Is Inflation caused by the Government "Printing" Money?
Well this admits that money is "printed." Which suggests that if it weren't printed it wouldn't exist. Which suggests that when you went to buy something with non-existent money, you'd be in a quandry. If money is important at all, one needs to consider this question.
Yesterday, though, I gave some prefatory remarks to the topic. Let me summarize those.
1. I read somewhere that eighty percent of circulating dollars is created by lending. If you want to discuss the quantity of money theory, we have to define the quantity of money. As the quantity of credit money is an ephemeral figure, I suggest we count only twenty percent of what we think the amount of money is.
Now, since whenever Federal Departments spend, current law requires this to trigger the pay-for of Treasury Bond auctions, the selling of bonds only to private entities mostly non-bank entities with non-banking sector customers, auctions in which the central bank is forbidden to make bids, forbidden to purchase, spending is not, to appearance, directly "printing money."
As the Federal Reserve's goal in subsequently purchasing some, not all, Treasury Bonds from their private owners is open market operations: an attempt to stabilize the general level of prices via guiding interest rates in the economy, and their goal is not "printing money," they have opportunity, but don't confess to a motive. Why then do we think they are printing money?" Suppose actually, then, that they are not. During the gold standard, the government allowed itself to print money whenever it purchased gold bullion; now, when has the government ever allowed itself to print money? And if we were printing money, whence comes the eighty percent of money that is not money but only credit, and whence comes our rolling, ever-worsening deflationary credit bubbles and busts, leading finally, now, to this worldwide political crisis.
2. Major inflation vs. two percent "target" inflation
Two percent inflation
Does the Federal Reserve cause inflation and deflation (price changes and price stability (hovering over their two percent target) by their actions, or are they just following the two percent price change with their actions? Causing by or following with. Since he Federal Reserve generally seems to not be looking at overall sectoral balances nor seems interested in providing long-term money supply, but instead seems only to be looking at interest rates with an eye to affecting prices (I hear a collective "Ah, hah!" from youn's, as you believe prices equals money supply), why would we think the central bank is, significantly, "printing money?" It doesn't appear to be their goal, so why would we think it? Now youn's will jump in and shout, "QE!" But that induces you to create the round about theory, the time-lag theory of money-supply inflation causality, to suggest that this year's transitive inflation is actually long term and created by the QEs which went on for years during a mildly deflationary period in American history with no apparent, upwards, price effect.
Major inflation (doubling of prices over a decade)
This is confined to people will say four, I say, three very specific time periods in the last hundred years. As these are specific, one can hardly build a general theory of inflation out of them. But since I've peaked your interest: World War I, followed by a stable-priced Roaring Twenties, followed by a halving of prices during the Great Depression to pre-World War I levels. In World War II, prices doubled again back to the price level at the end of World War I. Then, we have the nineteen-seventies. And I hear a collective, "Ah, hah!" And, "Amen!"