I'm not sure how I stumbled upon this article (as it is rather old) a few days ago, but it left me perplexed for quite some time. Specifically, this part:
While in the last year the size of the Federal Reserve’s balance sheet has grown from a little less than $1 trillion to around $2 trillion, what the Fed detractors neglect to mention is that the Federal Reserve didn’t print money to pay for the purchase of its new assets but rather sucked money out of the banking system that was being hoarded by banks, corporations and individuals. As a result, there was only a tiny net increase in money supply from Federal Reserve intervention. And, with only a small increase in money supply, inflation fears are being blown out of proportion.
Although the author is not technically wrong, he is missing the point. He is misinterpreting the different definitions of the money supply, specifically M0 and M1.
M0 consists of the amount of currency in circulation (including coin) and deposits held by depository institutions at the Federal Reserve.