link to original reddit post by /u/ocobot
Hi guys,
I've been trying to improve my knowledge of Austrian economics this year and I need help with the cantillon effect. I'm reading "Austrian Economics For Investors" and the authors do a great breakdown of the basics of the business cycle and how the federal reserve works. I understand that increasing the money supply distorts interest rates and causes mal-investments. I get that concept fairly well but what I don't understand is why do the wealthy benefit from money printing? Why do asset prices (stocks, fine art, real estate, etc) rapidly increase before consumer goods (which increase later due to the inevitable inflation.)
Do the rich and wealthy have access to the newly created money first and invest it before it reaches the general economy? Do large companies borrow money on the cheap and buyback stock?
I've heard Dave Smith and Tom Woods discuss how easy money policy benefits connected bankers and not regular people but I don't fully grasp the connection yet.
Below is a link to the book if you are interested:
Austrian Economics For Investors (book)
Thanks!