The common misconception about Consumer Price Index (CPI) is that it measures the change of goods' prices. In fact it measures the change of the cost of living . And these two things are not the same.
The cost of living is how much people have to pay every month for a basket of certain goods. And the amount that they have to pay is not the sum of the prices of these goods. It is because people increasingly pay for goods with their credit cards rather than with cash. So if the price of an apple is, say, 1 dollar but you buy it on a credit card, then you pay just 10 cents a month for it, provided you don't pay the bill from the credit card company in full but pay just a minimum payment shown on the bill.
Of course, not everyone pays for apples by a credit card. But most other goods are bought on credit. CPI is an average measure for an average person. Average person pays, say, 80% of his purchases by a credit card and does not pay monthly bills from credit company in full, but pays just a minimum amount specified on the bill.
So prices of goods can increase dramatically but the minimum monthly payment on your credit card may remain the same or even decrease. Why ? Because the minimum payment is determined not only by your ballance on the card but also by the interest rates and other factors. In the 1990s a monthly balance of $3000 would require a minimum payment of $100. Nowadays a monthly balance of $5000 requires a minimum payment of just $10.
The same goes for things which are bought not on credit cards but on loans, e.g. houses. In the 1990s monthly mortgage payments for a $100,000 house were around $1,200. Now $1,200/month buy a house of $300,000. For the house of $100,000 one has to pay just $450/month. Thus, not only there is no inflation in the housing component of CPI but, conversely, there is a deflation. And this is in spite of the growth of house prices of more than 150% since the 1990s.
This explains why prices may skyrocket but inflation (measured by CPI) remain tame. Easy access to credit cards and loans (by the majority of population) results in a big discrepancy between prices and the monthly cost of the basket of products (CPI). The more people have credit cards and the more goods can be bought on them, the lower monthly cost of the basket of necessary goods. That is why requirements to qualify for credit cards (and loans) are constantly lowering and the range of goods than can be bought on credit is constantly increasing. (I remember the times when it was impossible to pay for groceries by credit cards. Now they are accepted in all groceries stores and the increasing amount of people pay for groceries by credit, thereby allowing groceries prices to rise without affecting their budgets.)
Credit card is a great invention that allows printing money to cause no inflation (for a while).
But increase in money supply (due to various stimulus packages, qualitative and quantitative easements) causes prices increase not only in rich countries but all over the world. However, it is impossible to hide inflation in poor countries as people there do not have credit cards. This quickly results in explosion of public discontent. Thus, it is plausible to assume that various monetary easements in rich countries cause uprisings in poor countries, e.g. the Arab Spring. While prices (especially food prices) were stable there people did not rise against their dictators. They started rising when prices started skyrocketing and could not be neutralized by credit cards.
In conclusion I would like to say that don't know how CPI is actually calculated in various countries. Usually it is done by government agencies, which themselves establish the methods of calculating CPI. These methods frequently change. But I know what CPI is about and what it should indicate. It is how much an average person has to pay every a month in order to eat certain croceries, to wear certain closings, to have a certain roof over the head, etc., in short to have a certain basket of goods every month. So credit cards and loans definitely reduce the amount to pay (by the virtue of extending the payment over a lengthy period of time).
It is quite possible that correct calculation of CPI would reveal that we have even lower inflation than the government figures show. And this is in spite of significant prices increase in the recent years due to the endless monetary easements.
On the other hand, it would be interesting to invent an analogue of credit in engineering to resolve its contradictions too.