Forget the King Canute view of inflation. It’s time for a better approach.

In the US, M3 [the money supply available to the economy] was rising at an annual rate of 24 per cent late last year, falling back to a mere 13 per cent in the latest numbers. In the UK, M3 was rising for a time at 13 per cent a year, subsiding to around 7 per cent.

The transmission mechanism…