Business leaders, investors and consumers are, for the first time in decades, facing price uncertainty. Investor and media fascination with commodities has given way to very real concerns about accelerating inflation rates. Businesses are already passing along higher costs. During the past three months, the Consumer Price Index (CPI) has risen at a nearly 6 percent annual rate.

Business leaders are justifiably concerned: Will such prices be sustained, and what impact might this have on inflation rates in my industry? Will customers accept commensurate price increases, or will my margins suffer? In exploring how the future might unfold, it’s instructive to reflect on a period in U.S. history when inflation was low, then rose for several years to a peak before subsiding: the 25-year period from 1964 through 1988.

During this time, commodity prices rose well ahead of a major jump in the CPI, with the bulk of the price spike clustered into two years (up 22.1 percent in 1972 and 59.8 percent in 1973), while inflation had risen to just 4.3 percent. For the first decade of this period, inflation averaged 2.5 percent while commodities rose 8.4 percent per year. From 1974 forward, inflation averaged 7.1 percent, well in excess of commodity prices, which rose by an annual average of just 1.9 percent.

From 2000 through February of this year, inflation has risen 2.5 percent annually and commodities have gained 8.6 percent per year, numbers that look remarkably similar to the span from 1964 to 1973, when commodity prices rose prior to actual inflation in the face of inflationary government policies (namely, deficit spending and an accommodative monetary stance). The United States sees similar policies in place today. Also, our national balance sheet is in worse shape. Will we look back at 2011 as another 1974?

The importance of stable prices is most apparent when they cease to be stable. Commodity prices have receded somewhat in the past month, but not nearly enough to offset the gains so far experienced. As prices stay high, it becomes more probable that we’ll see increased structural costs and, ultimately, above-average inflation rates.

If higher inflation is imminent, what recourse might investors and business leaders have? In the 25-year span discussed above, commodities failed to hedge actual inflation, and stocks lost money.

For business, though, the news wasn’t as dire. Real corporate earnings grew nearly 50 percent. Creating value for customers, differentiating products and services, locking in low capital costs, striving for operational efficiencies and passing along cost increases helped businesses battle inflation. It would seem this focus on business fundamentals is just as important in today’s environment.

Sayer Martin is vice president of the CFA Society of Iowa and portfolio manager for Clarity Asset Management Inc.