Reply #17: The origin of the money isn't so important

[muriel_volestrangler]

I took money that government gained through taxation as an example, but reserves that have come from commercial banks work just as well. The point is that this money that the ECB and other central banks are lending to banks may not be an increase in the money supply of the economies concerned.

The trouble with inflation is that everyone gets affected by it slightly differently, depending on what the spend money on. The way inflation statistics are compiled is important, and governments aren't above massaging the numbers to their advantage - so it' is important that everyone else eeps as good an eye on the figures as possible.