[jyounker]

Inflation in our circumstances isn't due to an increase in the money supply. Here's why:

* Aggregate demands isn't too much different from before the pandemic. * Demand for services has fallen into the toilet. * Demand for goods has gone through the roof.

This massive reallocation of resources from one portion of the economy to another has created a situation where demand for goods far outstrips supply. Therefore we have inflation. (Increases in food prices are caused congestion in the labor market.)

This is not about US economic policy. You can see this by looking at inflation rates in Europe (and specifically Germany). These countries have very different economic policies than the US, but their inflation rates pretty much track what's happening in US. Therefore it is a common effect driving inflation in both places.

[neffy]

Perhaps have a look at recent US money supply behaviour before you get too confident on that one. The EU´s is not much better.

https://fred.stlouisfed.org/series/M2SL

[jyounker]

What's the point? Other countries have widely diverging monetary policies from the US, but they're undergoing the same inflation spikes in the same areas of the economy. If the money supply was the cause then we'd expect to see these diverge, and they're not.

On the other hand we've had months of prices yo-yoing across the economy, both rising and falling. If it was about the money supply then we would not see price decreases following many increases. (e.g. lumber costs a few months ago.)

We also having diverging demand for goods and services.* If it was just about the money supply, and not a demand imbalance then we'd see increases in both demand and cost for services, and those matching increases don't seem to be there.

*See page point 9, page 12/16 of https://www.brookings.edu/wp-content/uploads/2021/09/COVID-F...