An interesting thing is that you can’t print real money (gold, bitcoin, dollar if you are in Japan). Any money you can print will stop to be real ones soon, as people will exchange them into the real ones. As a result, you will have inflation in fake money but deflation in real money. Most governments who tried to print too much money has experienced it (e.g. Russia in 1990s).
What do you mean by “real money”? What effects on the world does it have that “fake money” doesn’t? M1 in the United States increased a lot during the COVID-19 pandemic, does that mean that the US dollar is no longer “real money”?
You seem to be claiming (though correct me if I’m wrong) that expansionary monetary policy can’t achieve its objectives. What makes you believe that?
I understand that excessive money-printing that leads to very high inflation can decrease confidence in a currency and make people purchase another currency if they’re able to do so. However, that seems meaningfully different from having a central bank try to print enough money to get to ~2% YoY inflation from a baseline of zero or negative inflation.
(Note: I don’t know much about monetary policy and could be confused about something.)
What do you mean by “real money”? What effects on the world does it have that “fake money” doesn’t? M1 in the United States increased a lot during the COVID-19 pandemic, does that mean that the US dollar is no longer “real money”?
You seem to be claiming (though correct me if I’m wrong) that expansionary monetary policy can’t achieve its objectives. What makes you believe that?
I understand that excessive money-printing that leads to very high inflation can decrease confidence in a currency and make people purchase another currency if they’re able to do so. However, that seems meaningfully different from having a central bank try to print enough money to get to ~2% YoY inflation from a baseline of zero or negative inflation.
(Note: I don’t know much about monetary policy and could be confused about something.)
Dollars are real money because almost all prices in world are nominated in dollars, and it is widely used as an instrument to store value.
In Japan, excess money goes to US stock market via carry-trade, and don’t contribute to inflation of money in real economy.