Prices are increasing everywhere and so there is lots of talk about inflation. At the same time, there are other economists warning that a future oversupply of goods might bring a deflationary period. Whatever economic circumstances are on the horizon, we can be sure that the value of the dollar will be decreasing. Let’s look at each of these issues.

One measure of inflation is the consumer price index. It grew by 4.2 percent in April and surged 5 percent year-over-year in May. In case you are wondering, that is the largest increase since August 2008. But the Federal Reserve says inflation is “transitory.”

That may be true, but you have no doubt observed higher prices in what you have purchased or considered for a purchase. Over the last 12 months, core inflation rose significantly for used cars (29.7%), airline tickets (24.1%), and jewelry (15.7%).

The financial officer for Costco explained that higher labor costs and higher freight costs, along with container shortage and port delays all forced them to raise prices in their stores. A financial officer at Home Depot explained that increased costs of everything from lumber or copper required them to pass on similar costs to customers.

The Federal Reserve believes that all of these cost increases will be temporary. Eventually the supply shortages will work themselves out, and demand will subside. While that may be true, we must not forget that the money supply in America grew at unprecedented rates. Such an increase in the money supply means that the dollars in your pocket or purse will be worth much less in the future.

We may be experiencing an inflation spike right now because of the after-effects of the pandemic and lockdown. But the significant amount of money printing is something Christians and ministries should take into account as they make financial decisions.