In this crisis the money supply has already increased far more than during the last crisis. But it's hard to say when this will produce inflation because we're still in the midst of a demand shock and a collapse in oil prices.
More money creation doesn't necessarily mean higher consumer prices. But, if production is falling while consumers use their stimulus checks to buy food and clothing, we could see noticeable price inflation.
Although the money supply has greatly increased, accompanying growth in production has it possible to keep the current system of immense debt increase going for a long time.
Government restrictions on production are driving prices up as unemployment drives them down. It's impossible to say now whether price inflation or price deflation will be the predominant factor in the crisis's next phase.
Central bankers think too much saving is a problem that must be solved with more money creation. But the real problem is the Keynesian-style fractional reserve banking system.
02/17/2020Quarterly Journal of Austrian EconomicsMark Thornton
Professor Arkadiusz Sieroń has written an important new book on the Cantillon effect, indicating that the effect of new money on the economy depends on where it is injected.
