Forgive my ignorance here, but I'm not sure I understand this graph. I'm not a math genius or economics genius, but I thought inflation was a rise in prices due to an increase in the money, which is obviously not what we see graphed here. How is inflation defined in this graph?
Inflation in this case is the increase in the supply of money (sometimes called money supply inflation).
At the point where the graph indicates 10% it means the money supply is growing at 10% annualized rate at that point in time.
It is sometimes useful for people to be specific (price inflation vs money supply inflation). Obviously both "sides" believe their definition of inflation is the right one but it always leads to confusion and/or fights. If everyone simply used the terms price inflation or money supply inflation it would always be clear.