They will also have you believe that the Consumer Price Index, or CPI, is a measurement of inflation. Again, not true. The CPI measures prices, which are an effect of inflation, not the cause. The CPI will measure prices as related to a point in the past. To further hide the devaluation of our money, they will keep moving forward the year that prices are compared.

In a future article, The Professor will discuss inflation in more detail. Understanding the purpose, the cause, and the effects of inflation is an important economic concept to grasp no matter what investment field you enter. For example, did you know that boom/bust economic cycles are caused by the Fed inflating the money supply? Did you know that stock market bubbles and real estate bubbles are caused by the Fed's inflating, then deflating the money supply?

 When you hear statements that prices are causing inflation to rise, you now know that the person giving you this information is not using the correct definition of inflation.  Because of The Note Professor Newsletter, you are now aware of the true meaning of inflation…an increase in the money supply relative to available goods and services, resulting in general price increase.