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No. And right now it’s evident that it’s just plain old supply and demand for some of the things in the basket.

Look at a decent intro macro book from college. Money supply can be connected with inflation but it’s not “just” that.




Prices can go up for other reasons. Let's say everybody in town got a raise. The guy at the store thinks: I want a raise too. So he adds 50 cents of profit to the cost of AB&C. People have more money, so they shrug and keep buying just as much AB&C. A manufacturer (sneakier) could put slightly less stuff in a slightly bigger box with brighter colors.


I do have an econ education from a reputable university, so I have some idea of the traditional narrative. But inflation in particular always seemed a bit poorly explained to me (obvious printing-money cases aside), as evidenced also by the fact that people are always arguing about whether it is even occuring. Where specifically is my analysis wrong?


Again, prices can go up for reasons unrelated to government activity or the money supply.


My analysis can also account for eg supply chain failures: if the overall supply of goods and services in the economy is reduced, that translates to the expected government revenues as well, and therefore yields on government debt.

Obviously there are various effects at play; but given the structure of the monetary system, I posit that all these effects are in fact mediated by the Fed's balance sheet and Treasury debt.




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