[wahern]

> 1. inflating the money supply[0] has a usual consequence of price inflation[1].

Except this hasn't been the case for well over a decade in the U.S., and for several decades in Japan. The money doesn't trickle down, it just sits in reserve because nobody wants to invest it in capital goods, labor, etc.

And monetary policy doesn't even seem to be the primary culprit of asset inflation. Profits sit in reserve, too, and the past 15+ years of global profits have been enormous.

Say what you will about Elon Musk's financial profligacy, but the man plows money into capital goods and labor. And the fact that he's plowing other people's money is what makes it so laudable. We need more salesmen like him who can convince investors to actually invest.

[blevo]

The FED did something different the last recession. The "last 15 years," as you say, have been different because the FED started paying interest on excess reserves. This is the reason for the new money to just sit. It provides incentive NOT to lend, a risk free return for the commercial banks. It has counteracted the loose monetary policy.

this has been the reason we haven't seen the usual price inflation from QE

This same factor (FED giving interest on excess reserves) can also account for profits sitting in reserve.

But I suppose now it seems like I'm arguing both ways... (Inflation! & NOT Inflation!) I'll have to take a step back.

+1 on Elon Musk, or at least the sentiment you described

[MiroF]

I don't know what this means - investors are on a constant search for yield especially now and that has taken them into riskier assets. The trend of the last decade is exactly opposite what you are saying.

That said, you are correct that rising money supply doesn't automatically translate into rising prices