Are you ready for inflation?

What most people call inflation is actually the effect of inflation: A raise in general (or sector) prices. Inflation is an increase in the money supply.

When I was a child, comic books cost 10 cents. The "cent" symbol is no longer on computer keyboards, as it's largely irrelevant. Comic books are now $3.99. Measured in comic books, in forty years, the dollar has lost 98% of its value.

Milk was $2.95 two years ago at Publix. Milk is currently $4.95. Measured in milk, in two years, the dollar has lost 40% of its value. Measured in glass, or steel, or lumber, the dollar has lost even more of its value in two years.

The Department of Commerce releases "inflation" measures every year that are used to set increases in Social Security and public spending. These are not neutral measurements, and a lot of people in finance and production often don't take them seriously. You shouldn't either. The increases in prices you've seen in your industry are not atypical, I assure you.

And they may get worse. Are you hedged against inflation? What has your company done to prepare for it? Are you ready? Have you done the one thing you must do to protect yourself against inflation?