Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the price level rises, each unit of currency buys fewer goods and services; consequently, inflation (cut is) indicates an erosion in the purchasing power of money. This process most commonly occurs because of the over abundance of money in the system. When more money is created but the same amount of goods exist, it will generally take more money to buy the same goods tomorrow than it did today.
Inflation can also be caused in very specific sectors by short term supply disruptions, but broad price increases are a result of excess money creation. This hurts you because prices will rise faster than one's income, so while you may make more money over time, price increases will out pace your raises. Also, Inflation generally destroys savings because the dollar you saved yesterday begins losing purchasing power immediately. Even with interest from a bank it will lose real value over time, making it pointless to continue to save. Finally in conjunction with an income tax system and inparticular a progressive income tax system where tax rates move up with income, inflation will push people up to higher tax brackets and create profits on investments, but that person will not have a higher standard of living as a result. In fact, it will be lower. Yes there is a way that you can keep making more money, but it's not enough more and you ultimately end up with less. Do you ever ask yourself why most everything gets more expensive overtime? It doesn't have too! If you want to see how bad inflation can get, do some reading on Germany in the 1920's.