesale and then retail inflation reports began showing increasing signs of inflation. After increasing at a miniscule .1% in July, 2010, nominal wholesale prices for finished goods have increased at an average monthly rate exceeding .6% from August, 2010 through January, 2011. Over the past three months (November, 2010-January, 2011), nominal wholesale prices for finished goods increased even faster, at an average monthly rate of .8%. More disturbing were the increases in nominal wholesale prices at the intermediate and crude stages of processing. After a -.4% in July, monthly increases in nominal prices for goods in the intermediate stage of processing increased from .6% in August to a monthly average of over 1% from October, 2010 through January, 2011 and have been increasing at an annual rate of 6% or better over this period. At the crude processing stage, nominal wholesale prices actually bottomed in June of last year at a -3% annual rate. Since then, monthly changes in nominal crude materials prices have moved from 1.5% in July to 6.5% in December, 2010 and were 3.3% in January, 2011. Over the last three months, ... Log in to view full article.