1. The act of inflating or the state of being inflated.
2. A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services.
The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.
As inflation rises, every dollar will buy a smaller percentage of a good. For example, if the inflation rate is 2%, then a $1 pack of gum will cost $1.02 in a year.
Most countries' central banks will try to sustain an inflation rate of 2-3%.
That 600 dollar check won't even cover the price increase that we have to pay for gas and consumer goods from abroad because of the declining value of the dollar....
LONDON: "For the first time in 13 years, people who trade currencies say that confidence in the markets to determine exchange rates is dwindling.
The crisis that may bring the so-called Group of Seven nations to coordinated intervention is the result of a sinking U.S. economy, the weakest dollar since 1971 and the biggest currency fluctuations this decade, some observers say."
http://www.iht.com/articles/2008/03/25/ ... dollar.php