The Cantillon Effect is the one idea the political class cannot afford for you to understand.
New money, Cantillon observed, does not enter the economy uniformly. It enters at a specific point. It enters through the hands of a specific set of people first. And those people, because they hold the new money before prices have adjusted higher, are able to purchase real goods at old prices with new money.
New money benefits its first recipients at the expense of its last recipients.
Inflation isn't merely a tax. Inflation is a transfer — from the people farthest from the printing press to the people closest to it.
It is how the political class thrives.
And, when the people eventually understand this is how they've been enslaved, financially, there will be a revolution.
https://t.co/HoAdZgjWv2
I would argue that the deterioration in the purchasing power of the US$ is more like 8% annually. and that the numbers " crossed years ago.
Compare prices today, compared to 2020, and you will be horrified.
@jenstilmanydots They blame everything and everyone except the federal government policies for food inflation. Government food terminals and hubs? What could go wrong
@Martyupnorth BMO used to recognize that you were long-standing customer. Now they are horrible, head off is just crunch‘s numbers and runs wrist, models and changes your account without asking.
I still can't get over the fact that the Canadian government is not ashamed by the fact that they are giving people money for groceries. In any normal country, this would be an abject admission of total failure.