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GP wasn’t stating that a larger stock of cash is definitively not a parameter of inflation, but that it is not the only parameter. As to your question about th
by diatone 5y ago
GP wasn’t stating that a larger stock of cash is definitively not a parameter of inflation, but that it is not the only parameter.
As to your question about the other factors, here’s a thought experiment: if I printed cash daily but locked it up in a chest and sunk it to the bottom of the sea, will there be inflation? Going one step further: does inflation depend on the distribution of liquidity in the economy?
- lowkey 5y ago> As to your question about the other factors, here’s a thought experiment: if I printed cash daily but locked it up in a chest and sunk it to the bottom of the sea, will there be inflation? Going one step further: does inflation depend on the distribution of liquidity in the economy? In your thought experiment No it would not impact inflation, but in the real world over the past year we have begun to see rates of inflation not seen in 40 years. Inflation is running at 3x the Fed’s target at a time when the Fed’s money printer is creating trillions of US dollars out of thin air. In September 2021, anyone diminishing or dismissing the impact of money printing on inflation is being willfully ignorant or intentionally disingenuous.