While the two are highly correlated and monetary inflation is typically the primary cause of price inflation, a change in monetary inflation (dx) does not immediately nor exactly manifest themselves in precisely the same change (dy) in general price inflation.
Well, except historically it has and recent years are no exception. Fed prints money; speculators take new money and buy commodities futures on margin to hedge against a million other speculators doing the same thing. Monetary inflation begets price inflation.
If you are buying barrels of oil on the international market with US dollars and increase the supply of dollars 100%; the cost of oil has to at least double so the producers aren’t selling at a relative loss. That’s economics 101. Hence I’m not impressed with supposed ‘rallies’ in anything that lags the rate of M3 inflation.
