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by onelastjob 1766 days ago
You can only print so much money though before the dollar becomes worthless, so there is an opportunity cost since you can't print infinite dollars
1 comments

Except we don't just print money and give it away. The money is borrowed (backed by some asset), and this distinction matters. IOW, the money that gets printed is (generally) non-inflationary.

Stop using what you learned in your Econ 1XX level courses to try and reason about government spending and money operations, especially, US government spending and money operations. What you learned is not applicable.

Seems like inflation is skyrocketing to me. Specifically asset inflation. Housing prices, stocks, bitcoin, etc. Basically dollar becoming worth less against these assets thanks to QE.
House prices are a real issue, although I don't think that's only because of increased money supply.

Otherwise, does it matter? What's the impact on ordinary people if bitcoin is worth 100 or 1 mio dollars? Notwithstanding the fact that the number of people actively buying financial assets has gone up a lot in recent years, which is bound to increase prices.

Dollars being worth less is obviously true. The well-defined link to this being a result of QE is less clear.

I keep hearing that it's supply shortages due to covid and wage increases due to unemployment aid.

Who knows if that is true, either.

There is no such thing as asset inflation. If the price of assets is going up, then they are going up. It sucks that housing is considered an asset (it shouldn't, it should be a consumable) but that is the long and short of it. And you can't have an average 2% inflation target and underperform that target for a decade+, then complain when there is inflation above 2%(which is transitory and caused by simultaneous demand and supply shocks due to covid).
Government debt isn't guaranteed by anything, expect by the promise that it'll be paid back (although it won't be). Commercial banks can also borrow money that is guaranteed by government instead of being backed by any asset. Expanding the money supply always causes money to lose value.