The Cantillon Effect: Understanding Wealth Inequality

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Ever wondered WHY the RICH keep getting RICHER? 🤔💰 Let's dive into the fascinating Cantillon effect and how it plays a key role in wealth inequality. 📈 Get ready for some eye-opening insights. Thread 👀📚

Why do the rich keep getting richer? Let's explore the Cantillon Effect, a concept that deeply impacts wealth distribution in our economy. #CantillonEffect #WealthInequality

When new money is created, it doesn't spread evenly. Those closest to the source, like banks and financial institutions, benefit first and most. This leads to an uneven economic playing field. #MonetaryInflation #EconomicDisparity

Richard Cantillon, an 18th-century economist, articulated this theory. He observed that money creation benefits the financial class first, altering economic dynamics. #RichardCantillon #EconomicTheory

As new money flows from the wealthy to other parts of the economy, its value decreases, raising prices. Those further from the source are hit hardest by rising costs. #InflationImpact #EconomicCycle

The Cantillon effect implies a divided economy: low inflation at the consumer level but skyrocketing prices in real estate, luxury goods, and more, consumed by the wealthy. #DividedEconomy #AssetInflation

Who benefits? Those closest to the money creation process - banks, financial institutions, and politically connected entities. The working class, distant from this source, faces the brunt. #FinancialInequality #WealthGap

👉 Now, how does Bitcoin address this? Bitcoin's creation through mining and its fixed supply counter the Cantillon effect. 👉 There's no advantage to being closer to the 'money printer'. #BitcoinSolution #DecentralizedFinance

With Bitcoin, each holder retains a fixed fraction of the total supply. There's no devaluation through new money creation, protecting value for all users. #BitcoinFairness #CryptoEquality

Bitcoin's potential to neutralize fiat-driven price displacements could lead to more equitable economic conditions, especially in sectors like housing and education. #BitcoinImpact #FairEconomy

In conclusion, understanding the Cantillon effect and Bitcoin's countermeasures illuminates the need for sound, decentralized money. ⚖️ It's not just about wealth; it's about economic fairness. #SoundMoney #EconomicJustice

See this topic in video 🔥 twitter.com/BitcoinMagazine/status/1741107773956391286

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