I've heard afew gurus saying that if a government prints too much money, too quickly - expect to see the effects of inflation as there is too much money quickly available and in circulation.... too much money chasing too few goods.
My question is when can the average consumer physically begin to pinpoint the effects ( inflation ) of too much money in circulation ( aside of when prices skyrocket ) ?
Imagine an economy in which there are 1 billion items for sale. If there are
1 billion dollars in circulation in that economy, the average cost of every item will be $ 1 dollar.
If you suddenly increase the number of dollars in ciculation to 2 billion but the number of items produced and offered for sale remains a billion ( there is no increase in production to match the increase in circulating money ) , the average price of each item will increase to $ 2 dollars. Therefore, the value, the spending power of your dollar would of halved.
Now let's use the US as an example they have printed billions of dollars to save the economy and bail out businesses, my question is at what point can we start to see the effects of this excess money in circulation ANDDDDDD how does it trickle down to the consumer , where dothese wads of cash/ electronic dollars go before they cause the price of bread for example to go from $ 4 to $ 15 ?
I'm soo very new to this so please don't mock me, i'm not at all tertiary qualified, i just want to get my head around this.