Gil is so inflated.

[Macka]

Inflation mean that the amount of gil every player have rise and rise and rise. The prices rise also, because the players can pay the high prices.
What you mean is deflation, where the prices fall because nobody have enough gil to pay it.

No only the product is in deflation in his example it is materia, has nothing to do with the gil. If gil was in inflation everything would be over priced in game. This isn't the case have seen the marketboards everything is dirt cheap except certain materia and high end crafted gear and vanity materials and gear.

As inflation rises, every dollar will buy a smaller percentage of a good. For example, if the inflation rate is 2%, then a $1 pack of gum will cost $1.02 in a year.