[rayiner]

That’s not accurate for two reasons. First, the dollar isn’t just a medium of exchange, but a medium for storing value since it’s the reserve currency. Second, a dollar can get spent multiple times so there isn’t a direct relationship with the amount of economic activity as you suggest.

[jack_h]

I don’t disagree with your first point, but your second point may have been a misunderstanding of what I said or I don’t understand what you’re saying. I’m not suggesting when you spend money it goes away and can’t be used again. I was more suggesting the M0/M1/M2 money supplies change in size which is distinct from GDP size, although I admit that is a simplification.

[rayiner]

Gotcha. I thought you meant it was a 1:1 correlation. My mistake.