Quote from morganist:
Do you see my point though that there is more than one force that impacts inflation and that the observed relationship between inflation and interest rates has led to one way of thinking that may be false.
Also the main factor will be foreign goods and the ability to purchase them due to the impact money supply has on exchange rates?
IMO, Inflation is related to the increase/decrease in money value compared to the ratio of real goods and services of the economy. Many people (including me) use terms that are not precisely defined and so understanding each other's points is more difficult. Economists encourage this confusion as they work their "magic".
The FED controls USD money supply (the base currency) but an issue is that WORLD currencies to WORLD output is now the key issue (IMO) since Aug 15, 1971.
Inflation/deflation can also be hidden in currency exchanges as well if you follow my thinking. I believe that the three main currencies ratios are controlled to attempt to set world inflation but it is not working well. Someone must lose - all politicians and countries can't win in the current scenario
You are likely aware of the Triffin Dilemma - an issue arising from all this. IMO, the FED can't be successful controlling a basket of currencies (even as a base currency) when differing political agendas affect currency inter-relationships.
The salient issue of trouble in 2008 was actually the backup of world trade when the international exchange system was close to collapse because of unknowable counterparty international payment risk. All the other factors come from this trouble in rebalancing payment for world trade IMO.