21 sats \ 1 reply \ @Undisciplined 6 Sep \ parent \ on: Is The "Everything Bubble" About To Pop? econ
Since the dollar is the global reserve currency, when we print new money and spend it here, prices also rise everywhere else that uses dollars. Those other places don't get to spend newly created dollars, but they do experience the inflation.
This is what Cantillon Effects are. The first spenders of newly printed money benefit at the expense of the later spenders, because prices don't adjust until after the money is spent into the economy. America spends dollars first, then they slowly trickle out to the rest of the world.
Thanks!
The Cantillon that discusses about the booms and busts! I got it now. So, USA spends dollars at the expense of rest of the world. This is definitely one big issue which the Russians and Chinese already know, not surprised that they are dedollarizing because they are foes to America. ECB with EURO aimed at the same thing. EURO was invented with the aim to overcome dollar supremacy, but it has now failed! Am I right?
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