Inflation

Yesterday evening while I was riding on my bike back home, I was all wet and cold and my left hand ached from the consistent pulling of clutch(Delhi traffic huh!) and during one of the traffic jams a thought came to my mind and that was high prices and inflation.
‘Inflation’ a word that the common man has started to use in his daily vocabulary in the recent years. I tried to remember what I had learnt about inflation in school and through my blurred remembrance covered by the smoke of laziness I could remember that inflation was a situation in which due to high demand the price of goods and services elevate at an alarming rate; so now why do the prices of daily goods or the things that we buy at our local kiryana shop increase the reason is because the price of the raw materials is increasing, now what are these raw materials they include some primary sector products and labour so the price of raw materials also increases for the same reasons as the end product the increase in the price of inputs now these inputs . and these inputs compromise a high ratio of labour costs and I have never seen the salaries or wages of the labours increase?
On the other side of it at the time of recession the price of goods should come down but it seldom happens like in recent times recession which was by far the worst in my life saw only a few negative changes in terms of price the goods that had increased by rupees 10 at the time of inflation only decreased by rupees 2 and talking about salaries where our spending powers come from; there were high level job cuttings and decrease in salaries.
So where did the money go I am no economist and I may be wrong but this sure makes me think where did the money go?