In Japan, between 1997 and 2010, the monetary base soared by 90 percent while money stock increased by 30 percent. Likewise, the U.S. experience between 2008 and 2010 clearly shows that the monetary base soared by 140 percent while, by contrast, money stock increased by only 10 percent.
Despite the flooding monetary base, Japan’s consumer price level dipped by 3.7 percent for the thirteen years by the end of 2010. The U.S. core CPI inflation rate has decreased by more than one percent point despite the increase in monetary base.