We are indeed in a currency war right now. The Fed lowered interest rates, and pretty much every other economy followed suit. It's especially bad in Asia right

We are indeed in a currency war right now. The Fed lowered interest rates, and pretty much every other economy followed suit. It's especially bad in Asia right now, where many economies have trouble exporting goods without having a lower valued currency. Japan really sent a shock wave around the region when they started pumping a few years ago. The currency war This may explain why inflation has not followed, but my current favorite explanation is that the middle class has not seen signifigant wage growth over the last 30 years. You only see monetary CPI if more money is chasing fewer goods, but that requires people to have more money to perform that chase. This (combined with the oil panic) was a big reason for the inflation that happened in the 70s: printed money largely went into giving workers a raise, instead of being put into financial investments. I'm not an expert on modern monetary inflation (is anybody at this point?), but when you drop the interest rates to the lowest point in 50 years and have near zero inflation, there's something weird going on. Most of the wealth generated here is not going into the hands of the middle class. The wealthy invest their money into big (and/or risky) assets like what's being invested in right now. I'm not just talking about a cigar-chomping Daddy Warbucks character when I say "wealthy", I also mean entities like corporations that are able to take out money at very low cost. This isn't necessarily a bad thing, as corporations use this money to invest and strategize. But we're not seeing a lot of gains for the majority of Americans, and that's a problem, especially when things they need (like real estate) spike up a lot. It's important to note that monetary inflation is not the same thing as the cost of a good going up. For example, if oil becomes more expensive, it makes goods increase in price due to the increased cost of producing and shipping those goods. That's not the same thing as prices going up because there's more money chasing the same amount of resources. Production cost inflation doesn't bother me as much as monetary inflation does (frankly, we need expensive oil to signal that it's time to look for alternatives), but we're not really seeing either right now. The one positive metric I'm seeing for the markets, ironically, has been a reason for a lot of it's volatility lately. When oil goes down in price, it's good for the economy, and consumers have more money to purchase things. It's been estimated that 80% of the stock market benefits from lower energy costs, but of course, people still freaked out when oil tanked and sold a lot of stocks, especially in the oil sector.