Wow, just wow. What a great piece of analysis and writing. It's extremely impressive.

I was aware of Trinidad's economic relationship with oil. My wife and I once considered moving to Tobago and researched the islands extensively.

What research never gives you, is the first hand experience of someone living in that reality. What it actually feels like to live in a "boom/bust" economy.

Your account was illuminating and insightful.

I'm not so sure I agree with how you are visualizing and describing inflation and interest rates. Here's my understanding. Feel free to critique.

1. Inflation, everyone agrees, is too much money chasing too few goods. It's an imbalance between supply and demand.

2. This situation can happen for several reasons.

The most common experienced in modern economies is governments injecting too much money into the economy. "Inflationary Spending". Resulting in a temporary imbalance between the amount of money in circulation and the supply of goods.

Another common reason is the one you detail. A "Boom Economy". A sudden massive increase in the money supply resulting in a temporary imbalance between the amount of money in circulation and the supply of goods.

Lastly, there is the scenario of "scarcity". While the money supply stays constant the supply of goods contracts. So, once again there is an imbalance between the amount of money in circulation and the supply of goods.

3. The result of that imbalance causes prices to increase. Sometimes explosively.

An example being the price of used cars the last few years. There was a massive contraction in the car supply so the price of cars shot up.

4. Economists hold that inflation self corrects over time in a healthy economy.

Because, it's all about Supply vs Demand with Economists. If prices go up due to supply shortages, this encourages the development and growth of new supplies.

If the demand for solar panels is high, and there aren't enough. The problem will self correct and prices will decline as new factories come online.

If you live in a Boom Economy and prices are high, that incentivizes suppliers to increase the supply of goods. Eventually, the theory goes, balance will be restored.

5. Unless Supply is Inelastic.

If every billionaire on Earth wants a Di Vinci, the price of Di Vinci's is going to soar and never come down. It's why land is supposed to be the ultimate investment. "They aren't making any more". - Will Rodgers

So, can we agree that inflation is basically caused by an imbalance between money supply and supply of goods?