> If you print 10% more dollars all dollars are 10% less valuable, all things being equal. Tell that to Japan which has an increase in money supply but bouts o

> If you print 10% more dollars all dollars are 10% less valuable, all things being equal. Tell that to Japan which has an increase in money supply but bouts of decreasing prices (deflation): * https://fred.stlouisfed.org/graph/?g=PA7P https://fred.stlouisfed.org/graph/?g=PA7P Just having a pile of money does not mean much: > But also – why do so many people insist that inflation is an increase in the money supply? This makes zero sense. Here’s why – our economy is mostly a credit based economy. So, if I take out a loan for $100,000 then the money supply has technically increased by $100,000. But what if I don’t actually tap that loan? What if I borrow the money because, for instance, house prices just went up 25% and I want to have some cash around for emergencies? This doesn’t tell us anything about prices, living standards or really anything. But this is what so much of the money supply represents – money that has been issued and is just sitting around unused. Why is this useful? It’s like calculating your weight changes by counting how much food you have in your refrigerator. No. That’s potential calories consumed and potential weight gain. The amount of food in your fridge tells you little about your future weight changes just like the amount of money in the economy tells us little about the actual price changes in the economy. * https://www.pragcap.com/three-things-i-think-i-think-i-see-dead-mutual-funds/ https://www.pragcap.com/three-things-i-think-i-think-i-see-d... Pre-pandemic people were complaining about inflation rate in the US being too low, even with a rising money supply: * https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL Money hasn't done much in the US for the last few decades: * https://fred.stlouisfed.org/series/M2V https://fred.stlouisfed.org/series/M2V