Originally Posted by
TransWorld
More Dollars X Lower Velocity of those Dollars = Essentially Unchanged, thus NOT a cause of inflation.
Most of those extra government payments went to savings or paying down personal debt. They did not go to extra spending. My investment management firm presented clear graphs that show this. (Unfortunately I am not permitted to reproduce them here.)
If money supply increases faster than real output, it will cause inflation. In other words, If there is more money chasing the same amount of goods, firms will just increase prices.
Does that sound familiar right now?
Hyperinflation is a totally different topic. Price of a good increases 50%+ in a day will never be the result of the feds printing too much paper.
If we have a shortage of goods, resulting in consumer panic (mom buys 15 gallons of milk on single grocery run due to fear of supply shortage) that could create a hyperinflation event. We are currently having supply issues, and it’s getting worse, that’s what I’m more fearful of.
Thankfully, the last time we had morons hoarding toilet paper in fear, a shortage in supply wasn’t actually an issue.