Why FIAT printing is good ELI5 (the three stages of money)

Ok so let’s talk cash money. The fed controls it… it isn’t finite…. Yada yada. There are concerns with the cost of money (the fed rate) and the total amount (printer go brrrrr) but you MUST look at it macroscopically. Let’s make a super simple example to explain why money printing is GOOD, but let’s first explain why it would be BAD to stop printing all together. (Stage 1) Let’s say the 1%’ers decided it was time to pause spending and effectively took their “bucket” of cash off the market; you now have a total money supply of “M = M – 1%_balance”; so what does this do with the total M now? Well the total distributable available cash goes down, making the existing money now cost more because it is in strong demand and short supply. Rates rise, spending decreases, money is taken off the market , supply goes down, cost goes up and forever we are in this cycle . So what do you do? (Stage 2) YOU PRINT MORE MONEY and push it to the market. Now, you might be thinking that this creates inflation as well because now there are more dollars available but you actually will see a decrease in value of the dollar and deflate the economy (money worth less) HOWEVER because of the deflated value you must again adjust by raising rates (Stage 3) to create value again in this new money supply. BUT CAPITALISM! So now enter rise of cost of goods, simply a byproduct of greed, right, wrong , or indifferent. If the cost of money CHANGES then business as a whole changes with it to keep the same bottom line dollar (or increase even) in their pocket. The only thing changing this corporate dollar value is competition. This is where we are now. The cycles repeat endlessly and you should consider it in your investments. The next economic catalyst to move the money market would be anything to cause the 1%ers to close their purse and pause spending. That’s what you are looking for.