[DonaldC]

But a static money supply does not help economic growth, which is why we left the gold standard as I understand it.

[palmer]

Any increase in the money supply beyond what is justified by production creates a bubble which crashes later. The extra money (low rates) also causes misallocation of resources like the commodities bubble a year ago. That further distorts the economy, last years bubble was the final nail in the coffin for many businesses that needed those commodities.

We have been postponing that inevitable crash for the last couple of decades. Volker kept money supply under control briefly in the early 80's but it quickly got out of hand after the crash of 87.