>> The government, Fed and Treasury, basically printed up about $5 trillion of new cash and treasury debt -- these are largely perfect substitutes so the composition doesn't really matter.
I take this to mean, "interest rates are around zero, and the debt is going to be rolled over when it comes due." An I guess Treasury mostly issues short-term debt, and the Fed is holding short-term rates down, so if we assume new debt issuance has ~no interest-rate impact, fiscal effects seem to have more relevance to inflation than monetary ones:
- Monetary interventions mostly trade "money-like" things for other "money-like" things, both sides denominated in dollars. Maybe the actual dollars involved are "created", but the bonds bought are effectively retired, so no real net effect.
- Fiscal interventions involve creation of "money like" things and trading them for goods and services, bidding up prices.
Interest rate markets look like they're expecting some give in the short term, so maybe this will stop being quite as true, but it looks like those markets aren't predicting anything like "normalisation" over the longer term.
1: https://johnhcochrane.blogspot.com/2021/10/transitory-inflat...
To my knowledge, there have been no significant changes to the definition of M2 in 2020. The increase there is real. The M2 definition change mentioned in the article was on Jan 1, 1973.