But gas costs so much at the pump! Another in my series on Ron Paul and the Gold Standard

How much of the higher price of gasoline is the Fed's fault?

To a first approximation, zero. Oil is priced in dollars in the international market. The falling dollar has no effect on the price of oil. And inflation is a tiny contributor to the huge increase in gasoline prices. The huge increase is due to the fact that a lot of people want to consume oil, but producers have been slow to supply additional quantities. When demand goes up and supply doesn't, prices rise.

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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