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Is this purely hypothetical? I hope it is because good luck trying to find when inflation will go though the roof.
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I hope I'm wrong. But it is hard to hide that fact that we are going to get some sort of hit from inflation do to the super fast rising gas prices. Sooner or later it is going to effect the cost of everything.
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I know this is counter intuitive but higher energy prices actually act as a contractionary force in our economy (i.e. just the opposite of inflation). Higher energy costs act as a de-facto tax on consumers as almost everyone buys energy to live their daily lives. That money could have otherwise gone to non-energy goods and services creating greater demand and increased pricing power for them.
Runaway job and wage growth would be a much better indication of higher inflation on the horizon. Companies spend most of their $$ on paying worker's salaries. Watch the montly non-farm payroll report. The latest just came out on Wednesday. 169K new jobs v. 190K expected with an upward revision of 44K on previously reported numbers. Basically almost a perfect report. If you started seeing 300K-400K+ every month then I would be worried about inflation and an over-heated economy.
FYI, the next CPI (consumer price index) report is on September 15.
http://www.bls.gov/cpi/cpireldates2005.htm
Check out the last one (
http://www.bls.gov/news.release/cpi.nr0.htm). The important line in the first table is the "All items less food and energy" (aka the CORE CPI rate). You can see as oil prices have spiked in recent months the growth in the core rate has diminished.