Lol so according to you the money supply can increase 10x but as long as the cost of apples (or things in the CPI basket) is same, there is no inflation. Am i right?
I think you are trying to say that CPI and Inflation are the same thing.
I think you are trying to say that CPI and Inflation are the same thing.
> I think you are trying to say that CPI and Inflation are the same thing.
I think you are trying to say that money supply growth is inflation, it is not. Even the rejected Austrian school would agree.
The supply did grow and the money went to banks, to the US government, etc. You can look at the Federal Reserve’s balance sheet and see entries for US treasury bonds, mortgage backed securities, etc. The US government then went and spent that on things, and the value of mortgage-backed securities increased which decreases the return on the investment and thus encourages banks to take on higher-risk investments. These activities drive inflation. So, no, an increase in the amount of money isn’t inflation, but a higher quantity of money supply times velocity does, by definition.