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

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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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