The Cantillon Effect: The 18th Monetary Curse About to be Broken
The Cantillon Effect is an old theory discovered by 18th-century banker Richard Cantillon. Because of his special experience in handling lots of gold transactions and being close to the kingship.
What is the Cantillon Effect?
There are 3 ideas:
1) the country with twice the money does not make citizens twice as rich but oppositely
2) whoever closed to the king will benefit from the cheap money
3) poor will eventually get the money but they will suffer the most
1) twice the money does not make you twice rich
The more money is given from the government, the cost of goods and services will double. You will need to spend more money to receive what you previously needed.
2) whoever closed to the king benefit first
The money will be distributed first to riches. Banks, financial institutions, hedge funds, and riches will receive the money first after the government printed money.
3) poor will suffer the most
The money will take longer to reach to poor after goods and services are already expensive and everything is costly.
