Let’s discuss the true nature of the relationship between money supply and inflation/deflation. Imagine an island inhabited by a handful of people. They all work at the coconut tree farm, tending and harvesting coconuts and putting them in the barn for later purchase. For each day’s work, they get a seashell which they take home and put in their sock drawer. This is their island’s currency, which they will later use to buy coconuts. 

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