Explain Like I'm Five

First, we need to look at what "inflation" actually means. To the average person, "inflation" just means "things getting more expensive." But there are lots of reasons why things get more expensive, for example, supply shortages, trade disruption, price gouging, etc. These things have nothing to do with the amount of money in circulation, and strictly speaking have nothing to do with inflation in a more technical sense, which is about things getting more expensive specifically because of the amount of money in circulation.

Suppose the government taxes billionaires and redistributes the money to ordinary people, and in response, rents go up. The amount of money that exists hasn't changed, but landlords know they can squeeze more money out of you. This isn't inflation, it's an example of monopoly pricing, where the price is determined by "how much ya got."

Second, the amount of money in circulation isn't just a question of how much physical currency exists. A central bank can lend money that they don't actually have, and that causes more money to be in circulation than what is physically printed by the mint.

Third, inflation, actual inflation, isn't necessarily bad. Increasing the money supply essentially functions as a form of taxation, known as seignorage. Seignorage has several advantages as a form of taxation, it's impossible to evade, and it hits those with the most money the most. It does have downsides especially when taken to excess, but the standard 2% inflation doesn't really cause a lot of problems.