> You’re forgetting about velocity. A dollar in a middle class earner’s hands gets spent faster than a dollar in a billionaire’s. That faster spending stokes both growth and inflation.

At a fixed money supply, growth causes deflation. People want to engage in more transactions and they need money to do it, which increases demand for currency.

You often see inflation during periods of growth because when there are high returns to be had, people take out loans to expand and banks making loans creates new money. The new money causes inflation. But if you really didn't want that to happen, it's simple to prevent it by requiring banks to hold more reserves (so they won't make as many loans).

But it's not clear why preventing moderate inflation should even be desirable. If you get a 10% raise at the same time as prices increase by 4%, who's complaining? You're up 6% annually and your mortgage, credit card debt and share of the national debt are down 4%.