I am not so sure these days about the strength of the link between M1 (cash money, printed by bureaucrats) and the value of the economy (M1+M2+M3). Consider that company x, making stuff / doing services pays its employees electronically out of a value stream that is only partly physical and partly electronic - when was the last time u wrote a cheque / what proportion of your expenditure is cash based?
Therefore 2 things.
1. The link between orthodox fiscal / monetary policy may be weaker than in prior periods. Therefore aggregate decisions by individuals have greater weight than Govt's.
2. The impact of inflation is / may be muted, depending on the gearing level of the private / small investor. I.e if gearing is high (esp credit cards and retail mortgage) then inflation is positive for economic resilience, esp if debts are income secured rather than asset secured.
