This week in sensational journalism: inflation.

CNNMoney ran an article Tuesday warning of the wrath of rising food prices. Among the examples of food's assault on our wallets: A pound of bread now costs 3% more than a year ago; the price of potato chips is up 1% since last year, and -- hide the children -- a dozen eggs now costs a debilitating two pennies more than a year ago.

Then came the real whammy. "Food prices in January rose 1.8% from the prior year, marking the fastest pace since 2009."

Panic!

Deep breath. Count to 10. Carry on.
Food prices might be rising at the fastest pace since 2009, but hold on a second. The time between 2009 and today actually marked the slowest rise in food prices since the government started keeping track in the late '60s. Today's two-year high was basically guaranteed by default.

And then there's this: January food prices were indeed up 1.8% over a year ago, but that's way below the annual average of 4.4% since 1967. January's 1.8% jump would actually be the fourth lowest annual increase in the past 44 years. So on one hand you could say current food inflation is the fastest in two years. On another, you could say it's among the lowest in two generations. Take your pick -- depending on how sensational a mood you're in.

More important than putting food prices into context is a point New Yorker columnist (and former Fool writer) James Surowiecki made last fall:

Why is inflation unpopular? The biggest reason, [economist Robert] Shiller found, was simply that people believe higher prices reduce their standard of living and make them "poorer." This is obviously true for people living on fixed incomes or off their savings, but for everyone else, as many studies have shown, inflation translates into higher incomes as well as higher prices, and it typically doesn't have much of an effect either way on people's standard of living.

It's wrong to talk about increasing prices without also discussing increasing wages. What matters is your purchasing power -- how much stuff you can buy with the amount of money you earn. Inflation is only damaging when it rises faster than your paycheck. That's when you lose purchasing power. That's when you become poorer.

But consider this. While food prices rose 1.8% over the past year, average hourly wages increased 2.4%. An average wage buys more food today than it did a year ago. Most people are better off. And yet there's a growing fear, almost paranoia, that rising food prices are pilfering our wallets. Of course, that can happen. In the '70s, late '80s, mid-'90s, and early 2000s, food prices rose faster than wages. But that's simply not happening today. In fact, wages are growing faster than food prices at a rate that's almost four times higher than the 40-year average. Not only did most people gain food purchasing power last year, but they did it at a pretty good clip.

Same holds over longer periods. Since 2000, food prices have increased 34%, but average wages are up 41%. Other areas, like medical care, grew faster than wage growth. An average wage today buys less medical care than it did before -- no arguments there. But if food is the issue, and it has been lately, the inflation fears just don't add up. The average American wage buys more food today than almost ever before. Hold the panic, folks.

Better yet, worry about where you invest your money
It's true that those on a fixed income are losing purchasing power, but this has been true nearly every year for the past century. To the extent possible, and when time is on your side, the goal should be an investment portfolio that's categorically not fixed income. Since the late '60s, inflation has pushed prices 633% higher. This might seem awful, but only if you forget that the S&P 500 increased 4,500% during the same period. Companies with strong pricing power fared considerably better. Procter & Gamble (NYSE: PG) grew over 12,000%. Altria (NYSE: MO) surged about 250,000%. Even Ford (NYSE: F), death scare and all, has returned 3,500% to shareholders since 1970. Inflation has only made you poorer to the extent you allowed it to.

Will real inflation return some day? Of course. Deal with it when it comes. And when it does, keep things in perspective. The economy goes nuts from time to time, but trouble passes. That, too, has been true almost every year for the past century.

Check back every Tuesday and Friday for Morgan Housel's columns on finance and economics.

Fool contributor Morgan Housel owns shares of Altria and Procter & Gamble. Ford Motor is a Motley Fool Stock Advisor pick. Procter & Gamble is a Motley Fool Income Investor recommendation. The Fool owns shares of Altria Group and Ford Motor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.