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That printing money necessarily leads to inflation is not true in a situation like this. Inflation happens when there's more and more money being used to chase
by jnwatson 7y ago
That printing money necessarily leads to inflation is not true in a situation like this. Inflation happens when there's more and more money being used to chase a finite amount of goods. In our current economic situation, there's a huge pile of money that's not chasing any goods at all.
Like like after the 2008 crisis that didn't lead to inflation, this won't either, as long at they turn off the money printer when people start investing again.
- jjeaff 7y agoThey aren't really printing money. They are buying up debt, both private and government that will eventually be sold back to the market or will mature this returning that money back, with appreciation, to the fed. Which will then make it disappear just as easily as they created it.
- jnwatson 7y agoSure. The Fed doesn't even own printing presses, the Department of Treasury does. However, in this context, "printing money" doesn't mean making physical pieces of paper. It means creating money out of thin air. It does that by buying debt, which, as you note, can be destroyed just as fast as it is created.