| No, inflation has to do with the price of goods and services. Inflation is defined as "a general increase in prices and fall in the purchasing value of money". Inflation can be caused by many things: reduced supply, increased demand, expectation of future price increases, degradation in the quality/desirability of alternative products (eg bond yields), and, yes, an increase in the amount of dollars chasing an asset class/product/service. Re: your original question, to be a bit pedantic, the supply of money on its own cannot cause inflation in consumer goods except via extremely odd channels (e.g., inflation expectations). A trillion dollars sitting in a bank account has approximately no effect on prices. Like a bullet in a chamber, money at rest has no effect on consumers' experience of inflation until it's propelled forward. But it's important not to conflate causes with definitions. Also, attributing causes of inflation to particular instances of inflation is often extremely and inherently political. The inflation we've seen in consumer goods is a complex phenomenon with many disparate causes. Beware of anyone selling you a "just-so" story for the cause of inflation in a few dozen disconnected goods and services. Especially if that story aligns perfectly with their ideology/product/investment/political campaign. And even more especially if they start the story by conflating one possible cause of inflation with the very definition of the thing. |