Most people understand that a drastic increase in a country's money supply will produce inflation.
This is because if the monetary supply increases faster than demand, the value of each unit of currency will fall.
To put it another way, if the supply of money were to grow faster than the demand for it, the result would be too many dollars chasing too few goods which is the very definition of inflation. Despite the Fed's massive capital infusion, why is inflation only 1.4%?
This is the precise question we will attempt to answer in this article
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