Inflating the money supply always adds economic uncertainty. More dollars/pounds/yuan/whatever chasing the same number of goods and services can only have the result of rising prices. However, the way the new money is added into the economy distorts the effects to the benefit of some at the expense of others. This means a lot of uncertainty. In a sense, money is a unit of measure allowing consumers to compare their economic options. When more is injected into the economy, we have a dishonest unit of measure. It is more difficult for everyone to plan for the future. Everyone knows expenses will be higher. Everyone from workers to corporate fat cats demands higher future earnings and profits. But the uncertainty of how and when the effects of money supply inflation will manifest makes planning a challenge.
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