Part 5/15:
The conversation turns to the growth of the money supply, a central topic among Austrian economists and Bitcoin enthusiasts alike. The guest acknowledges that simply increasing the money supply doesn't guarantee inflation; its impact depends on broader economic conditions, such as supply constraints, demand shocks, and fiscal policies.
He differentiates between the roles of the Federal Reserve and the Treasury, emphasizing that the latter's issuance of debt-backed assets, like bonds, effectively creates financial assets that can function as money. Using the example of bond swaps by the Fed, he illustrates that the definition of money has become increasingly subjective, especially concerning reserves, cash, and government-issued bonds.