Why Debt Runs the Modern Economy: The Cantillon Effect
From Talking Property Development with John Kenel by John Kenel
March 1, 2026 · 3 min · Episode 39
About this episode
The episode discusses the Cantillon Effect and how debt and government actions have shaped the modern economy.
The Cantillon Effect explains who benefits first when money gets created, but it doesn't explain when things really went off the rails. For that, you need to look at what happened next. World War I changed everything. Before then, money was tied to gold and governments were constrained. Wars are expensive, so they borrowed and printed. What started as 'temporary emergency measures' became permanent features of the system. By 1971, Nixon closed the gold window completely. From that point on, money became whatever government said it was. Inflation stopped being an accident and became a feature. Once you see the pattern - governments like spending, voters don't like taxes, printing fills the gap - a lot of things stop feeling random. Asset bubbles, cost of living pressures, the wealth gap between savers and asset owners. It's not conspiracy, just incentives. And if this is the system, you either understand it or slowly get ground up by it. Sign up to my FREE weekly newsletter to improve your finances: https://newsletter.thepropertydevelopmentclub.com/yt Free guide to wills, trusts & passing down your wealth properly: https://wealth.thepropertydevelopmentclub.com/ Learn how to…
People in this episode
Host: John Kenel
Topics covered
- Cantillon Effect
- debt economy
- inflation
- government spending
- asset bubbles
- wealth gap
Keywords
- Cantillon Effect
- debt
- inflation
- government spending
- asset bubbles
- wealth gap
- economic history
Mentioned in this episode
Organizations: The Property Development Club, Nixon
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