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Re:Federal Reserve lent $300B in emergency funds to banks in... by lumb63 on Sunday March 19, 2023 @10:34PM (#35226577)
The increase in money supply was absolutely not driven by an increase in demand. Supply was designed to pull along demand. Why else would it be called “stimulus”?

The supply did grow and the money went to banks, to the US government, etc. You can look at the Federal Reserve’s balance sheet and see entries for US treasury bonds, mortgage backed securities, etc. The US government then went and spent that on things, and the value of mortgage-backed securities increased which decreases the return on the investment and thus encourages banks to take on higher-risk investments. These activities drive inflation. So, no, an increase in the amount of money isn’t inflation, but a higher quantity of money supply times velocity does, by definition.

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