Author: Stephen Johnston
Edition: 1
Publisher: Stephen Johnston
Binding: Paperback
ISBN: 0991837509
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Cantillon's Curse: Some thoughts on a world of non-neutral, constantly expanding money supply
Richard Cantillon was an Irish economist born in the 1680s.Cantillon's Curse review. He became a successful banker before he began his speculation in John Law’s Mississippi Company during the late 1710s and early 1720s. It was in the growth and collapse of the Mississippi Company, and along with it the French economy, where Cantillon was able to witness first hand the devastating effects of unbridled money printing. It was from these experiences where the idea for one of his most important theories, the Cantillon Effect, arose.
The Cantillon Effect is elegant and simple to understandRead full reviews of .
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He became a successful banker before he began his speculation in John Law’s Mississippi Company during the late 1710s and early 1720s. It was in the growth and collapse of the Mississippi Company, and along with it the French economy, where Cantillon was able to witness first hand the devastating effects of unbridled money printing. It was from these experiences where the idea for one of his most important theories, the Cantillon Effect, arose.
The Cantillon Effect is elegant and simple to understand. At its core is the idea that inflation does not happen in the aggregate. As money is printed, purchasing power is transferred to those who receive the freshly-printed money first from those who receive it later (the purchasing power of the money falls over the long term as the supply is increased).
Since 1971, when the US defaulted on its last gold redemption obligations, we have been witnessing the non-neutral effect of money printing, with the state and its proxies in the politically favored finance, insurance and real estate sectors being the beneficiaries. Since the dot.com market crisis in 2001, this process has been accelerating. As it progresses, increasing amounts of capital are stealthily taken from “inflatees” for the benefit of the “inflators”. Hence, we are now living in a global market in the throes of the negative effects of non-neutral money printing... or what I like to call Cantillon's curse, a world where certain privileged groups are silently misappropriating the wealth of the middle classes.
Inside Cantillon's Curse you will find a series of discussions on macro themes including:
- stagflation;
- demographics;
- sovereign insolvency;
- bailouts and the law of unintended consequences;
- agriculture;
- EROEI; and
- the retreat of financialization among others.
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