Really interesting read. Thank you.

I'm not so gloomy though. One thing that I wonder about is where all that disintermediated money is going. What does the money-market fund do with it? Rates at those funds are driven by demand for loans. Who wants to borrow what former bank depositors want to lend? Won't the flow of money to those funds depress the rates they can charge to put it all to work?

And won't the excess cash end up in banks? Indeed, doesn't all the money end up in banks anyway? Isn't the problem just getting the new owners of the money to put it at non-TBTF banks? Surely, Uncle Sam can figure out how to do that. Unsophisticated depositors may be fleeing regional banks, but the smart money should be subject to the kind of incentives that only they can understand.

I don't blame money-printing for inflation. I blame supply shocks. COVID closed the negative output gap. In 2020, excess capacity soaked up the Trump deficit without a problem. The COVID relief money replaced wages, rents, etc. It didn't create excess demand; it created stable demand for decreasing supply. When the supply chain is fixed, the inflation will go away. On this score, though, I suspect the US is less likely to allow itself to be so dependent on foreign (read, Chinese) goods, and the benefit of trade based on cheap labor will be lost through price increases.