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If you want empirical evidence I suggest you skip to about 10 min in the video and look at the relationship of the money supply to the inflation rate. All diffe

If you want empirical evidence I suggest you skip to about 10 min in the video and look at the relationship of the money supply to the inflation rate. All different countries with different explanations for their demise but in all cases it's pretty clear that inflation is strongly related to the money supply. "if the treasury department sells bonds on the open market, the federal reserves prints money to buy those bonds, then the treasury department uses that money to pay interest on bonds held by the federal reserve; did anything really happen?" Yes, something did happen, that money created out of nowhere will go somewhere and increase prices. Given that all Americans share the same currency they are on the hook to pay for the interest. And that will either be paid in taxes or inflation

gizmo686 5y ago
He is measuring "quantity of money per unit of output". Those units and ratio are doing a lot of work, to the point where I have no idea what the graph actually represents. I don't mean this in a "how should I interperat that" way. I literally mean I do not understand what is being measured. I cannot reproduce his result using my understanding of those terms: https://fred.stlouisfed.org/graph/?g=NbZe https://fred.stlouisfed.org/graph/?g=NbZe > Yes, something did happen, that money created out of nowhere will go somewhere and increase prices. I intended for that example to be a comically obvious one, that is only a thing because of the accounting that results from the treasury and central bank being distinct entities. If they were the same entity, nothing would change, except for how the accounting was done. The combined entity would have simply printed money instead of printing money and debt to itself, and it never would have bothered record any money being created to service the interest on that debt. Consider a more absurd example. The government prints money and stores it next to its gold in Fort Knox. Other than the costs of mechanically printing, transporting, and storing the bills, does this actually change anything? In reality, most money falls somewhere short of this extreme, but still does not spread uniformly to all sectors of the economy.

gizmo686 5y ago

He is measuring "quantity of money per unit of output". Those units and ratio are doing a lot of work, to the point where I have no idea what the graph actually represents. I don't mean this in a "how should I interperat that" way. I literally mean I do not understand what is being measured. I cannot reproduce his result using my understanding of those terms: https://fred.stlouisfed.org/graph/?g=NbZe https://fred.stlouisfed.org/graph/?g=NbZe > Yes, something did happen, that money created out of nowhere will go somewhere and increase prices. I intended for that example to be a comically obvious one, that is only a thing because of the accounting that results from the treasury and central bank being distinct entities. If they were the same entity, nothing would change, except for how the accounting was done. The combined entity would have simply printed money instead of printing money and debt to itself, and it never would have bothered record any money being created to service the interest on that debt. Consider a more absurd example. The government prints money and stores it next to its gold in Fort Knox. Other than the costs of mechanically printing, transporting, and storing the bills, does this actually change anything? In reality, most money falls somewhere short of this extreme, but still does not spread uniformly to all sectors of the economy.