Explain Like I'm Five

so, first, sorry for the link but it's a quick macroeconomics thing. i haven't evaluated the whole thing but it looks right enough, should help us to be using the same vocab. econ uses the same words as english, but they use them wrong and i accidentally learned that language

you're right, it would be a closed loop if it weren't for the foreign currency market. Treasury Bills are often viewed as a form of long-term, less-fungible currency and the Federal Reserve prints those too. There are different types of "money" depending on how available it is, right? Like, if you have a certificate of deposit at your bank that says you've deposited your money for a year so you get an advantageous interest rate with them. That's unarguably M2 cash. Some economists like to argue whether TBills are investment vehicles (because they definitely are) or M2 cash (because they behave a hell of a lot like that too) or both and that's fun. Doesn't make a hell of a lot of difference to me because i'm only an economist by heritage now.

It's one of those weird things where investment and money supply starts to overlap. but yeah, it is kind of thing where the fed can print off a bunch of treasury bills and cause a shitton of inflation if they wanted unfortunately. maybe deflation i have not had the coffee yet i am still waking up but you know it would move one of the directions. people would have to buy the TBills. or sell them. I cannot with the thinkings any longer, but it would theoretically have an effect on just that one market's money supply.

Unfortunately a lot of different markets do their marketing in this one specific market so it hurts globally when statesia gets market shocks.