The U.S. has always had the strategy of Exporting Inflation through purchasing goods from other countries. So now that Trump is demanding companies to bring their production lines back to the U.S., will this increase domestic inflation?

We have the formula: M x V

- M (Money Supply): This is the amount of money in the economy, meaning the amount of money that is "printed" and circulates.

- V (Velocity of Money): This is the speed at which money circulates, or the number of times a unit of currency is used within a certain period.

Reflect on the following:

What increases when production is in the U.S.?

> Employment increases.

When employment increases, what else increases?

> Inflation increases, people have money to spend.

When spending increases, does M or V increase?

> V increases.

So, is the increase in CPI due to M or V?

> V.

Economic growth, inflation increases due to M means money is depreciating.

Because V is domestic money that has value and liquidity.

That is why the U.S. can always export inflation.