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Printing money and loaning it out is literally monetary inflation.

Money isn’t erased during a bank run. It’s given back to the owners who always had a right to have it. Fractional reserve banking is what erases money.




Printing money is not the same thing as inflation. It could cause inflation, but doesn't have to. And other things can cause inflation too. Inflation is merely the fact that stuff gets more expensive, but that can have many different causes. Excessive money printing is certainly the most notorious cause, but not all money printing is excessive. Sometimes printing money is the prudent thing to do because there's a growing need and therefore demand for money.


The definition of monetary inflation is increasing the monetary supply. That doesn’t need to happen by starting a printing press. It could be someone typing a bunch of zeros on a keyboard somewhere to create new money out of nothing.

I never said inflation was detrimental or harmful (my personal belief is that it is harmful, however), just that adding money to the supply is by definition monetary inflation (the origin of the concept of cost inflation which is what we’re being asked to accept as the true definition). Putting air into a balloon doesn’t mean it will pop; it’s still being inflated. Hey, it’s even more fun for a while ;-)

I was responding to a parent who said printing money isn’t inflation, when it’s the literal definition of, and the origin of the term in monetary theory. It’s not very constructive to conversation to attempt to change meaning of words to make one point or another.


I am sorry and you are correct. I blindly assumed that "inflation" means "price inflation", but you explicitly specified "monetary inflation", which is something completely different (though sometimes related).

My apologies for reading incorrectly. My comment is true only for price inflation.


No one cares about monetary inflation if it doesn't cause price inflation.


M3 is usually the money measure we care about for the real economy and price inflation, not M1.

M3 is erased during a bank run, because the multiplier from M1 to M3 caused by fractional reserves goes away.


where is there any indication that money is being printed for this? if anything trillions have been printed to support the so-called "peasants" (hate that term) that kick-started the avalanche.


Read the parent comment: it states printing money is not inflation. The author either is being disingenuous or doesn’t understand how inflation works.




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