What's causing all the inflation?

Merchants didn't really directly cause inflation, the hack did. The merchants are just making sure their mesos aren't losing value through the inflation by buying up high-demand items, which retain their value as long as there no new quest giving away 60% glove att scrolls to everyone, new 15 att 0 slot glove coming out, etc.

So I don't think they should be blamed for not wanting to lose the value of what they own.

[color="#cc8899"]Basically the scenario is playing out like this -
A few banks start losing their ability to maintain operation, and people speculate that they will close down.

Because of the above, a wider panic begins to spread for all people with bank accounts, and they withdraw their money from bank accounts around the country.

Because of the above, the banks originally not affected become affected, and actually do start losing money.

Because of the above, more people will remove their funds, in greater amounts. Ad nauseum.

The meso hackers started a massive influx of mesos to the economy, and merchants became defensive of their investments and started pouring their mesos into the economy and pulling rare/valuable items from it. Because of this, other merchants and meso hackers upped their ante, buying even more items for even higher prices. Each day more and more mesos are introduced, and more and more items taken out of the economy. It's not going to stop until one group runs out of funds (merchants spend all their money, hackers can't generate more mesos) or the market crashes and there is simply nothing left to buy.[/COLOR]