[SpaceRaccoon]

> Printing money does not create goods and services - it merely decreases the value of each dollar relative to everything else.

Consider that during a recession, factories have surplus capacity to produce more goods. But people don't have money to spend, so the factories don't use that existing capacity, or increase their capacity.

Printing money can stimulate demand and thus increase production of goods.

> If I had a machine that could create an unlimited amount of gold at zero cost, the price of gold would approach zero if I made and sold enough of it.

Well, they haven't created an infinite amount (yet). What if the demand for your watches grows as fast as your machine can produce them?

> why does the monetary base increase?

Has inflation kept up with the growth of the money supply?