Inflation for 8 year olds!

I remember the first time I wondered what inflation is. I was about 8 and heard the word on the news. Afterwards I asked my father about it (sufficient to say he is a scientist, not an economics expert). I don't remember exactly what he told me, but what my little child mind understood is that there are some bad men someplace falsifying and creating fake money. I literally used to think that if the inflation rate is, say, 5%, this means that 5% of all the money people use is fake money printed by some thief in his basement. I didn't really give that much thought; inflation is not the most important thing for children. By the time I was 13 I was sure my definition was wrong and economics is so complicated I would never know what inflation is. But now at age 20, after a period of interest in economics (especially the Austrian school), I realize I may have been right. Now, I know inflation is not exactly false money, it is perfectly legal tender. However, there is more than just a grain of truth in my 8 year old assertions. Inflation is indeed a bunch of shady characters creating money. Of course they don't do it in the basement and in secret, they do it in the Central Bank and they do it openly. And that is what makes this whole process very strange. Of course I know liberals (i.e. Keynesians) would say I'm "prejudiced against inflation" because at a young age I received the impression it was bad. But now I'm an adult, I'm thinking about this rationally, and I still think it is wrong for some rich Yale/Harvard blokes to lower the value of my savings while enriching themselves (Bernanke is printing another $600Billion!). In fact it was easier to accept when I used to imagine it being done by some tattooed guys wearing ski masks in a badly-lit basement or garage.
When I was 8 I thought the government would get these guys. Then I realized "these guys" are the government...

I don't quote the great Ludwig von Mises nearly often enough. And he described inflation very well from an economic perspective when he said that "Inflation is an increase in the quantity of money without a corresponding increase in the demand for money, i.e., for cash holdings". This is exactly right. There is no demand for larger cash holdings - this is shown by the cash holdings losing value when its supply increases. The only "demand" in this case is the demand of greedy politicians and their banker cronies.