As the economy continues to show signs of improvement, members of the financial press who believe that bad news sells better than good news are sniffing around looking for signs of inflation. The only ones who cheer inflation are those who have borrowed long-term and will have the chance to repay in cheaper dollars. The rest of us could do without the beast.

Inflation is an insidious tax on future value for most consumers and investors. Our money doesn’t buy as much, the interest we earn on CDs and other fixed income securities is worth a bit less, and retirement on a fixed income is downright frightening.

The common perception of inflation is that it is caused by too many dollars chasing too few goods, forcing prices up. Basic economics classes teach that wages spiral up, putting further pressure on prices as inflation continued unabated.

We learned in the 1970s that inflation could be stimulated by sudden price increases in commodities such as oil and gas. We have also been barraged with the idea that our government can print money by spending more than it takes in from tax revenues.

Government spending during the Reagan years created huge deficits, but strangely enough, inflation fell and has continued to fall from its peak in the early 1980s.

Now, the press, looking for bad news to write about, is focusing on accelerating commodity prices, the falling dollar, rising shipping costs and economic growth that exceeds its monetary potential—all forces that could cause prices to rise and bring a return of inflation.

During a period of downturn, we normally see disinflation (falling prices) result from declining consumer spending and subsequent lack of business investment. Producers lose pricing power. There remains a low level of resource utilization as businesses have excess capacity and unemployment exists.

As the business cycle turns to the upside, inflation rates fall, as they have in five of the last six cycles during the first three years of the recovery. This decline is largely due to increased productivity as businesses become more efficient and do more with less.

This decline and recovery has been different than most—consumers have continued to spend money, and the main downturn in spending has been focused on the investment side as firms needed to work off excess capacity built up during the tech boom of the 1990s.

The growth in productivity we are witnessing is astounding many economists. Recent figures on productivity growth show the highest gains in productivity since the end of the recession in 1961. The impact on prices has been positive as businesses have been able to produce more for less and have not had to raise prices.

Inflation hawks still want to hang their hats on the “falling dollar” tree, citing the higher prices we will have to pay for imported goods.

Logic certainly tells us productivity cannot continue going up forever, and we will not be able to ignore a long-term impact caused by the falling dollar. But for now, inflation is not a factor, and, barring outside events such as a mid-east shutdown of oil flow, inflation should not be a hindrance to our economic recovery.

For an early warning of impending inflation, watch the long-term bond market. Falling bond prices coupled with rising yields remains a good bellwether for inflation.