On 14th May Labour announced plans to spend an additional $163 billion by 2024. This will be new money printed by the Reserve Bank. That equals $33,000 for every Kiwi. Do you think you will see your share? One reason why not is called the Cantillon Effect after 18th century French banker and philosopher named Richard Cantillon. Cantillon noticed that those closest to new money receive a disproportionate share. Because banks, government and large business are closer to the Reserve Bank than individuals they reap the greatest benefit from printing new money. Cantillon developed his theory by noticing that, say the flow of gold to the Kind of Spain, made the King and his court rich but did not increase the wealth of the majority of the population. As Matt Stoller comments: In the 18th century, this meant that the closer you were to the king and the wealthy, the more you benefitted, and the further away you were, the more you were harmed. Money, in other words, is not neutral. This general observation, that money printing has distributional consequences that operate through the price system, is known as the “Cantillon Effect.” The Cantillon Effect is one reason why the gap between the rich and poor continues to increase – the vast quantities of new money being printed by central banks primarily benefit those closest to the source. One of the benefits of RedPill money is that it helps to redress this growing gap. 750,000 Kiwis can own 10,000 RedPill free, no strings attached simply by entering their wallet address into the RedPill website. Because 25% of the Kiwi population are closest to this new money they are the ones that receive disproportionate benefit. This is why I have called RedPill real money for the real economy.
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October 2020
CategoriesAuthorI live in Christchurch. I love NZ and it is time to give something back. I have three grown up children. My wife is a GP. I enjoy trail running, tramping and gardening. You can see what I do for a living here. |
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The actual price is solely determined by users of RedPill.
If there are no buyers the value of your tokens could fall to zero.
The information on this site is not financial advice or personalised advice and is intended for general informational purposes only.