0 sats \ 2 replies \ @jp 9 Aug 2022 \ on: Bitcoin Market Cap Growth vs M2 Money Supply Growth bitcoin
Money supply is not indicative of inflation
The money supply of a country is a major contributor to whether inflation occurs. As a government evaluates economic conditions, price stability goals, and public unemployment, it enacts specific monetary and fiscal policies to promote the long-term well-being of its citizens. These monetary and fiscal policies may change the money supply, and changes to the money supply may cause inflation.
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Money supply is a factor, but you also have to take into account money velocity.
You can print a trillion dollars in a single day, but it needs to be transacted in order for the inflation to start spreading across asset classes (see: Milton Friedman)
Not saying you are wrong, but money supply alone isn't necessarily indicative of inflation
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