So, I was talking with my girlfriend about inflation and told her that prices are going up and she said that its because gas prices are going up, thus increasing the price of all goods. I then brought up the prices of precious metals and asked her what the reasons were for that trend, because I don't see oil having any relation with those prices. She didn't have an answer; however, many liberals would say that the price spike of precious metals is derived from people who are fearing inflation. But what are other commodities, products, etc that are increasing that have very little relation with oil prices?
Ah yes, the ol' "prices are rising because of rising prices" shtick.
Addressed many times..
Oil Price Rises and QE2
Rising oil price causes inflation!
Where is the Inflation?
Will An Oil Price Fall Push Inflation Down?
Gasoline Prices list
I don't see the fact of rising oil prices as necessarily at all contradictory with money supply inflation as the root cause. Since oil is a non-specific commodity vitally complementary to many modern production processes, the effect of anticipated monetary inflation might well have an effect first on oil futures before through a chain of causation causing price rises in concomitant products affecting consumer goods products. in fact, I think this may be the process by which inflation often does reach consumer goods.
"When the King is far the people are happy." Chinese proverb
For Alexander Zinoviev and the free market there is a shared delight:
"Where there are problems there is life."
Even with the technical revolution of the past 30 years, the economy still depends greatly on energy in particular energy from oil in the forms of gasoline, diesel and jet fuels. So the rate of increase in the price of oil only indicates the level of misery generated by previous inflation and is not inflation itself. Unfortunately the inflation was already created when the central bank previously loaned money into existence.
Also unfortunately the accounting from previous inflation is already done as well meaning that the wealth transferred in the creation of the new money has already happened and those holding currency are necessarily worse off while those getting the new money are better off.
Would increased energy costs not also drive up the cost of production and distribution? If you are only considering the US you must consider that bank credit and oil are tied together in the eurodollar system and the petrodollar system. It kind of is hard to say which comes first. Bank credit expansion and eurodollar expansion are dependent on the world demand for oil through the petrodollar system and the price of the oil is dependent on the bank credit expansion of which is measured the demand for oil.
Thanks for the list John James.