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Comment by liaukovv | Hacker News Reader

Not really, the entire function of central bank is that it can create money at will.

Imagine we own a company, I own 20 stocks, you own 10 stocks. I unilaterally decide to print 10 more stocks and give them to myself. Do you have the same amount of stocks? Yea, but in real terms now you have less stocks. The same thing with money. It doesn’t matter how much money you have, what matters is how much you have it relative to others.

Depends entirely on the velocity of money. Remember also that central banks can remove money by raising interest rates.

If we're doing child-like examples, if the central bank prints a trillion dollars in notes and then sends them to the moon and promises never to use them, is anyone really poorer?

I don't believe this would cause any additional inflation, since this is not scenario of creating money, but rather converting one class of money(bank deposit) into another class(reserve notes).

The people may even simply move money from one bank to another, it doesn’t matter. What matters is that the bank goes insolvent. So what you have now is a bunch of loans not supported by anything.

@eloff I think our replies crossed. I think that the question is whether you are still at a net positive as a result of inflation (consider the counterfactual).

If that causes inflation then it is taking money from the existing holders.

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