How increases in money supply cause economic bust

Source: Cobden Centre
by Dr. Frank Shostak

“The increase in the growth rate of the consumer price index (CPI) has fueled concerns that if the rising trend were to continue the Fed is likely to tighten its interest rate stance. Observe that the yearly growth rate in the CPI climbed to 4.2% in April from 2.6% in March and 0.3% in April 2020. We hold that because of massive increases in the money supply, it is likely that the growth momentum of prices is going to follow a rising trend. Note that the yearly growth rate of money supply climbed to 79% in February from 6.5% in February 2020. Various increases in the prices of goods are just the manifestation of increases in money supply.” (06/02/21)