All good points, schloss. You say, "I see too little money chasing too many goods", and I agree this is the current situation. Discretionary items are falling in price, while necessities (ex housing) are rising. Typical pattern when the economy hits a rough patch.
But I was actually thinking of the future in classic terms of inflation meaning that each new dollar printed makes the existing dollars worth less and eventually makes them all worthless. IOW, when the trillions now in the budget start hitting the street, prices (particularly for necessities vs. discretionary items) will have to rise as the value of each existing dollar decreases. Down the road I can see the price of food skyrocketing due to the inflated money supply (devalued dollars) plus shortages (keep in mind that if the dollar collapses, we won't be able to import anything, including food) and this would be the perfect example of too many dollars chasing too few goods.
Let's hope it doesn't come to that, and that despite the negative reaction to the current proposals for righting this ship, the proposals actually, in fact, work!
Newly
BTW, I always wondered where the dollars went during the deflation years of the Great Depression until one day I saw a photo in a book of a man shoveling dollars into a furnace -- mystery solved!
Newly
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