When more money enters the economy than stuff is created, the price that the person willing to sell/price you are willing to buy that stock for goes up.
However, we must also remember that dollars are effectively debt—banks create them by loaning money. So while it is true that dollars cannot be “parked” in assets since there are two sides to every transaction, if the seller goes on to pay down debt with the proceeds then the money in circulation will decrease.
They are debt in the most literal sense possible. They are listed as liabilities in the fed's balance sheet. The "note" in "Federal Reserve Note" written on every dollar bill is referring to the legal definition. It's a promise to pay.
[1] https://fred.stlouisfed.org/categories/32242 [2] https://www.newyorkfed.org/aboutthefed/fedpoint/fed49.html
A couple questions because I don't understand this very well.
Do we have an idea how much is actually sitting in a bank account vs being put into the market?
And, if people put money into stocks and park it there, wouldn't the velocity still be much lower than it usually is (when people are spending more on goods and services)? My interpretation of what's being shown here is that a large amount of newly "printed" money has gone into the stock market, thereby inflating asset prices. I don't see how low velocity refutes that.