My Letter to the Wall Street Journal re: The Real Cause of Higher Prices

re: Food, Energy Push Up Consumer Prices

Dear Sirs:
The title of your lead article about rising prices repeats the discredited economic theory that overall price inflation is caused by rising prices in certain segments of the economy, the so-called "cost-push" theory of higher prices. This is a circular argument. Higher prices are the result of one or both of only two phenomena--higher spending due to expansion of the money supply or lower product output. The Fed's irresponsible expansion of base money, through its QE1 and QE2 debt monetization programs is fueling commodity inflation first. It will spread to the rest of the economy eventually. Stopping higher prices requires only one thing--stopping the monetary printing presses.

Patrick Barron