Thursday, 7 January 2016

Moving money from poor to rich: Your Government at Work.

"The government monopoly of money leads not just to the suppression of innovation ...inflation .. but to inequality too.    Opportunities in finance ripple outwards from the Treasury.  The state spends the money before it even exists;  the privileged banks then get first access to newly minted money and can invest it before assets have increased in cost.  By the time it reaches ordinary people, the money is worth less. 
Image result for the evolution of everything  This outward percolation is known as the Cantillon Effect - after Richard Cantillon who noticed that the creation of paper money in the4 South Sea Bubble benefited those closest to the source first.   

Money creation by an expansionary government effectively redistributes money from the poor to the rich. "

Excerpt from The Evolution of Everything by Matt Ridley.  A good read.

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