"Those to whom the system brings windfalls ....are the object of the hatred."
This is a quote from Keynes that appeared in a recent article by Dylan Grice in a rather unusual context. The object was to evaluate the beneficiaries of inflation using an old observation by Richard Cantillon (writing decades before Adam Smith) called the “Cantillon effect. He showed how those closest to the money source benefited at the expense of others. His original observation was of the mining of gold and silver. Those who benefited most were closest to the creating of the wealth and they, in turn, used that wealth to buy goods which raised the price of those goods down the line to the later consumer. In other words, the beneficiaries of newly created money spend that money and bid up the price of goods with their higher demand. Those who suffer are those who have to pay newly higher prices but did not benefit from the newly created money. Grice applies this concept to the printing of money and inflation. The banks take the infusion of money, use it and the resulting inflation hits those further down the food chain.
The net effect is social disruption. Those to whom the system brings windfalls ....are the object of the hatred.
This is a quote from Keynes that appeared in a recent article by Dylan Grice in a rather unusual context. The object was to evaluate the beneficiaries of inflation using an old observation by Richard Cantillon (writing decades before Adam Smith) called the “Cantillon effect. He showed how those closest to the money source benefited at the expense of others. His original observation was of the mining of gold and silver. Those who benefited most were closest to the creating of the wealth and they, in turn, used that wealth to buy goods which raised the price of those goods down the line to the later consumer. In other words, the beneficiaries of newly created money spend that money and bid up the price of goods with their higher demand. Those who suffer are those who have to pay newly higher prices but did not benefit from the newly created money. Grice applies this concept to the printing of money and inflation. The banks take the infusion of money, use it and the resulting inflation hits those further down the food chain.
The net effect is social disruption. Those to whom the system brings windfalls ....are the object of the hatred.
No comments:
Post a Comment