If a central bank increasing the money supply distorts and hurts the economy, why wouldn't a private increase in the money supply have the same effect? Also, if one believes that if money will lose value in the near future it will cause a inflationary spiral, why wouldn't that person also have the view that an expected increase in the purchasing my power of money would have a deflationary spiral?
>If a central bank increasing the money supply distorts and hurts the economy, why wouldn't a private increase in the money supply have the same effect? Competition between private currencies should strongly limit inflation. Who would want a currency that they expect to be inflated (devalued!) by a significant amount?
- MengerianMango
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