Originally posted by Ira It seems like companies are experiencing sales drops due to the economic meltdown, and they're trying to "make up" for it by raising their prices.
Higher prices "in real terms" (i.e., in gold or proportionally to people's paper salaries) raised "rationally" imply higher demand or lower supply.... If you raise prices "in real terms", "irrationally," i.e., if there is no change in demand, or drop in demand, etc., you lower the quantity demanded and you end up with unsold surplus.
Perhaps, it is inflation due to Ben "helicopter" Bernanke.
EDIT: I only took one economics course as an undergrad, so feel free to ignore.