There are a variety of good "cause and effect" type indicators of inflation, with crude oil, interest rates, and silver being among the best. Oil because it is the consummate progenitor of cost-push inflation, a la 1973-4 and 1979-80. Interest rates (10-year T notes in this case) because they are both a source of cost-push inflation, and a result of demand-pull inflation. And silver because it is real money, yet less likely to benefit from a deflationary financial crisis as gold (thus perhaps a "purer" inflation indicator).

The Strebler Inflation Index (SII) is an index of the three, weighted to give each about the same influence, in an effort to predict coming inflation or deflation. Since 1970, the price of silver has averaged somewhere around $7/oz; 10-year Treasury rates have averaged something like 7%, and crude oil prices have averaged about $20/bbl. The index takes the price of silver, and adds to it the interest rate and 1/3 of the price of oil. For example: if silver is $6.50/oz and 10-year rates are 4.10% and oil is $44/bbl, then the index would be 6.50 + 4.10 + 14.67 (44/3), or 25.27. Sometimes one component or another might dominate the index, as interest rates did in the very early 1970s, or crude oil does today. But overall, the index gives a balanced picture of what these three items see happening.