The main purpose of money is to provide a transaction medium. So that we can negotiate contracts and trade things without barter. This function requires money t

The main purpose of money is to provide a transaction medium. So that we can negotiate contracts and trade things without barter. This function requires money to act as an artificial store of value. However money doesn't have intrinsic value in itself so if people start to put too much faith into this paper, it can replace more tangible market based stores of value such as stocks, bonds commodities etc., those that are backed by real economic activity. When real economic activity is replaced by a government "paper" store of value, you get unemployment and sub potential production. Right now in many places, Europe in particular, interest rates are artificially high, yes they are near zero but zero is high when the alternative private investments would be in the negative in risk adjusted, inflation adjusted term. That is why corporation and banks tend to hoard cash. Cash is kept artificially more valuable than market investments. It is critical in these situations to have slightly higher than normal inflation to allow central bank real rates to be more negative and closer to market rates for stores of value. When central banks don't cause enough inflation, they are subsidizing holders of money and money like instruments to the detriment of those who invest in things that are tied to economic activity. They are subsidizing economic idleness, they are keeping an artificial store of value worth more than free market investments and this creates gridlock in the economy.