[barry-cotter]

> it becomes a self-reinforcing perpetual motion machine.

Only until expectations catch up with the reality of the money supply. If there isn’t enough money in the business’s account to pay that 13% raise people get fired or the contract gets renegotiated, or the business goes under.

[pcai]

once inflation is embedded in the economy the velocity of money matters more than the supply, because the sticky price effect causes a spiral.

there will be enough money in that business's account because they will do the obvious thing and increase prices by 13% - after all, their costs are up and their customers are making more money so they can easily absorb the increase.

here is a simplified illustration of the phenomenon https://archive.nytimes.com/krugman.blogs.nytimes.com/2008/0...