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There is no such direct causality. The value of a currency (in the sense of exchange rates and prices of goods) is determined by supply and demand, and nothing
by nhaehnle 12y ago
There is no such direct causality. The value of a currency (in the sense of exchange rates and prices of goods) is determined by supply and demand, and nothing else.
People with the mindset of "USD government printing money => value of USD goes down" have been predicting QE-based inflation for years, and they were wrong. When you drop this incorrect mindset and adopt the correct one (supply and demand!) it's easy to see why: QE did not make people richer, so it did not lead to the kind of significant increase of demand that would be required to trigger a rise in inflation.