Government Reserve Creates a Tsunami of New Money, But a Tsunami Ultimately Must Crash

World economies destroyed by design

My daughter sometimes surfs the bore wave that will heralds the incoming wave at Turnagain Arm, Alaska.

The wave, or surf, to be exact, can achieve a height of 10 feet, but are usually smaller sized. Regardless of the size, the dunes draw surfers from all over, each looking for the hurry of riding a crest, and hoping not to accident in the foam.

While I have yet to surf those freezing seas, which are bounded by threatening quicksand-like mudflats, I recently rode a wave that lasted almost two years. To tell the truth, I enjoyed the ride. Sure, I knew my wave was the least of the series, with a subsequent one roaring in the distance. And I knew I had no chance of achieving the safety of a exotic shore before I was still left crushed, broken, and shirtless by the tidal wave ahead.

However , Also i recognized that even if I actually skipped the thrills from the first wave, I would have got ended up the same. There was nor a harbor nor breakwater to calm the oceans on the ominous horizon. Therefore i enjoyed the ride. Exactly what else could I do?

Irish banker Rich Cantillon is known for the statement that the first recipients of new money benefit at the expense of later ones. This is due to the first recipients being able to utilize the new money to purchase products, assets, services, etc ., whilst prices remain relatively low— these are the winners. When that money circulates directly into subsequent hands, prices have risen, offsetting any advantage. And, finally, when that will money passes into later hands, prices have exceeded the nominal value of inflated wallets— these folks are the duds.

So when inflation— the increase in the money supply— occurs, you want to be riding the particular crest of the wave, allowing others crash as it splits over them.

Now the covid wave was huge— huge. And it also kept on going. In all situations, I was a first recipient, as Uncle Sam stuffed my bank account on a regular basis— thousands and thousands of dollars, all totaled. With that money, I bought stuff, took trips, and so forth   I really enjoyed being a first recipient. But then the wave of money stopped.  

That was keep away from, right around the time alarms had been sounding the approaching trouble.

I only rode the small wave which was bread and circuses for your masses. It was the payoff— the sleight of hand— which veiled the looming wave that dwarfed the first. The dollars churning in the groundswell and frothing off the white caps of that alluring breaker, though somewhat postponed, were first received by friends and family, so to speak, of govt. And it’s the money rushing from the friends and family wave that has myself crashing daily at the pump and grocery store.

You can choose to ride the bore tide, risking the murky waters and mudflats. Or you can pick a vista along the road or mountainside to watch others surf the sea. It might be your choice. However , when the wave is an inflationary one, there is absolutely no means to opt out of crest and crash. Your only hope is to be connected to influence and power so that the bulk of the money passes through your hands first. Otherwise, the best that can be done is enjoy some enjoyable before it all comes ramming down on you.

So , on one hand, you enjoy at the expense of others, departing suffering in your wake,   while on the other hand, you can, at best, taste a few falls of the Cantillon waters prior to drowning in its depths. None are ways to live a great life. Neither are methods to secure a future.

The Cantillon effect is not only theoretical, it’s real. For almost two years, I rode a little Cantillon wave. And now, the colossal one is crashing all around me. When I was driving the ridge, I understood what was coming. Yet, much like King Canute, I had simply no power to influence the tide. I could only ride my wave until the tidal wave overtook me. And now I am paying, and paying, for that wave that has eroded the particular sand under my feet, fortifying the balance sheets of those better connected.

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