Part 4/11:
This interplay explains inflation: adding more money to the system doesn’t increase the actual quantity of goods or services but pushes prices higher. All the “stuff” and “money” are like items on an island—more money just makes everything more expensive, not better or more abundant.
How Does the Money System Get Managed?
The management of the dollar system is centralized around the Federal Reserve. This institution controls the total money supply by “printing” dollars—adding to the system’s total. This process is often described as “money creation” or “quantitative easing,” but in essence, it’s just adjusting a number in a vast digital spreadsheet.