The CPI is a government made indicator ... its a typical basket useful during typical times ... supply and demand and the market determine what goes up and what goes down. We will continue to experience both inflation and deflation.

Housing prices especially in the US will continue to experience falling prices (deflation) since supply is high demand is low and consumer's taste are changing ... i.e. investment property in resort locations is a long term venture given no immediate turn around.

Oil prices are likely heading up ... volatility in the middle east is on the rise with the withdrawl from Iraq and the inevitable increase in Iranian influence on both their neighbour and the region ... all of the protesting in that region is far from over ... of course Libya is quiet now that the oil is flowing again satisfying western light sweet crude, but doubtful it is far from styable ... also peak oilers will say it had nowhere to go but up even if there are vast reserves of dirty oil which requires more refining effort ... One way or the other prices have been and will continue to rise.

That which is heavily dependent upon oil as a factor of production will also likely rise and of course all of this can be exacerbated with currency devaluation or appear less dramatic with currency appreciation for importers.

IMO a pardigm shift is required in these times wrt to the concept of inflation. Since the excessive consumption pattern of western society has by necessity (be it financial or environmental pressues) begun to change and that trend is more than likely going to magnify in its importance. This is especially true as the middle class are being shifted to income levels of the poorer class and as the inevitable tax increases and reduced government service cause a shift away from luxuries items which will put downward pressure in prices on these items (highly deflationary) while with necessities esp. those imported will likely rise (inflationary).

So what do we have ... a requirement to think out of the box because

http://www.youtube.com/watch?v=1oU7M4OeSRM

(another paradigm shift ... harmoniously presented ... lol)

orgy