The US dollar is fiat money (not redeemable for gold or silver).  Its value floats in relation to other currencies and commodities. The U.S Treasury Department and the Federal Reserve Bank manage the money supply to keep its value stable. Historically they have been satisfied with a 3% inflation rate or less when economic growth is slow. The Fed’s dual charter was established by the Full Employment Act of 1978 which added economic growth to the monetary mission established in 1913. The Chairman of the Fed and its regional governors are appointed by the President to six year terms. The Fed achieves its goals by selling bonds and lending money to banks at a controlled interest rate.

The money supply of the United States has been volatile since 2000. The large injections of M1 (currency) in 2009 and 2011 due to stimulus and quantitative easing, have not been enough to offset the losses in demand deposits and savings stemming from the recession of 2008-9.

Most mainstream economists agreed there is not enough money (liquidity) for the current size of the U.S. economy.  Quantitative Easing, the QEI and QEII programs in 2010-11, added to the money supply. QE III was launched in September 2012 when the recovery stalled and unemployment was stuck above 8%.  Quantitative Easing is a theoretically disputed strategy of “last resort” that governments controlling fiat currencies employ after they run the interest rates to near zero.  Japan has been engaged in QE for two decades and has not emerged from economic stagnation. An advantage of QE in the US is that unlike fiscal stimulus it does not require Congressional approval.