Geek's Number Talk: What causes inflation?

We are in the midst of a global economic re-awakening, with at least 56 nations currently experiencing inflation above 4%. As a point of comparison, the U.S. inflation rate in 2008 was 3.84%; but it has risen as high as 11% in 1974 and 13.55% in 1982!

So, what causes inflation? There are three types: demand-pull inflation – when the demand for goods and services increases quicker than production capacity; cost-push inflation – the result of an increase in the cost of production and labor; and built-in inflation – driven by standard cost of living increases.

Of course, there are two sides to every coin. Just as inflation may have a negative impact on renters and those without a lot of assets, it can help homeowners and landlords access additional wealth as their property values rise.