Try this quote out from the latest Credit Bubble Bulletin from Doug Noland (emphasis mine):

Crude oil closed today above $126. The most vitally important commodity in the world has now posted a stunning year-to-date rise of better than 30% and has now doubled in the past year. It is worth noting that during the ten-year period 1996 through 2005 crude averaged about $29 a barrel. It’s now at four times this level - and running.

I don’t believe it is mere coincidence that crude has posted about a 30% y-t-d price surge at the same time as international reserve positions have expanded at about a 30% annualized rate - to a stunning $6.769 TN. Over the past 4 ½ years, official international reserves have ballooned an unprecedented $3.921 trillion, or 138%. During this period, crude prices surged almost 300%. Chinese reserves ballooned more than four-fold over this period to $1.68 Trillion; India’s reserve position tripled to $303bn; and Brazil enjoyed a four-fold increase to $189bn. After beginning 2004 at $73bn, Russian reserves have almost reached the half Trillion mark ($493bn). And in just the past year, OPEC reserves have inflated 42% to $490bn. To be sure, the world is awash like never before in excess “liquidity” for which to bid up prices of critical tradable resources.

http://www.prudentbear.com/index.php/CreditBubbleBulletinHome

Mish, whom I respect in some ways, is fixated, to the point of being blinkered, on the belief that we *must* face deflation.

The evidence to the contrary is pretty clear. A more than doubling of the central bank reserves in the past 4 years tells us that the global check kiting, circle jerk scheme being operated by the world's central banks is running at full tilt.

In my mind ANY analysis of prices has to include the growth in monetary aggregates and the best place to track those, at least tangentially, is in the reserve assets of central banks...

/I'm an inflationist
//Have a hard time believing that Bernanke won't continue to do exactly what he's said he will do and has been doing.
///3,800 failed currencies from history all died from inflation, not deflation...
////Our leadership is as morally weak as any that ever existed.

I just ordered some paint from a US company and the list price ran to just over $605 (including discounts) plus a 19% shipping charge (par avion Canada). The 19% I felt a bit on the extortionist side so I gave them a call and queried them on it. The upshot was that I got a return call shortly after to tell me that my total would be $599 including shipping. Brian, I don't know what you want to call this, maybe 'enlightened price decrease' would suit you or could we possibly use that old standby 'J'exige deflation!' for what occurred, anyway it's something that I think will be gathering vogue. (Only problem is who's going to be left with the bucks to benefit by that process?) I think any buck saved now will have a lot more purchasing power in the future. Save that pretty penny and you may end up feeling as bright as one:)

BTW if existing capital were to be destroyed at a rate of 18% while and the same time money supply were to grow at 17% what have you got? I think you got trouble with a capital T and that rhymes with Bubble here in Deflation-River City.

What you said is complete gobbledegook. Unemployment has nothing to do with money supply.

It's really simple math. If you inflate the money supply by 100%, you're going to have prices increase by about 100%. If you inflate the money supply by 1000%, prices will increase by 1000%. It wont be exactly 1000%, for a variety of reasons, but the money supply is the primary factor.