The popular media is awash in reporting that the government is printing money in an unprecedented manner and this will certainly cause inflation and cause all sort of other bad things. A couple of us around the company have spent more time in economics classes than we care to admit and have known this perception to be wrong. Effective money supply depends on the amount of reserves in the system and the velocity of those funds. For those of you who are interested, the link below will direct you to a technical piece that explains this relationship. It may provide some comfort that the world is not necessarily going to end badly. At the very least, it will provide you some interesting facts you can use to amaze your guests at your next dinner party.
Click here to read the article.