Thing is, you're talking about rebates and the like, not prices. Prices are still essentially what they were, but manufacturers and the government are doing everything they can to coax spending by offering rebates, subsidies and trade. I work for a large consumer packaged goods company. We have products in just about every grocery isle there is and we haven't lowered one price. Instead, we spend more in trade against the pricing in hopes it'll spur purchasing. But we can't do this forever, and neither can any manufacturer. Because the prices WE are paying aren't going down (the producer prices). So margin squeezing can only happen for so long.
WTF? We were not on fiat technically until Nixon closed the window on trade partners who wanted to exchange their USD for gold. That is when we officially abandoned the gold standard. Citizens not being able to hold gold has nothing to do with fiat, since the Government was using said gold to back the dollar.