Sandzak wrote:@Steve_American There are now 4 times more dollars in circulation then 2000. From Bitcoin we know a currency has to be in circulation to be something worth.
Due to globalisation has the international trade increased in the last 2 decades, so the need for Dollars.
Could this be an explanation why we do not see hyperinflation, although more money got printed?
1] The US has not printed 4 times more money.
. . a] Because selling bonds to deficit spend, does not add dollars in circulation. The dollars in the bonds are saved.
. . b] Many or even most of the dollars that have been added to the money supply were added by banks making loans.
Source is ==> https://www.sciencedirect.com/science/a ... 1914001070
In its Abstract it says, "This study establishes for the first time empirically that banks individually create money out of nothing. The money supply is created as ‘fairy dust’ produced by the banks individually, "out of thin air"."
. . . . So, banks create dollars with every loan.
. . c] All of the dollars created by bank loans are deposited into bank accounts. They are not in the form of paper dollars.
. . d] The only way the the MMT combined US Treasury and Fed. Res. do sort of 'print money' is done by the Fed. buying US bonds on the secondary market with dollars that the Fed. creates out of thin air. But again, these dollars go into bank accounts.
Everyone, please note, that MS Econ. doesn't track bank loans as adding to the money supply, but does accuse the Gov. of adding to the money supply when it sells bonds to deficit spend. Partly, this is because MS econ. has factored banks out of their theory.
Again, I assert that dollars invested in US bonds are not really in the money supply any more than dollars in savings accounts. Neither sort of dollar can add to inflation. At least, not more than, very little.
In summary, most of the increase in the money supply since 2000 was added by banks making loans. It was not added by the US Gov. deficit spending. Some was added, maybe, by the Fed. buying US bonds from persons.
Again, MS Econ. predicted in 2008 that austerity would cause people to spend more. That this spending would end the Great Recession. It didn't because the people didn't have the money to spend, and they could not borrow it, because banks were not making loans to anyone who lacked 100% solid collateral.
. . .It didn't matter that the people were not afraid of higher taxes 10 years down the road, they could not spend 'today' because they didn't have the money 'today'.
. . . MS Econ. is just stupid.