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What is the Cantillon Effect? - Exponential Economy #3 - YouTube
Channel: The Billion Dollar Secret
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hi today from zinnian germany
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today we'll be talking about the
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cantilong effect
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see you in the next part
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[Music]
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what is the cantilong effect and where
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does it come from cantilong effect comes
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from an irish french economist called
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richard cantilong
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who in 1730 published an essay
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on the nature of trade
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in general and in that
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essay he describes the
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mechanics of money of
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money creation and
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how it affects the economy kent alone
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states
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that when the money is created it
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doesn't penetrate
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the economy in equal way in every area
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of the economy
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it first gets uh to the
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financial class to the people who are
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close to the money
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and when they spend the money depending
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on their preferences
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it gets into these branches in these
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industries
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that where they spend the money and then
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it somehow goes or
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flows through the economy as in waves
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step by step and of course money
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creation
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causes inflation but when the money
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is spent the first time the people who
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spend the money
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that got the money from the printer so
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to say
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they buy the goods at low prices at the
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old prices
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but then the money gets to more and more
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people
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and the further away you are from the
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money from the money creation
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the higher the prices that you encounter
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so the people at the end of that chain
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have to buy the same goods at higher
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prices
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so they get the least advantage of that
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money
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and there are people in the system that
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the money
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don't get to and these people they don't
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get any advantage of
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that newly created money on the other
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hand the old money
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that is in the system that is uh owned
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by the people in the economy this money
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gets inflated by the newly created money
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so this is the cantilon effect that says
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that the
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people who are closer to the printer
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gets the most advantage
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of uh of the money of the newly created
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money
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and the farther from the printer the
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less advantage you get and
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actually you are more and more in
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disadvantage because
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uh the old money that you possess gets
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inflated and you get only a small
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percentage of the newly created money so
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to say so the
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county loan effect says that the
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people closer to the money get advantage
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of that money
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at the expense of people who are farther
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from the
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from the printer and the wealth the
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purchasing power is transferred away
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from these people
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further away from the printer from the
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old money so to say
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uh to the people with the new money
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and who are the people with the new
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money who are the people close to the
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printer
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first of all uh the of course the banks
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and then um of course financial
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institutions of other kinds then we have
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the the state itself i mean by
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issuing bonds and so to say
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getting freshly created money from the
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purchases of the bonds or from the
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central banks
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more or less directly or more or less
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indirectly
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and then we have of course state
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companies and all the companies that
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somehow enjoy
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the support of the state by subsidies
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maybe by
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political support
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or financial support of the state of any
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art
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also government contractors
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so these are the profiters of uh this
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um money creation and of county loan
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effect and who are
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uh the losers of the cantilon effect of
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that phenomenon of course the people
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who work for the money who are at the
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end
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so to say of the food chain or the
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people who the new money
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doesn't reach but they have to pay
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higher prices
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so this is the county loan effect tell
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me where you
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observed the cantillon effect how can
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you take advantage maybe of that
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country own effect how can you use that
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in your life in business
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leave a comment below this video give me
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share this video with your loved ones
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with your friend one day they will thank
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you for that i talk here a lot about
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economy
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about business about doing business on
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the highest level
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i talk here about the best entrepreneurs
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in the world
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how they self-made billionaires of our
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world think and act and i talk here
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also about money about cryptocurrencies
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so if you like this video
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you will certainly like my other videos
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i invite you to watch them that's it for
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today from
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singing germany i wish you a fantastic
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day let's do something extraordinary
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today
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