Under valued, page-105

Money supply in the US as measured by M0 nearly doubled in 18 months - https://tradingeconomics.com/united-states/money-supply-m0
I agree that some of that money is sitting there and owners don´t know how to spend it (there are your increasing customer deposits). IMO people with that money have been and will be looking into opportunities to spend it. And there is the main reason for asset price inflation an inflation that is manifest on stock and some real estate markets but not really expanded to gop (yet).

Since January 2020 M2 went up by 4 trillion USD (https://fred.stlouisfed.org/series/M2). That M0 and M2-supply did not lead to a general inflation is indeed reasoned by the drop in money velocity (down by around 30% -https://fred.stlouisfed.org/series/M2V). And the reason for the velocity to drop might very well reasoned to be people more careful and reluctant in their spending in COVID times. In some areas (such as travelling) spending wasn´t even really possible. But what happens when spending is possible and prudent again and money velocity goes up?

Also, I do not think that it makes a difference whether government sells their bonds to a bank and the bank sells to FED or government sells directly to FED. In a nutshell the extreme government spending is mostly financed by generating/printing money. We had that going in Germany in 1922/1923. I have a small collection of bank bills from that time. The later ones have figures printed on them such as 100 billion. Government spending financed by the FED (or ECB for that matter) does contain a substantial risk of inflation.

So there are plenty of reasons why other assets than real estate or stocks should gain greater value as well (as the value of the risen money supply diminshes). Of course on the non-financial markets we have strong other effects such as your mentioned supply-chain (and/or general supply and demand issues) at work. However car prices can only go up if the demand side has the money and the willingness to pay for the increased prices of cars. FED and other entities always seem to search for explanations other than monetary reasons when prices go up. When prices go down on other markets there is also the supply and demand-issue at work. So it is imprudent to say that rising prices in one sector are supply-chain-driven only while falling prices on other markets give reason to believe that monetary policy is all right. Which it isn´t. It is not sustainable.

However and having said all that, I agree that there is a substantial risk for a panic-driven meltdown of asset prices (given all that leveraging that has been and is still going on). So inflationary and deflationary scanrios are somewhat in a stand-off. But at the same time I am convinced that the FED (and the ECB) will almost do anything if they were to see such a melt-down coming. And the measures they will be taking will be inflationary (as they have been in the past). Also what would happen to money you have in the bank to be prepared for a deflationary crash? Will governments bail out banks and the customer deposits again? I doubt it and there is another reaon why I would not keep much money as a bank deposit. But that is me and we live in a free world and of course I can be wrong with my analysis. So good luck to you and to all of us. Over and out.