No... There's an actual denominator. It's some trillions of dollar depending on if you denominate in M1 or M2 supply. Or both. The problem is the denominator never stops increasing and will never decrease. A decreasing denominator would also not be good. Fixed denominator is the best measuring tool.
Discussion
The denominator actually decreased, for a while. It's just hard to sustain a decrease without crashing the economy.
M1, M2, and M3 all declined.
Trump will send them soaring, again, probably. He's all about printing.
The problem they had was that the soaring consumer prices were caused by the lockdown logistics chaos and Russian war energy chaos, not by monetary debasement, but they fought it with monetary tightning of the world's reserve currency and created a global recession.
I agree, money should just stay money, rather than be used as an economic tool to respond to societal price pressures.
Debt is an asset on every western bank balance sheet
Yes, I knew fed has been decreasing it's balance sheet because they were trying to tame inflation. But we have a debt based economy. Less money in the system means less liquidity. Which should help inflation but that's not really going to help inflation until 2nd and 3rd order effects. But less liquidity also greatly heightens the chances a bank can't cover it's debts. People go diliquent on loans and someone blows up. Triggering more printing to pump liquidity and save the banks.
People offshore are also increasingly desperate for dollars. They can't transact as efficiently, with their national currencies, so tightening the dollar cripples their businesses.
The dollar doesn't just have to grow with the American economy; it has to grow with the economies of every person using it. That's the downside of being the reserve.
Precisely. Debt based currency is the reserve currency for the globe. So tightening causes liquidity crises globally. Which is exactly why Russia and China are trying desperately to stop using it while the third world gets crushed in debt they'll never repay. Their debt is our asset.