That is the one and only definition. “Price inflation” is something different. So is inflating a balloon. Other than sharing a common root they have little to do with each other.
Something I use to watch secular trends is the MSN ETF performance tracker:
Given that there are long/short ETF’s for everything these days is clear the overwhelming trend is inflationary, as demonstrated by the current energy/commodities boom. The only obvious example of deflation on the first page is SKF (short the financials), which is an example of credit destruction due to the housing crash.
In the information age, central banks can create credit faster than even the most the foolhardy consumer can destroy it. And those with first access to this credit (i.e. banks and private equity) aren’t going to lend it to dead beats to speculate on real estate. The are going to buy energy, commodities and precious metals to retain the purchasing power of their investment.
And for the record, inflation was not the prime mover of the housing bubble. Securitized debt products and the resulting fraud they enabled was. Without that the housing bubble never could have happened, regardless of the control of money supply.
