by gunsoverbutter
Have you heard of the concept of exporting your inflation? Basically if a country prints up new money, but quickly loans it out to another country, therefore preventing it from being in their own monetary system, the inflation isn’t felt at home.
For example, if the US prints a trillion dollars and loans it to various countries, as long as those dollars don’t end up back in our own money supply right away, we won’t feel the inflation. That’s how the Federal Reserve is able to make so much more new money and keep inflation relatively in check over time.
Since the Fed’s target inflation rate is 2% annually, they can actually print up way more than 2% new money, all that really matters to them, and most Americans, is how much inflation you actually feel (or experience).
Inflation spiked so much after COVID, primarily because most of that PPP and stimulus money went directly into Americans hands, on American soil, which created ‘felt’ inflation.
Some economists feel that once those dollars all start returning back into the country, we will experience higher and higher inflation rates. Basically the bill eventually comes due.