[NeoCaveman]

Well of course inflation is always and everywhere a monetary phenomena.

But if a currency is declining vis a vis other currencies it's probably a sign that there's too much of that currency sloshing aroung.

No, high prices do not cause inflation, inflation causes high prices.

[Plymouth Sentinel]

Actually, inflation is caused by too much money. Asset price inflation is caused by credit expansion, then procyclical behavior among those who extend credit, then by phenomena such as risk shifting (See Allen and Gale) and animal spirits.

[xusafflyer]

"it's probably a sign that there's too much of that currency sloshing around"

We had a discussion about the rates in another article yesterday. The over use of exotic loans by people who had no business taking loans is coming back to bite us. The aggregate economy itself is taking a hit from the loan industry. Its going to be a rough 2007 because the rates are not coming down. The fear of inflation is too great.

[Toddsterpatriot]

But if a currency is declining vis a vis other currencies it's probably a sign that there's too much of that currency sloshing aroung.

Or too little of the other currency.