Inflation a standard definition (dictionary.com): a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency
An alternate definition (itulip.com): 1. to an economist, an increase in the general or "all goods" price level resulting from an oversupply of money; 2. to a government statistician, a political football thrown onto the field as producer and consumer price indexes, continuously reformulated and subject to interpretations invented to suit various constituencies over time, such as the under-reporting of home price inflation via an equivalent rent formula when home prices are rising and rents are falling, in order to hide the fact of a housing bubble that is needed to keep the economy from falling into recession 3. to the person on the street, rapidly rising prices of non-traded goods and services, especially insurance, education, and health care, resulting from an excess of cheap credit and the inappropriate use of credit to purchase depreciating assets.
I snagged this neat graphic over at itulip.com and it illustrates how the CPI (Consumer Price Inflation) can remain low despite massive price increases in real estate, health care, education, and most other 'services.' This 'service' price inflation vs. 'product' price inflation is due to the interesting effects of globalization and governmental monetary arrangements that are beyond the understanding of most of the general public.
On a personal observational level, I have definitely noticed the massive price declines of goods made abroad and the massive price increases of goods and services created here in Canada. Feel free to discuss the effects of these differentials in inflation. How do they impact you and your personal choices? Why?