Wait then nobody has any money
Economists track money locked into different tiers of static assets as different money supply tiers. M0 is the money that gets used to buy your morning coffee, M4 is things like government bonds and housing. There are different tiers in between for things like your car, an assembly line, or a stock.
The reason the rampant money printing of the last decade didn’t effect inflation was due to the money being locked up in the low velocity tiers which have ballooned in size over the last decade. Any event which causes people to liquidate these assets such as war, supply disruption, energy crises, or disease moves inflation higher as the asset battery gets deployed to fight the crises.
Biggest historical example of this was the WW2 where all sides had to adopt measures to counter inflation.
Question: how do they know when money migrates between these tiers? E.g., some of my paycheck goes into an index fund; occasionally an index fund gets liquidated to buy a house, or to pay for a vacation. Is there some "trigger" at certain points that lets these tier estimates get updated, or is it just ad-hoc guessing?
The fed’s estimates can be found here. They should have links to the underlying methods.
https://www.federalreserve.gov/releases/h6/current/default.h...
The other big example is IPO's. Timed well, an IPO sees shares appreciate from their private valuation into a higher amount as they hit the public market.
But yes, once already public, when being sold to multiple buyers, typically you're correct, a sudden increase in supply while demand stays constant does result in prices dropping.