An exercise I like to do sometimes when trying to spot the difference between price inflation and monetary inflation is measure the price using something else.

For example, a decade ago my house cost $400k Also a decade ago a carton of eggs cost $2 Today my house is worth $800k And the carton of eggs is worth $4

In other words, they both doubled in price. Coincidence? Did the eggs change? Probably not. Did chickens change? Probably not. Chicken farms? Nope.

In other words, in 2013 my house cost 200,000 cartons of eggs. And in 2023 my house still costs 200,000 cartons of eggs.

Now I get this isn't a perfect measurement. The actual price of eggs does fluctuate with supply and demand. Housing prices fluctuate with supply and demand in the short term.

But it does put into perspective how much of price inflation is due to the expansion of the money supply vs supply and demand.

(turns out eggs make a pretty good unit of account but they're a terrible store of value)