Reading the headline numbers from this morning's report from the U.S. Bureau of Labor Statistics would likely make you think inflation's back. But you may not be positive. Month-over-month, prices measured by the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.3 percent in October, though the index is 0.2 percent lower than its year-ago level.

That's nothing new. Monthly CPI has been positive for seven of the last 10 months, though the yearly numbers have remained negative. But look at the trend in the annual rate. There are degrees of negative.

Inflation's Many Faces

There are definite signs of bottoming in the inflation rate, whether measured by CPI-U, or its core rate (stripped of volatile food and energy prices), the Producer Price Index for Finished Goods (PPI-FG) or HardAssetsInvestor.com's Monetary Inflation Index. All of the metrics have turned up in the past six months.

Inflationary Trend (Month-by-Month)

Of course, there's distinction among these metrics. CPI and PPI measure price inflation, albeit at different levels in the distribution chain. CPI's a retail number, while PPI reflects price changes at the wholesale level. You're concerned about these numbers because they reflect the cost of chattels and services you require in your everyday life.

HAI's index doesn't measure the price of goods at all. It tracks the wholesale purchasing power of the U.S. dollar in global financial transactions. You'd care about these figures if you had to convert your George Washingtons (or, lucky you, your Ben Franklins) into another medium of exchange such as gold or euro.

The lesson illustrated by the chart and table is pretty clear: Monetary inflation precedes price inflation. At least in this economic cycle. Monetary inflation, metered at the same pace as the Bureau of Labor Statistics clocks CPI and PPI, turned positive back in August, a month after prices for goods bottomed out.

The good thing about the HAI measure is that you don't have to wait for a lagging midmonth report to figure out how your dollars are doing. The index is updated in real time. Daily fluctuations in the 12-month rate are published as a subhead in each Desktop column. Take a look at the top of this article and you'll see the monetary inflation index has jumped 4.7 percent from its level 365 days ago.

Reflation caught hold at summer's end and is accelerating.