Inflation: Can it happen when the banks aren't lending?

Can inflation happen when the banks aren't lending? We can state with absolute certainty that "yes" is the correct answer to the above question. We know for a fact that the total supply of money can increase in parallel with a contraction in the commercial banking industry's collective loan portfolio because that's exactly what has happened in the U.S. since October, 2008. As illustrated by the following chart, "total loans and leases at commercial banks" (the blue line) peaked and began to trend downward in October, 2008. As also illustrated by the following chart, True Money Supply (the red line) has trended upward in parallel with the post-October-2008 decline in bank lending. In fact, the rate of growth of the money supply accelerated after bank lending went into decline. Considering what has happened over the past few years, why do some analysts continue to claim that commercial banks must be willing and able to expand their loan books, and that the public must be willing and able to take on more debt, in order to get growth in the economy-wide supply of money? We don't know; you'd have to ask them. Clearly, they are wrong.

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