[erispoe]

Prices are a function of supply and demand, largely. New money being created and spent is only an issue when it durably creates more demand than supply can absorb. This is where inflation happens. With covid we had across the board stimulus that didn't care too much if supply was matching, but we also had supply disruptions everywhere.

This is incredibly hard (impossible?) to do in practice, but imagine that you create new money and use it to buy goods where supply can be perfectly adjusted in regards to demand. Now your money creation has zero effect on prices.

On top of that, a low level of inflation is actually a policy target. Low, but not null, because public policy wants to incentivize productive investment and not hoarding cash. And because deflation is much harder to curb (hello Japan) than inflation for a reasonably developed and productive economy.

[danielscrubs]

Median wealth is higher in Japan than US… it’s not all bad.