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To: SeekAndFind

Everyone needs to know the economic term “Cantillon Effect”

An 18th century French banker and philosopher named Richard Cantillon noticed that who benefits when the state prints a bunch of money is based on the institutional setup of that state. In the 18th century, this meant that the closer you were to the king and the wealthy, the more you benefitted, and the further away you were, the more you were harmed. Money, in other words, is not neutral.

This general observation, that money printing has distributional consequences that operate through the price system, is known as the “Cantillon Effect.”

The reason is because money has to travel through institutions. Government debt spending and Federal Reserve QE money gets to the rich and politically connected first. In the USA, the institutions for the politically powerful function well, and those for the rest of us are rickety and broken.

Eventually, some money will get to the rest of us, but in the interim period before that money fully circulates, the wealthy can use their access to money to buy up physical or financial assets.


2 posted on 11/03/2021 8:17:41 AM PDT by PGR88
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To: PGR88

Not to mention that by the time the money gets to the workers prices have risen and the money is worth less by then.

This was noticed and commented on by President Jackson and was one of the reasons for ending the central bank of his day.


3 posted on 11/03/2021 8:30:23 AM PDT by crusher2013
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