The Ludwig von Mises Institute is an exceptional online resource for economic facts and analysis. If you want to cut through the lies and distortions peddled by governments and central banks, go to Mises.org.
We are also big fans of thier sister site, LewRockwell.com, which often links to Mises articles as well as providing some of the web’s best alternative media journalism. Note that Ron Paul is a daily reader of LewRockwell.com. That means you probably should be too.
Frank Shostak’s Commodity Prices and Inflation: What’s the Connection? supports our conclusions regarding oil and commodity price increases. Relevant excerpts from Mises.org:
“Please note we don’t say, as monetarists do, that the increase in the money supply causes inflation. What we are saying is that inflation is the increase in the money supply.”
“Real incomes of wealth generators fall not because of a general rise in prices but because of increases in the money supply. When money is expanded – i.e., created out of “thin air” – the holders of the newly created money can divert to themselves goods without making any contribution to the production of goods. As a result, wealth generators who have contributed to the production of goods discover that the purchasing power of their money has fallen since there are now fewer goods left in the pool – they cannot fully exercise their claims over final goods since these goods are not there.
Once wealth generators have fewer real resources at their disposal, this will obviously hurt the formation of real wealth. As a result, real economic growth is going to come under pressure.
General increases in prices, which follow increases in money supply, only point to an erosion of real wealth. Price increases, however, didn’t cause this erosion.”
“Particular sufferers will be those depending on fixed-money contracts — contracts made in the days before the inflationary rise in prices. Life insurance beneficiaries and annuitants, retired persons living off pensions, landlords with long-term leases, bondholders and other creditors, those holding cash, all will bear the brunt of the inflation. They will be the ones who are “taxed.”
“It is not possible for increases in the price of oil to set in motion a general increase in the prices of goods and services without corresponding support from the money supply.”
“To avoid being blamed for the nefarious consequences of inflation, the government and its henchmen resort to a semantic trick. They try to change the meaning of the terms. They call “inflation” the inevitable consequence of inflation, namely, the rise in prices. They are anxious to relegate into oblivion the fact that this rise is produced by an increase in the amount of money and money substitutes. They never mention this increase. They put the responsibility for the rising cost of living on business. This is a classical case of the thief crying “catch the thief.” The government, which produced the inflation by multiplying the supply of money, incriminates the manufacturers and merchants and glories in the role of being a champion of low prices.”
Bold emphasis added, italics in original. Don’t forget to bookmark Mises.org!