Get started

Economics

US Inflation Alert: How Will Markets React?Investors are facing a busy week of economic data that includes the release of consumer price and producer price index data for March on Wednesday and Thursday (US time), respectively. The results of these reports will help determine whether or not the Fed will pause or end its rate-hiking campaign. While investors are leaning towards a continuation of the Fed's tightening campaign, the possibility of a pause should not be underestimated. In February 2023, the annual inflation rate in the US decreased to 6%, the lowest since September 2021, compared to January's 6.4%. Market expectations for this March's data predict a significant drop to 5.2%. Importantly, if inflationary pressures do not weaken as anticipated, traders may increase their bets on additional rate hikes beyond the predicted 25-basis-points in May (or even revise their expectations for the May hike). At the beginning of the week, investors responded to the March jobs report, which was released on Good Friday, with nonfarm payrolls growing by 236,000 for the month. This was roughly in line with the market estimate of 230,000, and the unemployment rate fell to 3.5% compared to the previous month's 3.6%. As a result, the US dollar lost ground in early Monday trading, with the EUR/USD double peaking before traders lost confidence, causing the euro to fall below Monday's opening and crash through 1.0885. This level has served as the pair's bottom several times this month, as well as acting as a barrier for a longer-term rising trendline. Traders might now focus on 1.0822 and 1.0800 as the next downside targets. Following the release of CPI data, the Federal Reserve is expected to issue the latest Federal Open Market Committee (FOMC) meeting minutes.
by BlackBull_Markets
How to be careful against manipulation while trading Forex?It all started on the morning of December 20, 2021. The "Up Tick Rule" was implemented for one day in the stock market. The Up Tick Rule is an application that reduces the declines caused by short selling in stocks and is implemented to limit selling pressure. The implementation method of this rule is that even though the capital market instrument subject to short selling can be realized at a price higher than the last transaction price, the short selling transaction can also be made at the last transaction price level if the last transaction price of the capital market instrument subject to short selling is higher than the previous price. Thus, with the implementation of this rule, the possibility of the dollar falling is minimized. The dollar is raised up to 18.36 Turkish liras. At 18:15, after the daytime market closed, the manipulation began. On the evening of December 20, 2021, the Central Bank started selling dollars through public banks at very low exchange rates. The aim was to transfer capital to some of the supporters by selling the Central Bank's dollars for less than 10 Turkish liras, but the dollar only fell to 12.49 Turkish liras. Because an investor who was unaware of this operation bought $1.5 billion at an average rate of 12.50 Turkish liras. Since the Central Bank had exhausted its selling limit for that day, it couldn't sell any more dollars. Thus, the operation remained incomplete. With the panic that started in the market, BIST presented an announcement for approval at 09:25 on the morning of December 21, 2021. A trap was set for stock market investors to complete the operation. At 09:46 (16 minutes after the opening of the stock exchange), the approval of the announcement was published on KAP. In this announcement, the limit for selling dollars at a discount of up to 10% was increased to 80%. However, during the 16-minute period before investors learned of this decision, the Central Bank's dollar reserves, which had started selling at 18.22 Turkish liras on the new day, had already been sold down to the level of 3.65 Turkish liras. (Although this level of 3.65 Turkish liras may not be visible on the Tradingview chart, data is available on applications such as Bloomberg Terminal and Matriks.) The identity of those who had prior knowledge and purchased dollars at almost no cost is unknown. The Central Bank has been robbed, and those who were aware of the operation have made large profits, while others have lost their money and assets. Instead of protecting investors against manipulation, it looks like SPK and BIST have facilitated the setting of traps for them. The most basic thing we can do to protect ourselves against such manipulations is to be vigilant when buying and selling currencies of countries with low credibility.
by YavuzAkbay
1
A Look at the Turkish EconomyAs we all know, the increase in foreign currency increases the general product prices extraordinarily, as it increases the input costs. The rise of the foreign exchange is a phenomenon that a country does not want. Every country aims to keep the exchange rate stable. But for some reason, Turkey came out of these countries. As can be seen from this chart, from 2006 to 2020, Turkey continued to print money with a certain pattern. This is an acceptable factor for each country under certain conditions. The money supply, which increased with a trend of 23 degrees, started to rise more sharply after 2020, and especially after March 2021, the trend reached 53 degrees. This trend change is a clear indication of how fast the printing of money is. Therefore, as the money supply increases, there is a natural depreciation of the currency (Orange line shows the rising Dollar against the Turkish Lira). In the same period, interest rates were reduced, as can be seen from the black line. By lowering interest rates, what a country normally aims at is to create consumption demand by reducing borrowing costs. Therefore, the demand for consumption has increased, and with it, demand inflation has arisen. Meanwhile, printing money decreased the value of the Turkish Lira (the exchange rate rose), which increased the input costs. The increase in input costs was reflected in the sales prices of the products. Therefore, inflation was fueled by both demand and foreign currency. It will be impossible to know why the Turkish government did this, why it deliberately ignited inflation, which no economist can explain. If you have an idea, you can write it in the comments. Thanks.
ECONOMICS:TRM2
by YavuzAkbay
1
Bitcoin Macro outlook 2023 . . .. . . and why is wise being Bearish on Bitcoin & crypto at the moment. Hi everyone , I make this super simple, so it even looks stupid. 1 Month Time Frame We see that after peeking at 69k price reversed and our modus operandi is sell to buy to sell . Meaning, we have large sells followed by buying just to proceed next large sell once price is elevated. This MO taking between 2-3 months in each shift. We already had our upside move in 2023 = price are elevated... ... global macro economy outlook is not so great either with high interest rates & inflation & situation between Ukrain- Russia not bringing any stability into west world either. Monthly candle close at around 15hours. If closing price is lower then 23315.95$ odds are highly shifting to favor further *selling TLTR: ´ We are up a lot from bottom, if we close under 23315,95$ on 1M, we have high probability that it will go to seek other end of liquidity upcoming months´ Joe
INDEX:BTCUSDShort
by cryptocapitaltrading
7
DXY - Will US Dollar history of 1981 repeat? 🔲DXY Will the USD find support at this important monthly line🔲and history of 1981 repeat with a bullish run⁉️🚨 Personally I don't expect that due to the parabolic $-M1 Supply But what are your thoughts on that dear #Bitcoin and Crypto Nation? Let me know your thoughts in the comments🤗 ⬇️⬇️⬇️ Likes and Follow for updates appreciated🤗 Disclaimer: Not financial advice Do your own research before investing The content shared is for educational purposes only and is my personal opinion
TVC:DXY
by Crypto4Everybody
Bitcoin - RVGI indicator❌cross just occurred🔵🚨👀The RVGI indicator❌cross just occurred🔵🚨🚨🚨👀 Look at the great entry points🟢for Bitcoin when these crosses❌occurred in the past on the US10Y-US02Y chart dear BTC and Crypto Nation💥🚀😎 Let me know your thoughts in the comments🤗 ⬇️⬇️⬇️ Likes and Follow for updates appreciated🤗 Disclaimer: Not financial advice Do your own research before investing The content shared is for educational purposes only and is my personal opinion
INDEX:BTCUSDLong
by Crypto4Everybody
Market Cycles: What They Are and the Psychology Behind Them All markets go through cycles of expansion and contraction. 📈When a market is in an expansion phase (an uptrend), there is a sentiment of optimism, belief, and greed. Typically, these are the main emotions that lead to a strong buying activity. Sometimes, a strong sense of greed and belief overtakes the market in such a way that a financial bubble can form. In such a scenario, many investors become irrational, losing sight of the actual value and buying an asset only because they believe the market will continue to rise. They get greedy and irrational by the impressive bullish movement, expecting to make huge profits. As the market gets heavily overbought, the local top is created. In general, this is considered to be the point of the highest risk. In some cases, the market will start a sideways movement while smart money steadily sells the asset. This is also called the distribution stage. However, some markets don't present a clear distribution stage, and the downtrend starts sharply after the top is reached. ➖➖➖➖➖➖➖➖➖ 📉 When the market starts reversing, the euphoric mood can quickly turn into complacency, as many traders refuse to admit that the uptrend came to an end. As prices continue to fall, the market sentiment quickly moves to the bearish side. It often includes feelings of anxiety, denial, and panic. In this context, by the anxiety we mean the moment when bullish biased market participants start to question why the price is falling, which soon leads to the denial stage. The denial period is marked by a sense of unacceptance. Many investors keep holding their losing positions, either because "it's too late to sell" or because they want still believe that "the market will come back soon." But as the prices drop even lower, the selling wave gets stronger. At this point, fear and panic often lead to what is called a market capitulation (when holders give up and sell their assets close to the local bottom). Eventually, the downtrend stops as the volatility decreases and the market stabilizes. Typically, the market experiences sideways movements before feelings of hope and optimism start arising again. Such a sideways period is called the accumulation stage. Let me know, traders, what do you want to learn in the next educational post?
Education
by VasilyTrader
6
Bitcoin & Consumer Confidence Index by University of Michigan⚫️Update: US Consumer Confidence Index by University of Michigan⚫️ Index with a bear channel breakout on the way up - needs to be confirmed above 65.2 dear Bitcoin and Crypto Nation 🚨🚨🚨 Exciting to see if a BTC🟠 #bullish run begins afterwards Let me know your thoughts in the comments🤗 ⬇️⬇️⬇️ Likes and Follow for updates appreciated🤗 Disclaimer: Not financial advice Do your own research before investing The content shared is for educational purposes only and is my personal opinion
ECONOMICS:USCCI
by Crypto4Everybody
A major bull trap has been set.The current level of euphoria and speculation on Wall Street is likely to go down in history in the same way that the misplaced optimism of speculators in 1929 was immortalized by the tremendous crash and ensuing depression. The current dynamics at play are more similar to that period than most realize. Many potential catalysts for the Global Financial Crisis 2.0 are beginning to rear their heads, including things such as: -The auto loan bubble -The residential & commercial real estate bubble -The private equity and venture capital bubble -The largest losses in the total bond market in generations -Highest level of Federal Debt to GDP in US history and extremely high level of consumer & corporate debt in US history -The most overvalued market based on forward earnings in history (Based on my expectations of S&P 2023 earnings will fall below 140). Peak margins above -13% coming back under 10% will also help to drive this. -The fastest pace of interest rate hikes since Paul Volcker and $90 billion of quantitative tightening per month. -The crypto bubble implosion where many exchanges are likely to fail due to their ponzi-like staking dynamics and unprofitable nature of exchanges like Coinbase. We are starting to see the beginnings of the financial contagion from FTX into other exchanges and coins. This is happening in an industry valued at over $3 trillion at its peak. -The Chinese real estate crisis and recession -The energy crisis which has curtailed over 20% of EU industrial capacity and is sending Europe into a recession. This is leading to increased energy costs around the world. -Looming sovereign debt crises & currency crises for emerging and certain developed economies. - Monetary growth is contracting at the highest pace since the Great Depression. The $1.6 trillion auto loan bubble is reminiscent of the subprime lending bubble. There were incredibly loose lending standards in this auto loan bubble, where people that received federal stimulus checks were able to claim these as income. This entitled them to larger sized loans than they would have otherwise had access too. Many of these loans were made at over 130% loan to value ratio. These loans have been packaged up as bonds and sold off to investors hungry in search for yield in a world of artificially low interest rates, suppressed by the Fed for the better part of 14 years since the Global Financial Crisis. The amount of delinquent auto loans has continued to increase, and the looming crisis represents a huge threat to financial stability. As real wages and employment continue to fall, the amount of delinquent loans will continue to rise. Earnings for the S&P 500 in Q3 have already started to contract more than 5% year over year (excluding energy) and yet many analysts still expect some, to no growth of earnings in 2023. Earnings are likely to collapse over 40% in 2023, pressured by falling consumer demand and falling operating margins. Consumer sentiment registered the worst sentiment among US consumers since the great depression. All of the Fed manufacturing and service data components show comparable data now to data being released in mid 2008 to the spring of 2009, all with continuously negative trends. Capital expenditures have begun decreasing and mass layoffs are just beginning. 37% of US small businesses could not pay their rent in full in October. Many companies will be forced to close their doors permanently and layoff their entire staff. Consumption began to fall rapidly after the Fed began quantitative tightening and ended quantitative easing. The effects finally began hitting company earnings largely in Q3, with much more pain to follow. Meanwhile, many companies continued to hire large amounts of people unaware that consumption would continue to collapse. As asset prices fall further and inflation stays elevated, real wages will continue falling. Student loan payments begin again at the start of 2023, further harming consumer sentiment. Money supply growth began stagnating early in the year in 1929 and the federal government began to tighten spending with the New Deal programs in 1936 before the crash happened in 1937. Bank balance sheets have been flat for 2022 while the central bank balance sheet has been contracting leading to a slight contraction in the money supply. The contracting growth of monetary supply and fast paced increases in interest rates will lead to a large-scale downturn in GDP. On a technical basis, the current market setup looks very similar to 1929, 1937, 1973-1974, 1987, and 2008. All of which had major rallies that topped in late summer / fall before crashing over 30%. All of these crashes took place over the span of less than 3 months, with the majority of the percentage decline occurring over a period of 2-3 weeks. There are dozens of companies that are virtually guaranteed to go bust in this downturn based on an overview of their financials. There have never been so many listed companies that reached valuations in the billions at their peak with no earnings . Many companies at the time of this writing still have valuations of over 6 times sales and many companies such as Coinbase, Uber, and Rivian are still valued at over $10 billion market caps whilst losing hundreds of millions of dollars per quarter. The dozens of zombie companies in the S&P 500 are being forced into rolling their debts at higher interest rates while their earnings fall. This will be the largest debt deleveraging cycle in the US economy since the great depression, because this is the largest accumulation of bad debts since the roaring twenties. It is not long until the credit risk is truly realized by market participants, and interest rates spike throughout the economy. This would include the inter-bank lending rate and junk rated bonds which would lead to a financial crisis. The longer the Fed’s quantitative tightening runs, the more inevitable the financial crisis becomes. The Fed ran the balance sheet down around $600 billion over the course of 2018 into late summer of 2019 before inter-bank lending rates started to spike. This time, the Fed has run the balance sheet down close to $300 billion so far with a plan of reaching over a $600 billion runoff in Q1 of 2023. The hopes for a Fed pivot are misplaced. A Fed pivot on interest rate hikes and even a reversal of the rate hikes cannot re-incentivize people to borrow . In a contracting credit cycle and business cycle downturn, debt begins to be paid off and defaulted on rather than excessively accumulated. The demand to borrow collapses even if interest rates were lowered by the Fed. Therefore, bear markets and recessions usually don’t end until many months after the Fed has already begun cutting interest rates. This was seen in the Great Recession and the dot com bubble of 2000; where the market didn’t bottom until over 18 months after the Fed began cutting rates.
TVC:NDQShort
by Alexander_C_Lambert
Do you Hear Lumber Screaming?Lumber is at a critical inflection point. Its likely telling us that Central bank policy is about to experience more inflation if they start to ease to soon. If Lumber continues to rally, its screaming more housing inflation could be around the corner. Since we have a major Technical Topping formation in play, Lumber is still vulnerable to more downside which could also mean the housing market has much softer prices ahead. If lumber is to show nay chance of negating this bearish pattern it needs to close above the yellow trendline for 2 consecutive weeks.
L
by Trading-Capital
💵THE WORLD IN DEBT💵 ☑️The fact that the whole world is in massive Debt that can not be repaid is a buzzphrase that was around for like 20 years already. 20 years passed and nothing bad has happened, so what to worry about? In fact an entire political and economic movement called MMT or a modern monetary theory emerged claiming that government debt does not matter and that we can, you guessed it, print as much as we need(kinda) ☑️But the size of the debt itself was never really and issue so long as the government or a big company could service the debts. That is if their cashflow was positive enough to cover the interest payments on the debt. Now however, as the FED is raising rates, this is an issue. ☑️And its not the USA who’s pile of debt we need to be worried about(they are borrowing in the currency they can print themselves, remember?) but rather the rest of the world and the companies. The majority of developing countries don’t have the internal capital required for development, so they need to borrow on the international financial markets in Dollars. And these counties are now facing a perfect storm of a higher cost of new borrowings in Dollars, lower revenues from foreign trade due to recession(and yes we are in a recession, Wake up) and the massive energy and food costs due to the war in Ukraine and the problems caused by the supply chain crisis. ☑️Most big public companies aren’t doing great either. The share of listed companies with the debt servicing costs higher than the profits is now more than 25% and if we exclude the accounting and financial engineering shenanigans, it is save to say that this share is close to 30%. ☑️So the third of the economy is outright insolvent. Multiple countries will either default soon or will at least be plunge into civil and economic unrest and go the way of Sri-Lanka, Pakistan and others… And Jerome Powell said that he aint stopping and that the Fed funds rate should go up by at least 2 percentage points more. So instead of the collapse of the USA, we are likely to see a chain reaction debt crisis In the rest of the world unless the FED changes its mind… I Hope you guys learned something new today✅ Wish you all Best Of Luck👍 😇And may the odds be always in your favor😇 Do you like this post? Do you want more articles like that?
Education
by ProSignalsFx
7
Bitcoin and the Philly Fed Manufacturing Indexive 🔴☑️⭐️🟢Update Bitcoin and the Philly Fed Manufacturing Index possible bullish scenario when... 1. Index is negative🔴☑️ 2. Index breaks trendline⭐️ 3. enjoy the BTC bull run🟢 Today bad value -13.8⬆️more patience necessary🚨 Let me know your thoughts in the comments🤗 ⬇️⬇️⬇️ Likes and Follow for updates appreciated🤗 Disclaimer: Not financial advice Do your own research before investing The content shared is for educational purposes only and is my personal opinion
INDEX:BTCUSD
by Crypto4Everybody
US Weekly Fundamental Recap & macro thoughts - Jan 15Let’s take a look at some data from this last week. In summary: - CPI continued to inch lower (7.1 to 6.5) - Unemployment claims remained static (~200k) - Consumer sentiment on the rise (59.7 to 64.6) - S&P held around 4k for the close of the week and seems to be starting off strong with further pullback on the US dollar. Keep in mind interest rates remain high, along with inflation though we are seeing some progress. Lets look at some other important factors to consider relating to high interest rates. We will be here a while, right? The state of the overall economy: If the economy is strong, businesses and consumers may be more likely to continue spending and borrowing despite higher interest rates. - Consumer spending is holding, but consumer debt is on the rise. If debt continues to increase / remain high, that we should see consumer spending decline. The leading indicator is there.. The level of inflation: Higher interest rates are often used as a tool to combat inflation, so if inflation is already high, the impact of higher interest rates on the economy may be less severe. - Inflation remains high, meaning we should see less effect on the economy oooor, it just takes a little longer to grip. I believe that’s where we are sitting. The wait.. The level of consumer and business confidence: If consumers and businesses are confident in the economy, they may be more likely to continue spending and borrowing despite higher interest rates. - Consumer confidence is low but picking up. Why is this? My thoughts are because we still have jobs, inflation is coming down and the majority still have money to spend. Though if debt continues to rise – that will change. - The level of consumer debt: Higher interest rates can make it more expensive for consumers to carry debt, which can lead to a decrease in consumer spending and potentially increase in defaults. - When the Federal Reserve raises the federal funds rate, it generally leads to an increase in interest rates for credit cards. This is because as the cost of borrowing money goes up for banks, they will pass on the increased cost to consumers in the form of higher interest rates on credit card loans. - It's important to note that credit card interest rates are also affected by the overall level of demand for credit, the creditworthiness of borrowers, the level of competition among credit card issuers, and other factors. So, there is no a direct relationship between the federal funds rate and credit card interest rates, but the later one may be affected by the former. The level of international trade: Higher interest rates can make a country's exports more expensive, which can decrease demand for them, and in turn, negatively impact the labor market. - Exports remain steady into 2022 – with the US dollar weakening, this could help ease some of the pain felt from higher interest rates The level of government spending: Government spending can act as a buffer to the negative impact of higher interest rates on the economy. - Well, we are raising the debt ceiling, again. Spending remains relatively flat by the big cats. The level of interest rates relative to other countries: Higher interest rates in one country can make its assets less attractive to foreign investors, potentially leading to a decrease in capital inflows, a stronger currency and a decrease in exports. - We have seen decline in investor debt – does this mean more investment or mless? I honestly don’t know.. But there it is. My Conclusion: We are in interesting times, currently some major drivers are either static or improving. But the rates remain high – and will stay high, manufacturing indexes and housing prices continue to fall. These are leading me to believe that we could still see some lagging indicators to sag. Unless there is drastic news – the stock market should not see any major decline. S&P/NAS may inch higher this week. Looking ahead – the spoken words will be the most influential – time to listen.
FX:NAS100
by Scott_The_Chartist
2
Gold May Reach New All-Time Highs Early In Q3:2023My research suggests Gold may continue to rally above $2079 in early July 2023. I believe the current US/Global market crisis event is very unique - something many people fail to understand. Many professional analysts have gotten married to the 2008 market collapse scenario. I'm watching dozens of posts on social media and other sites where everyone is uber short. I don't understand why it seems so many people fail to understand the real context of the global markets right now. In my opinion, this is 2003-05 all over again - mixed with a bit of 1993~1997. Few people really understand what I'm talking about. Let's see if you can tell me what you see in the markets right now. The biggest opportunity of your life is about to unfold. Get ready for a big WAVE-5 Rally.
COMEX:GC1!Long
by BradMatheny
3
Bitcoin🟠and the Trimmed Mean PCE⚫️inflation rate👀The Trimmed Mean PCE inflation stable See the reverse of Bitcoin🟠and the Trimmed Mean PCE⚫️inflation rate👀 Do we see the next Top in PCE and a following #bullish momentum for BTC dear Crypto Nation😎 Let me know your thoughts in the comments🤗 ⬇️⬇️⬇️ Likes and Follow for updates appreciated🤗 Disclaimer: Not financial advice Do your own research before investing The content shared is for educational purposes only and is my personal opinion
FRED:PCETRIM12M159SFRBDALLong
by Crypto4Everybody
⚫️Existing Home Sales🔵Home prices🔴Top S&P500Not an easy chart but give it a try dear Bitcoin and Crypto Nation Look at connections of different Tops in financial crisis 2008 and possible hints for near future: ⚫️Top Existing Home Sales precursor of 🔵Top Home prices precursor of 🔴Top S&P500 Let me know your thoughts in the comments🤗 ⬇️⬇️⬇️ Likes and Follow for updates appreciated🤗 Disclaimer: Not financial advice Do your own research before investing The content shared is for educational purposes only and is my personal opinion
ECONOMICS:USEHS
by Crypto4Everybody
No secret‼️👀😉🔴inflation🔵rate⚫️marketsNo secret‼️👀😉 🔴inflation up⬆️ 🔵rate hikes⬆️ ⚫️markets down⬇️ 🔴inflation down⬇️ 🔵rate cuts⬇️ ⚫️markets up⬆️ Bitcoin and Crypto equal markets like DowJones NASDAQ and Co Chart 1 1972 - 1986 Chart 2 current situation - see update What do YOU expect in points of inflation? Let me know your thoughts in the comments🤗 ⬇️⬇️⬇️ Likes and Follow for updates appreciated🤗 Disclaimer: Not financial advice Do your own research before investing The content shared is for educational purposes only and is my personal opinion
TVC:DJI
by Crypto4Everybody
1
The Cantillon Effect And The Working ClassThe Cantillon effect is an economic phenomenon that disproportionately affects the working class. It's named after the 18th century French economist Richard Cantillon, who first studied the differences in income distribution between the wealthiest and poorest parts of society. In this blog post, we'll be exploring how the Cantillon effect works, and how it impacts the working class. Keep reading to learn more. Introduction to the Cantillon Effect The Cantillon Effect is an economic concept that explains how money creation benefits those at the beginning of the money supply chain and harms those at the end. It is an example of how the economy is rigged to work in favor of some, while leaving others behind. The new money created gives those at the top access to resources before new money reaches everyone else. They use this new money to purchase assets, goods, and services before prices increase. This furthers a cycle of wealth inequality, since those with new money get wealthier faster than those without. Understanding the Cantillon Effect is essential for anyone looking to create a more equitable and prosperous economy for all. It is an example of how the economy is designed to favor those with access to monetary policy decisions, such as banks and large corporations. This means wages for everyday workers remain stagnant while those at the top, with influence and resources, reap the rewards of increased wages and greater purchasing power. So while wages may stay the same, prices of goods and services are constantly increasing - ensuring more money flows to those in charge. The result is an economy that is severely rigged in favor of those who have access to the levers of power, leaving everyday workers struggling to make ends meet. This effect can be seen in the widening wealth gap between the wealthy and poor, as well as the increasing income inequality in many countries around the world Additionally, the economy is heavily biased towards the wealthy, as evidenced by the massive corporate tax cuts and government bailouts that are disproportionally directed to large businesses and the affluent. This allows them to systematically hoard money while wages stagnate and regular people struggle to make ends meet. The result is an unfair system that benefits a small number of people while impoverishing countless others. It's time we take action and make sure the economy works for everyone, regardless of wealth and privilege. Analyzing the Distributional Impact of the Cantillon Effect The Cantillon Effect is the redistribution of wealth from lower to upper income brackets through inflation and other economic policies. It works like a hidden tax on earnings, taking purchasing power away from lower-income communities and giving it back to the wealthy through an ever-widening economic gap. This uneven playing field is created by policies such as high interest rates and quantitative easing that are designed to benefit those with investments and business interests. By implementing these strategies, the government is essentially rigging the game in favor of those with earnings and investments, while leaving those with less earnings behind. This creates an unbalanced economy that works for some, but not for others. It can be seen as a regressive tax, as it disproportionately impacts lower-income individuals and families more than those with higher incomes. This is an effort to explain how the economy is rigged to work for some and not others. Without a basic understanding of how the economic processes are designed, those of lower income are at a disadvantage since they lack the resources necessary to make their voices heard in the power structures that determine economic outcomes. Income inequality has widened across the country, leaving many people feeling like they don't have a fair chance to succeed in today's economy. Unfortunately, this rigged system works against those who are already at a disadvantage due to limited resources and opportunity. By analyzing the distributional impacts of this effect, we can gain a better understanding of how the economy is rigged to benefit some and not others Finally, it is clear that the working class has been severely affected by the fact that the economy is designed to work for some and not others. Through analyzing the distributional impacts of this effect, we can gain a better understanding of how the system is rigged and how to address it. It is essential that working people have access to fair, equitable economic opportunities and that we work together to ensure that this system is working for everyone. Who Benefits from the Cantillon Effect? The Cantillon Effect is a phenomenon that benefits those with access to new money before it reaches the general population. This is especially true when it comes to working class people, who usually struggle to keep their heads above water. Through this effect, individuals and businesses that are among the first to receive new money from a central bank’s stimulus package can benefit significantly before the working class ever sees any of it. This means the working class is essentially locked out of the opportunity to utilize new money to its full potential, essentially rigging the economy in favor of those with access to new money first. Historically, this has been the wealthy elite, who are able to use their money and influence to acquire more resources faster than others. This unequal system creates losers and winners, with those who have access to more money and resources having an undeniable advantage over those who don't. The result is an economy that works in favor of the wealthy elite, leaving the rest of us struggling for scraps. Not only does this create a gap between the ‘haves’ and ‘have-nots’, but it also limits economic opportunities as resources become increasingly concentrated in fewer hands. It’s clear that this system of economic inequality needs to be addressed in order to create a fairer economy that works for everyone. The Cantillon Effect is a major factor in income inequality, as those with the most money are able to benefit from price changes before everyone else does Next, it is important to recognize that the losers in the economic rig are those without easy access to capital or privileged information. The Cantillon Effect is a prime example of how those with the most money can benefit from capital before everyone else does and this serves to create an even larger gap in income inequality. It is within our power to change this system that so unfairly works for some and not others and it is worth fighting for a system where everyone has an equal chance at success. The Working Class and Its Inequitable Access to Resources The working class, particularly low-income and minority groups, often lack access to resources such as quality education and healthcare, leading to economic instability and inequality. This lack of access to resources, combined with less job security and decreased wages, creates a working environment that prevents working class people from achieving economic stability and success. To make matters worse, many working class individuals are also hindered by government policies that have been crafted to favor the wealthy. This is why the current economy is often referred to as "rigged," working for some while leaving others behind. It is our collective responsibility to ensure the working class has equal access to the same resources as wealthier individuals so they can create a more financially secure future. This is compounded by the unequal distribution of wealth amongst different classes, as those in the upper classes have more resources to acquire and increase their wealth. While it may appear that winners consistently come out on top, the reality is that their success is heavily influenced by the economic systems that are designed to work in their favor. For example, wealthy individuals can access tax incentives and investments which are not available to those with lower incomes. Furthermore, those with more money can influence the outcome of legislation, creating more winners and, unfortunately, more losers. It's a rigged system that keeps people in different financial classes divided and ensures that some individuals have access to more opportunities than others. In order to fix this injustice, policies should be enacted that support and empower those of lower income levels so that they can gain access to the same opportunities and resources available to the wealthy few Also, earnings should be made more equitable by instituting a better minimum wage, reducing earnings inequality and providing more training, education and job opportunities. These policies have the potential to create a more level playing field in the economy where individuals of all income levels have the same chances of success, which will ultimately benefit everyone. How Governments Are Failing to Redress Inequality Governments around the world are failing to implement policies that would promote economic equality and reduce inequality. This is especially tragic, considering working class families are the ones that suffer the most. The way our economy is currently set up, working class individuals lack the opportunity to ever rise up and gain economic security. Those with money, however, can benefit from tax breaks, investment opportunities, and other benefits that are often denied to working-class citizens. This blatant injustice needs to be addressed in order for working-class families to have a chance at achieving a comfortable financial future. This includes inadequate levels of taxation for wealthy individuals, as well as failing to enact taxes on capital gains and other investments. To add to this, inflation plays a vital role in how the economy is rigged in favor of the wealthy. Through inflation, the value of money decreases, making it harder for people to stay afloat and even harder for those with less money to maintain their standard of living. As inflation continues to devalue money, those at the top are able to remain wealthier than those who are not as fortunate. Furthermore, governments often favor large corporations through generous subsidies and tax breaks which further exacerbate the divide between the haves and the have-nots However, recessions are the most apparent example of how the economy is rigged to benefit some and not others. During recessions, large corporations are more likely to receive bailouts while those on the margins of society, who often have no savings or access to credit, face increasing unemployment, poverty and homelessness. Furthermore, governments often favor large corporations through generous subsidies and tax breaks which further exacerbate the divide between the haves and the have-nots. It's clear that our economic system is still broken and needs fundamental reform in order to create a fairer environment where everyone can prosper. Moving Forward: Proposals for Change We need to address underlying issues in the economy such as inequality, corporate monopolies, and the lack of opportunities for those with lower incomes in order to create a fairer working environment for all. The working class are particularly affected by the power imbalances that exist in the economy, where their wages and working conditions can be heavily impacted by large corporations. This is further exacerbated by an unjust taxation system that favor's those in higher socioeconomic positions, creating even more inequality and unfairness. If we aim to create a just economy where all have an equal chance to succeed, we must address these issues head-on. Only then can we create a more equitable system that truly works for everyone. We should focus on creating fair and equitable policies that are beneficial to everyone, regardless of income or background. Unfortunately, the current economic system is often designed to benefit those who already have money and new wealth creation opportunities. This means those with economic privilege and access to new money often continue to be the primary beneficiaries of financial resources, leaving those without money excluded from participating in new economic projects. With new policies and regulations that prioritize economic inclusion and justice, more people can benefit from new money creation opportunities, creating a more equitable economy. We need to invest in education, job training, and other initiatives that help those at risk of being marginalized by the current economic system Additionally, inflation is another factor that works against those with lower incomes. As inflation rises, their money is worth less and less, making it difficult for them to afford even the most basic necessities. To combat this, policy changes need to be made to ensure inflation does not adversely affect those with lower incomes. We also need to invest in education, job training, and other initiatives that help those at risk of being marginalized by the current economic system. Only then can we create a fair and equitable economy that works for everyone. In conclusion, the Cantillon effect is a complicated economic phenomenon that impacts the working class more than any other part of society, and results in a widening gap between the wealthiest and poorest individuals. It's important for us to understand this phenomenon and its implications, so that we can work towards more equitable economic policies in order to create a fairer and more prosperous society for all. Articles sourced for this paper Mainstream economists generally confine the discussion of the Richard Cantillon Effect to redistribution of wealth that occurs with a rise in the quantity of money. The Cantillon effect is the unequal shift in relative prices that results from changes in the money supply, which was first described by the 18th-century economist Richard Cantillon (who inspired political economists such as Adam Smith and David Ricardo). The basic thrust of Richard Cantillons extensive analysis is that changes in money lead to changes in relative prices, which alter productive plans and lead to different fixed investment patterns, so that the new money changes the real economy, with winners and losers. In The Essay, the economist Richard Cantillon describes the economic phenomenon of changes in relative prices across various parts of the economy in response to changes in money supply. The Cantillon effect refers to an unequal distribution of the new money supply throughout the economy, which leads to different rates of growth in different parts of the economy. The basic contours of the Cantillon effect, namely, some individuals having more purchasing power while others having less, are still at work in the same economy, if money creation channels allow them to do so. Cantons best-known idea, the eponymous Cantillon effect, describes the effects of the creation of money on the relative prices and inequality in wealth in society. In comparison, the Cantillon effect, the neglected classic theory on how money allocation affects personal wealth, is among the inequities of our present-day society. The Cantillon effect claims that the first recipients of new supplies of money are given an arbitrage opportunity, the ability to spend the money before prices rise. Changing the supply of money in the economy in order to manipulate relative price levels does not really change anything over the long term. In fact, even price-stabilized economies need injections of money to counteract deflationary effects from economic growth. They are seeing asset prices rise, but prices are still falling across the rest of the economy, because that is happening just seconds after the Federal Reserve is clearly bloating up the money supply. Specific parties get the chance to spend the new paper money on goods and assets that do not have prices reflecting an increased money supply. In the modern economic context, Cantillons theory implies that banks and major institutional investors get access first to new supplies of money, invest them to earn returns, e.g., on stock markets or various risky financial products, and drive up the prices of assets in which they invest. Because the terms inflation and deflation refer to broad, economy-wide changes in prices, the name biflation is a bit misleading, since it does not necessarily refer to any increases or declines in the overall price level, but rather to changes in relative prices caused by changes in the supply of money and credit in various markets. Cantillons own analysis also does not appear to incorporate Austrians own inescapable characteristics of booms and busts associated with the emergence of new money into credit markets; for Cantillon, all new money has a similar redistributive, unequal impact, regardless of whether it is spent in real economies or is introduced into the credit markets, which lowers interest rates. Cited Sources www.investopedia.com 0 www.spencertom.com 1 river.com 2 fee.org 3 mises.org 4 phemex.com 5 www.aier.org 6 www.promarket.org 7 cointelegraph.com 8
OANDA:SPX500USD
by RobinhoodFX
4