Rick Santelli On Inflation

The other day, Rick Santelli blasted out a rapid-fire indictment of the Fed concerning inflation and commodities pricing.

Essentially, Santelli reminded CNBC viewers that inflation, as Milton Friedman stated, is a monetary phenomenon. It has to do with the quantity of money relative to value in an economy- nothing more, nor less, nor different.

Santelli noted that the Fed is now pointing to falling commodity prices and claiming deflation is a risk, and inflation has been tamed!

Not so, says Mr. Santelli. And he's entirely correct.

He contends that two administrations, Congress and the Fed, having debauched our dollar by printing, borrowing and spending money the US does not have, have sowed the seeds of imminent inflation.

To escape notice of this, the federal government is pointing to the fall in prices of various goods- housing, metals, oil- and claiming victory over inflation, as Santelli contends. And possible deflation, to boot, thus providing cover for the near-zero interest rates.

Of many pundits on CNBC, Santelli is the only one to my knowledge to have pointed out this clever obfuscation by the Fed regarding inflation, monetary profligacy, and commodity prices.