lance sjogren

Gold's Not the Best Investment in Inflationary Times

The point the author is making is reasonable.

However: The author says you have to have a pickup in economic activity to have inflation because if an expanded money supply doesn't circulate, then there is no inflation.

But, let us say you grow the money supply by 50% and it DOES circulate. However, the money is now only worth 1/1.5 =0.67 times as much.

So even if all the new money circulates, economic activity remains FLAT in terms of dollars adjusted for monetary inflation.

So does that not imply that you can indeed have inflation WITHOUT an increase in economic activity?

It would be interesting to see whether there is a flaw in this logic. If anyone can see one please speak up.