The Top 1% & The Cantillon Effect

The Top 1% & The Cantillon Effect

The failed attempt to form a European Super League has been largely viewed as an attempt by Top European Clubs to cash in on the opportunity presented in the wake of the Economic chaos caused by the Coronavirus Pandemic ShockHowever, another potential explanation for the attempt to form the European Super League may lie in the Cantillon Effect as a direct result of the oversupply of money caused by high levels of money printing since the Covid-19 Pandemic struck which has concentrated wealth in the Top 1%.

The link between the failed European Superleague, the Cantillon Effect and the Top 1% appears more clearly once we consider the Top 1% Financiers of the European Super Leauge venture, and what this may reveal about the State of the Global Economy and Society in general.

The European Super League was financed by Top 1% Hedgefund JP Morgan, and for this reason, it may be a symptom of the current Asset Bubble caused by the overprinting of the US Dollar since the Coronavirus Pandemic accelerated a Cantillon Effect which has seen the spread of Capital into more speculative ventures around the world like the European Super League as US and International Markets are unable to absorb the full influx of cheap money now in the hands of the Top 1%.

The Cantillon Effect Explained

A Cantillon effect  which explains why wealth continues to be concentrated in the Top 1% was first described by 18th-century economist Richard Cantillon who observed that money is not neutral because of the nature of price changes that result from an increase in the money supply.

In particular, Mark Cantillon noted that supplying lots of cheap money through the Banking system means that newly issued money will have an unequal effect on different parts of the Economy, and ultimately Society itself due to the pattern of wealth acquisition and distribution that is created when new Money is introduced into the Economy only through the Banking system.

Since Money enters the Economy at the specific point of the Banking system, it means that money has its highest value at this point it first enters the Financial system.

As the Transfer of money continues down the chain in Society over Time, the value of this money is progressively less than it was when it was first issued and entered the Financial System through the Banks.

The devaluation of money over Time means that those with first access to newly issued Money like the Top 1% always have the opportunity to acquire goods with newly issued currency at its highest value.

In this way the  Top 1% is able to insulate itself from inflation which is always passed on further down the line as the value of the currency depletes over Time.

Furthermore, because Banks always use newly issued currency at its highest value, it is cheaper for them to acquire assets then everyone else in Society.

This is known as the First Spender Advantage held by Cantillon Insiders such as Top 1% Banks and Hedgefunds who are able to gain wealth and value only by virtue of their proximity to the Money Printing Press.

The Bubble Cantillon Effect In The Post-Coronavirus Global Economy

According to the latest fiscal data about 25 percent of America’s GDP is being distributed in the form of Stimulus Money and Negative Interest Rate Bonds which enter the American Economy through Top 1%  Hedge Funds and other forms of Financial Business Rescues that reward Corporate failure and discourage real Capitalism as Stimulus Money is essentially directed towards keeping unprofitable Corporations alive instead of requiring them to go through the normal process of Business failure where they would face Liquidation or Restructuring as would be the case in a normal Capitalist system.

Top 1% US Hedge Fund JP Morgan can thus be understood as a Cantillon Insider whose proximity to the US Dollar Money Printing Press has allowed it to amass large volumes of interest free Capital searching for Investments outside the current  Post Coronavirus Bubble Markets which have also seen the rise of Big Tech.

The Top 1% & The European Super League

The fact the European Super League was financed by Top 1% Hedge Fund JP Morgan may be an indication of the kind of speculative ventures that are now being carried out by the Top 1%  from the cheap money being printed in the United States which is first available to entities like Hedge Funds with the Cantillon First Spender Advantage.

Top 1% US-based financial services firm JP Morgan was backed the European Superl League venture  and it was prepared to spend Billions in incentives and prize money to make sure the European Super League became a reality.

In this context, a speculative Top 1% venture of the size of the European Super League in a depressed Global Economy may therefore be more a symbol of the uneven dispartities in wealth we have in Late Stage Capitalist Society itself than its about the European Clubs seeking to save themselves from the ravages of the Coronavirus Pandemic Shock by leveraging their Brands.

It must be remembered that the current Stock Market highs also do not benefit the ordinary man as the bottom 50% hold 0.7% of the Total Equity Market, while the Top 10% contol 87.2%, and the Top 1% holds 51.8%.

In other words, the 50 richest people in the world have as much wealth as the 165 million people at the bottom.

From this perspective, the European Super League may be useful as an indicator of future Wealth Capture strategies of the Top 1% as they seek to extract the most value and acquire as much wealth as they can from their proximity to the Printing Press before the current Bubble Market collapses, and we enter a new Economic Era which may be dominated by Cryptocurrency and perhaps Gold. 

The Cantillon Effect Video