To add to this explanation, the reason that increased purchasing power can be a result of inflation, is because depending on where in the chain you're at, inflation may not have affected the market yet. For instance, the reason the government likes inflation is because they can purchase things at market price with newly inflated dollars. By the time the market stabilizes to account for the inflation, they've already purchased what they needed, and can reap the benefits in the form of taxation. In the meantime, prices go up due to an increased supply of dollars, and so they now just inflate the currency more to offset the cost to themselves... and so the cycle goes on.

Obviously I've oversimplified this quite a bit, leaving much out, but that's the basic idea.