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How much is inflation?
FYI...prices don't always go up.  Inflation is a monetary phenomenon.  I'm simplifying greatly here: if more money is printed (or the money supply increases through fractional reserve banking) and it is chasing the same amount of goods then prices will go up.  Conversely, if money is held constant and the economy becomes more productive, producing more goods, then a constant amount of money is chasing an increasing amount of goods and prices go down. After the Civil War the greenback went back to being on a gold standard in 1879.  After 1879 greenbacks could be redeemed for gold.  Gold restricts money growth since it is difficult to obtain. Here are the price and wage indexes from 1869 - 1889 (from here):  Notice from 1879 to 1889 that wholesale and consumer prices fall but wages start to increase.  Imagine your salary staying the same (or even increasing) but the prices of items falling. Still don't think inflation is a monetary phenomenon?  Here is a CPI chart from 1800 to 2007:  Notice how the curve starts to go drastically up around 1970.  What happen then?  The US dollar went off the gold-exchange standard and the US dollar became a purely fiat currency backed by nothing but government decree which allows the Federal Reserve to print money ad nauseum.