[jack_h]

> There's something that happened during ZIRP & Negative Real Interest Rate Policies that completely divorced the value of money in the real economy from the value of assets & future cash flows

I’m not sure I follow. The USD is just a medium of exchange. 100% of the dollars commands 100% of the wealth of the economy. If you increase the number of dollars but the size of the economy itself doesn’t increase then the underlying prices would go up and the value of individual dollars would go down.

[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.

[throw0101c]

> If you increase the number of dollars but the size of the economy itself doesn’t increase then the underlying prices would go up and the value of individual dollars would go down.

Just looking the number of dollars, without looking at what they're doing, is like thinking you will gain weight because your fridge/pantry is stocked:

> But also – why do so many people insist that inflation is an increase in the money supply? This makes zero sense. Here’s why – our economy is mostly a credit based economy. So, if I take out a loan for $100,000 then the money supply has technically increased by $100,000. But what if I don’t actually tap that loan? What if I borrow the money because, for instance, house prices just went up 25% and I want to have some cash around for emergencies? This doesn’t tell us anything about prices, living standards or really anything. But this is what so much of the money supply represents – money that has been issued and is just sitting around unused. Why is this useful? It’s like calculating your weight changes by counting how much food you have in your refrigerator. No. That’s potential calories consumed and potential weight gain. The amount of food in your fridge tells you little about your future weight changes just like the amount of money in the economy tells us little about the actual price changes in the economy.

* https://www.pragcap.com/three-things-i-think-i-think-i-see-d...

Japan had an ever increasing money supply for decades and experience not just low inflation, but at times deflation:

* https://fred.stlouisfed.org/graph/?g=1680i

See also US:

* https://fred.stlouisfed.org/graph/?g=1MG9e

Besides the quantity of money, you have to actually look at what the money is doing (velocity), which in recent years is 'not much':

* https://en.wikipedia.org/wiki/Velocity_of_money

* https://fred.stlouisfed.org/series/M2V

As it stands there's just a growing pile of US money doing a whole lot of nothing in money market funds:

* https://www.cnbc.com/2025/09/12/7-trillion-cash-money-market...

* https://www.apolloacademy.com/6-trillion-on-the-sidelines-in...

[jack_h]

I fully admit what I said was simplistic and not meant to indicate the true complexity of the system. I agree with everything you’ve posted as inflation is not immediate merely because the money exists. I was presenting a rough zeroth order approximation because I didn’t understand how the value of money could be completely divorced from assets/the economy.