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It is true that the growth of money supply in excess of the growth in money demand causes inflation - by definition. This is when we see the price of most goods rise by roughly the same percentage.But price increases may also be caused by shifting market fundamentals - if supply decreases relative to demand. This is when we see some goods skyrocket while others experience little change or even negative change. This is also why fuel and food prices - among the most volatile - are excluded from official estimates of inflation.Yet arguments in the media and on these boards rarely fail to point a finger at Bernanke's loose monetary policy as being to blame for the rise in food and energy prices.Supporters of Lyndon LaRouche and Ron Paul dismiss the possibility of market forces altogether by stating that "real inflation" is much higher than official estimates.Is this a lack of education, or a by-product of populism?
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