> For simple terms since you’re obviously not in the field, ask yourself where is money created? If you say central banks, go back to Econ 101 and study better this time.
The Fed itself directly created 8T USD since 2009 (QE). Some of it in the past two years even went straight to consumer's pockets via the Treasury in the form of stimmies and forgivable PPP loans (helicopter money/MMT).
https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
That's a non-trivial amount, 41% of total M2 and 61% of the increase in M2 since 2009:
https://fred.stlouisfed.org/series/M2SL
Where did the rest of the increase in M2 come from? Fractional reserve lending by banks -- at interest rates artificially suppressed by Fed policies specifically to encourage lending/money creation.
Before the Fed was created in 1913, USD was created by fractional reserve lending by banks at market determined interest rates and the marginal increase in monetary gold and silver from mining output (typically 1-2%/yr).
This historic monetary system was dynamically unstable as mining output was uncorrelated with natural business cycles and unbackstopped banks were subject to runs during downturns. The Fed was created to solve these problems, specifically the panic of 1907.
Over time it's mission evolved from being a lender of last resort to actively targeting employment and consumer prices. Since the 1987 crash however, this official mandate was effectively replaced with one targeting asset prices - primarily stocks and houses (wealth effect targeting).
Normal business cycles were now increasingly distorted by the fed Fed responding to (or not wanting to hurt) asset prices for fear it would psychologically affect consumer and business spending and eventually employment.
This lead to a new instability: bigger booms created or exaggerated by easy Fed money, followed by bigger busts during the tightening phase.
Each boom/bust cycle led to more micromanagement by the Fed and thus more instability. Since 2008 (QE), and especially after 2020 (helicopter money) they have gone completely off the rails as seen by the M2 chart above and soaring consumer prices. "Inflation is always and everywhere a monetary phenomenon - Milton Friedman"