Inflation

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[Notabull]

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[Robroy]

[Robroy]

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[TJ_98370]

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Today I read an AP article in the Kitsap Sun "Inflation Reaches New Heights" (sorry, no link) in which it says "...The Labor Department said wholesale inflation, driven by skyrocketing gas and food costs, rose 9.2 percent for the last 12 months....."

Maybe it's just me, but I am confused. What exactly does "wholesale inflation" mean, and how does it differ from plain old "inflation"?

Merriam Webster's definition of "Inflation" is: a continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services.

Over on the blog, in the" Who Gives a RA About Banks" thread there was a bit of a discussion as to the meaning of "inflation", and "price inflation". It was brought out that rising prices does not necessarily mean inflation is occurring. Increased prices could be a result of varying exchange rates of national currencies, not because of increased money supply in the US.

Also, it seems that using the term "inflation" or "deflation" to describe trends in the economy are misleading, considering the fact that some segments of the economy can be experiencing trends that are the exact opposite of other segments, i.e. real estate vs. food and gas.

So when you read stories in the MSM about "inflation" or "deflation", what does it really mean?
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