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🗽 The Cantillon Effect Explained: Why Inflation Helps The State At Your Expense

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Via SchiffGold.com, The Cantillon Effect, named after 18th-century economist Richard Cantillon, describes the way newly created money flows through an economy, affecting different sectors and social classes unevenly. When a central bank like the Federal Reserve injects new money into the economy - often through measures like quantitative easing or low interest rates - this money doesn’t distribute itself evenly. Instead, it creates ripple effects that impact different people in distinct ways, often favoring the wealthy and disadvantaging lower-income individuals. The Austrian school of economics uses Cantillon’s observations as a lens to critique monetary policy, particularly in how it exacerbates inequality and distorts prices.

ZeroHedge Opinion     Nov 21, 2024