I'm guessing this is all related to this?
https://www.cityam.com/almost-a-fifth-of-all-us-dollars-were...
https://www.cityam.com/almost-a-fifth-of-all-us-dollars-were...
Inflation is roughly defined as more dollars chasing the same quantity of goods leading to price increases. It's clear how printing more money would lead to that, but what if the Fed prints more money and it just sits in bank accounts? Hence the velocity component -- people need to actually spend the money for inflation to come into play.
The confusing thing now is that since the US has been in a liquidity trap for a long time, velocity isn't even the right measure. This is a mirror of what happened in Japan in the 1990s and is still happening today;
https://www.brookings.edu/wp-content/uploads/1998/06/1998b_b...
> 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-d...
It actually has to be used, which it generally has not been:
* https://econbrowser.com/archives/2021/11/so-you-want-to-be-a...
maybe it comes down to where does it need to be used (as in which level, capital investment and other long-term assets in contrast with consumer goods)?
This money is quickly finding its way to consumable (and other rent-like) purchases, so now it does trigger inflation whereas in the time around 08 the end consumption was not really affected (it is now because pandemic)
If this is not the case, the reasoning is counterintuitive.
I thought that in 2008 but we had a decade of low inflation.
If they hadn't printed all that money, a lot of prices would have stayed flat - and perhaps a lot more folks would feel much richer right now.
Actually globalisation has plateaued over the last decade.
https://www.economicshelp.org/wp-content/uploads/2019/03/wor...