Visual Capitalist has a nice chart showing money supply overlaid on inflation from 1875 - 2021. When the money supply increases faster than its ability to produce goods and services, inflation often results.
The money supply in the chart is “Broad Money.” Broad money (M3) includes currency, deposits with an agreed maturity of up to two years, deposits redeemable at notice of up to three months and repurchase agreements, money market fund shares/units and debt securities up to two years.
There is a close correlation between broad money supply and inflation.
The two exceptions were the 1880s which had tremendous productivity growth, and the 2000s, which saw wage and price declines due to automation and outsourcing production.
There was also massive diversion of money into assets, such as real estate and stocks, rather than consumer goods. Consumer services (education, medical care) had high inflation.
The Visual Capitalist chart notes that the money supply grew 25% in the first year of the pandemic – 2020. The chart ends at the end of 2020.
Here is the current M3 chart. M3 is increasing at a steep slope – far steeper than the slope from 2000 - 2020. The steep slope shows no evidence of leveling off. In fact, it correlates strongly with the CPI chart.
M3 was $15.47 X 10^12 in February 2020. M3 was $21.84 X 10^12 on 3/10/2022, an increase of 41% in just over 2 years. Even without pandemic restrictions and bottlenecks, this is far faster than the growth rate of GDP.
No wonder we have inflation! Until the growth rate of M3 declines we will continue to have inflation.