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Inflation from 1750

The consumer price index has had several bouts of high inflation. Prior to the1930s these bouts of inflation would be followed by significant deflation. Typically there would be inflation that would climax in a major war followed by deflation after the war. From 1750 to 1900 there was no upward trend in the price index.

The creation of the Federal Reserve brought the ability to inflate the money supply. After the Great Depression the Fed adopted the policy of not allowing any significant deflation. As before there are periods of double digit inflation, but in between have been periods of modest inflation rather than deflation. It is not clear whether the Fed will be able to maintain the modest inflation of the last 30 years or if higher inflation will return.