The money supply should track the economy. If the economy expands, the money supply should expand. If the economy contracts, in a secular way and not a cyclica

The money supply should track the economy. If the economy expands, the money supply should expand. If the economy contracts, in a secular way and not a cyclical way, the money supply should contract. Inflation is not bad per se. It's necessary, as others have pointed out, to prevent incumbents from being pointlessly enriched by rents. What's bad is monetary inflation that raises the prices of everything. This means the growth in the money supply is outstripping productivity growth. We appear to be tipping over into monetary inflation after four decades of good monetary policy. The last time this happened it took ten years to sort out.