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> Inflation is an increase in the money supply.

Nope. http://en.wikipedia.org/wiki/Inflation "inflation is a rise in the general level of prices of goods and services in an economy over a period of time."

An increase in the money supply is an increase in the money supply. If the increase matches other factors, all is generally good. If it doesn't bad things happen.

> Rising prices are a side effect of that increase.

Rising prices are inflation. They happen when the money supply increases faster than the relevant function of wealth and "velocity".

> When the fed lowers interest rates they in effect increase the money supply through the expansion of bank credit which is the primary means by which money is introduced into the economy.

"the primary means"? The fed discount rate isn't that effective at affecting the money supply; it has a marginal effect. If it was an effective means, they'd have used it. Instead, they're printing money.




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