The second sentence is in question. In free market merchants compete. A merchant to rise prices need to be a monopoly. This is what I am finding. "Merchants often adjust prices based on their costs and market conditions. While they may raise prices in response to increased costs, many have also been accused of price gouging, maintaining high prices even when their costs decrease. For example, companies in the diaper industry have kept prices high despite a drop in production costs." But I will quote Cantillon again: "Cantillon provided an advanced version of John Locke's quantity theory of money, focusing on relative inflation and the velocity of money. Namely, when you print money, it causes more pounds to chase fewer goods, pushing up the average cost resulting in inflation."

Well, if you've accepted the cantillion effect, you're well underway. I would refer you to rothbard's "what has the goverment done to our money" for further understanding.