>With the FED and Monetary Easing the total amount of dollars in the economy is increasing Not true. QE is a swap. Take away a bond, replace with reserves.

>With the FED and Monetary Easing the total amount of dollars in the economy is increasing Not true. QE is a swap. Take away a bond, replace with reserves. No net change. If anything it's deflationary, as the bond yields more interest than reserves. Even if the amount of net financial assets in the private sector does increase, it doesn't necessarily follow that the purchasing power of the dollar decreases. It all depends on the capacity of the economy to absorb the extra spending. If there is excess capacity that is mobilized by the extra spending, you get more dollars chasing after more goods. If there is no excess capacity, you get more dollars chasing after the same amount of goods.