>Oil does not cause inflation But increased demand often increases prices. You're talking about monetary inflation, but remember there's also price inflation. If some good, x, is more sought after and the supply doesn't increase, as with oil, the price will go up. Oil was $20/barrel five years ago and hit $100 recently.

As david927 pointed out, I should clarify that I was talking about price inflation.

Now that I think about it though, Dauntless' comment about hyperinflation was probably talking about what you say... monetary inflation (where monetary unit has less value)... so just ignore my comment.