The Cantillion Effect: Why Government Handouts & Paper Fututures Markets Eliminate Real Price Discovery

imagesBy SD Contributor AGXIIK:

As free or low priced money floods any economic system it skews the value of the FIAT and the goods paid for by this funny money.
The government pays out $1,000,000,000,000 (trillion) in transfer payments a year.  
This is big money that has no effort, sweat or value recognition embedded in it.  It’s free money.

Similarly, in gold & silver, price discovery has been blown all to pieces because of another free money crowd, the paper traders. [Read more...]