New money is never neutral.
It has to enter somewhere. It reaches people in an order. The order is the entire story, and almost nobody discusses it.
https://drop.amboss.tech/qe-cantillon-explainer.html?utm_source=x&utm_medium=social&utm_campaign=qe-cantillon-explainerThe comforting version: money supply goes up, all prices go up by the same amount, nobody is really better or worse off.
That has never once been true. Prices update as money is spent, one transaction at a time.
Whoever spends first buys at yesterday's prices.
Richard Cantillon speculated in John Law's Mississippi Company around 1720 and walked away a multimillionaire while the scheme collapsed on everyone else.
He then wrote down exactly why it had worked.
The man who named the effect had already used it.
Here is the part people miss: QE is not printing money and handing it out.
It is a swap. The central bank creates reserves and buys bonds. A pension fund that held a bond now holds money.
Nothing was given away. The composition of who holds what simply changed.
Which makes the next bit sharper, not softer.
That pension fund cannot sit on cash. It has liabilities. So it buys the next asset along. And that seller buys the next one.
The Bank of England said it plainly in 2012: asset purchases pushed up equities at least as much as gilts.
The same 2012 paper, written at the Treasury Committee's request, reported who owned those assets.
The top 5% of households held 40% of the household financial assets held outside pension funds.
A policy designed to raise asset prices pays out in proportion to who holds them.
US data, 2000 to 2025, from FRED:
Median full-time prime-age wage: +108%
Consumer prices: +86%
House prices: +224%
Real wages actually rose about 12%. The house still got 55% more expensive measured in weeks of that wage.
Both are true at once.
We built it as an interactive page. The queue model runs in your browser. The 25 years of wage and house data are real FRED series. Section 07 covers what economists still dispute.
https://drop.amboss.tech/qe-cantillon-explainer.html?utm_source=x&utm_medium=social&utm_campaign=qe-cantillon-explainer
