2 ms·
Supposedly the total M2 in the US was around $15T last year. The Federal Reserve dumped $4T more (or 26%) into the economy, bringing us up to $19T. How does t
by jchook 6y ago
Supposedly the total M2 in the US was around $15T last year.
The Federal Reserve dumped $4T more (or 26%) into the economy, bringing us up to $19T.
How does this not impact inflation? If you have more dollars representing the same real value, doesn’t that make each dollar worth less of it?
- throw0101a 6y ago> How does this not impact inflation? Ask Japan. Their M1/2 has growth bigly over the last few decades and they've had next no inflation. Remember, the 'general' equation is: Inflation = Money_supply x Velocity. Yes, there's a big tank of money sitting around, but it's not sloshing around the economy that much. And if it does start, there's at least one tool to cool things down: raise interest rates.
- helen___keller 6y ago> If you have more dollars representing the same real value, doesn’t that make each dollar worth less of it? Strictly speaking, inflation is defined by price/quality of baskets of goods, not by a measure like M2.