I think you may be confusing the effects of inflation with the actuality.

As TigerJimmy stated, inflation is not rising prices. It is an increase in the money supply that will eventually, inevitably, cause prices to rise. With the trillions of dollars that the Fed has dumped into the money supply, the inflation is already a done deal. Now we're just waiting on the effects.

Things cost pretty much the same today as they did 50 years ago. In 1962 a man earning good wages could buy an entry-level car for about eight weeks wages, say $2,000. In 2011, a man earning good wages can still buy an entry level car for about eight weeks wages, say $20,000.

The car hasn't become more expensive, at least not in the only currency that counts: how many man hours did it take to buy it. The money has become worth less. That's inflation.

If I were smart enough to be an economist, perhaps I wouldn't have this nagging suspicion that there is a basic flaw in our whole economic system. Apparently in order to sustain itself the economy has to grow at an annual rate of 4% or so. If it doesn't, then bad things happen. Well, we're living on a finite planet with finite resources, and open-ended growth like that is simply not sustainable. What is going to happen when it's time to "pay the piper"?

I have this dreadful suspicion that we're about to find out.

tanstaafl.