I'm trying to figure out the very basic question, "What causes inflation?"
Three easy answers:
1) In a fiat money system, if the govt. just prints/creates more money at a rate much faster than economic growth.
2) A supply side shock, like the price of a super-central commodity like oil rising rapidly, which affects everything else.
3) A demand side shift, where people just want to consume more, but the number of goods is limited (so they deplete savings to chase after goods, causing prices to rise in the short-run).
The much more sophisticated answer can be found here:
Milton Friedman, Monetary Mischief (chapters 1-3).
Incidentally, I think we're far off from inflation. With the velocity of money so far down, the Fed can print as much money as its wants, but if people need to save and pay off debts (so output is below capacity), prices will stay low.
The best paper to read about the current debt deleveraging process is:
Irving Fisher, "The Debt Deflation Theory of Great Depressions" (1933)