[dd36]

For money supply to be inflationary it has to increase demand or reduce supply for a given product.

It sounds neat but there’s little evidence of that occurring on more than a temporary basis during covid. But covid also caused supply shocks.

It seems that what happened is covid showed companies what they could get away with both because of decades of consolidation and because of new ways of colluding.

[greyface-]

More dollars in circulation chasing the same supply of products = increased demand for those products, in dollar terms. I'm not looking specifically at the COVID spike (which, indeed, seems to be over from a monetary policy perspective), I'm looking at the longer term continuous exponential increase in money supply.

[dd36]

But those extra dollars aren’t with consumers. Otherwise, yes. That’s where the money supply causes inflation argument falls apart — at least for this case.

[greyface-]

Maybe not at T=0, depending on how you look at money creation. But the "extra" dollars, wherever they originate, will eventually be spent, and will eventually diffuse out to every part of the economy. We're not printing trillions of dollars, locking them in a treasure chest, and burying them deep underground so that they may never move.