In a piece published by the Sun 24 hours Bradford De Long accused substantially macroeconomists do not know the history of economics modern, which is dotted with bubbles followed by recessions.
" If you ask a historian of modern economy like myself because the world is currently in the grip of a financial crisis and a severe economic downturn, I would say that this is only the latest episode in order time in a long string of bubbles, crack, crises and recessions dating back at least similar to the bubble of the early twenties of the nineteenth century due to the construction of canals, in 1825-1826 the failure of Pole, Thornton & Co, and the subsequent first recession in industrial Britain. We have witnessed the same phenomenon at other times in history, nel 1870, nel 1890, nel 1929, e nel 2000 . »
De Long va avanti e sottolinea che
« Per qualche motivo, i prezzi degli asset vanno fuori controllo e salgono a livelli insostenibili. Talvolta ciò è da imputare agli scadenti controlli interni alle società che remunerano in maniera spropositata i propri dipendenti per correre dei rischi. Altre volte causa di tutto sono le garanzie governative. Infine, altre volte ancora ogni cosa è semplicemente da ricondurre a una lunga serie di avvenimenti propizi che lascia che il mercato cada in preda a un ottimismo per nulla realistico.
Poi, però, arriva il tracollo, e when it does collapse, consequently, the retention of risk: everyone knows that occur in huge losses of financial assets that are not aware, but nobody has the faintest idea where they are. The collapse follows a real escape for salvation, followed in turn by a sharp drop in the velocity of circulation of money, as and that investors accumulate cash. And this fall in the velocity of circulation of money will cause a recession "
poor controls, excessive remuneration, government guarantees, auspicious events that make the market fall into prey to unrealistic optimism ... investors hoard money and cause a recession. Is not something missing in this story?
In the rest of the article's criticism of De Long hits the mainstream macroeconomists and is acceptable, all things considered, I would like to exploit the appeal of De Long to
" listen and learn from the Dick Sylla history of the bank bailout of Alexander Hamilton in 1825, from Charlie Calomiris the story of Overend, Gurney crisis, by Michael Bordo history of the first bankruptcy of Baring Brothers, and Barry Eichengreen, Christy Romer, Ben Bernanke and the history of the Great Depression "
Let, however, to hear the story from a different point of view, it can find a common factor in all these sequences of boom and bust.
Panic of 1819
to this crisis, the first in the United States due to the phenomenon of the economic cycle, our historic reference is Murray Rothbard with his book "The panic of 1819 .
The panic of 1819 was the first major U.S. economic crisis. For the first in American history there was a crisis of national scope that could not be simply and directly attributed to specific locations such as famine or restrictions or embargoes.
Rothbard tells us that this crisis arose as a result of measures taken during the war of 1812, when the U.S. government is indebted largely to finance the conflict. This high demand of funds was met by the banking system that took the opportunity to issue new banknotes which, however, were not backed by any gold deposit. When the owners asked to convert their notes pieces of paper into hard cash which provoked a banking crisis and the government to allow banks to suspend payment (or to be able to refuse to convert banknotes into gold).
Freed from the constraint of maintaining a gold reserve, the banks were able to expand even further their emissions of paper money, creating a credit boom. When the situation seemed to fall in 1816-1817, Congress authorized the creation of a national bank (the Second
Dove finirono tutti questi soldi? Nel mercato immobiliare e ….. nel Mercato Azionario di Wall Street, che nasceva ufficialmente proprio nel 1817, nel bel mezzo della bolla speculativa!
Dopo il boom seguì la recessione, non ci fu nessun New Deal, nessuna Grande Depressione, il governo non fece nulla e nel 1821, liquidati i cattivi investimenti, l’economia ripartì.
Il fallimento di Pole, Thornton & Co - 1825
Ci spostiamo ora in Inghilterra dove durante le guerre napoleoniche, per finanziare le enormi spese del conflitto, era stato abbandonato il gold standard e
« L’espansione creditizia attuata dalla Bank of England fece da apripista in questo nuovo boom inflazionario, aumentando il totale di crediti concessi da 17,5 milioni di August £ 1,823,000,000 to 25.1000000 pounds two years later, a huge increase of 43% or 21.7% annually. Most of monetary and credit boom came to light through investment in highly speculative shares of mining companies in Latin America. [..] By the end of 1824, the international exchange rates became unfavorable gold began to flow abroad within the next year, the British began to demand gold from their banks are making more. [..] This was followed by bank runs and panic. [..] Pole, Thornton & Co. went under, despite the attempt to rescue the last minute attempt by the Bank of England '.
Other inflationary boom, another recession.
The Panic of 1837
Now back to the United States, where the Second
'price inflation began in the early '30s when wholesale prices reached a level of 82 in July 1830, to go up by 20.7% in three years and reach a level of 99 in the fall of 1833. The reason for this growth is simple: the money supply grew by $ 109 million in 1830 to 159 million in 1833, an increase of 45.9% or 15.3% per annum. [..] No doubt, the monetary expansion was led by the Second Bank of the United States which increased its currency and deposits from 29 million to $ 42.1 million, an increase of 45.2 percent. "
In recent years, meanwhile, consumes the fight between President Jackson and the banker Nicholas Biddle, resulting in a progressive emptying of the privileges of the Second Bank until his disappearance a few years later. The prices, which in the meantime had declined after 1834 they returned to climb:
"wholesale prices rose from a level of 84 in April of 1834 to 131 in February 1837, a significant increase of 52% in less three years. "
This was perhaps because the banks, freed from the" brake "of the Second Bank of the United States, began to create credit money beyond all limits, as the story" official "? Rothbard writes that:
"There is no doubt that inflation prices was due to the remarkable monetary inflation of those years. In fact, the total money supply rose by $ 150 million at the beginning of 1833 up to 267 million in early 1837, a spectacular increase of 84% or 21% per year '
But this did not happen because banks created additional credit on existing money: in fact their reserve ratio never got below 16%, which is the level they had maintained during the existence of the Second Bank. What happened is that:
'A partire dal 1833, il totale di denaro contante (moneta metallica) nel paese si incrementò da 31 milioni di dollari a 73 milioni all’inizio del 1837, per una crescita del 141,9% o del 35,5% annuo. Quindi, anche se una crescente sfiducia nei confronti delle banche indusse il pubblico a ritirare parte del denaro dai loro conti, [..] le banche furono comunque in grado di aumentare le loro note ed i loro depositi allo stesso tasso in cui il denaro affluiva nelle loro casse».
.Le cause di questo afflusso di metallo furono «per prima cosa un largo flusso in ingresso di argento dal Messico ed inoltre un netto taglio delle usuali esportazioni di argento in Oriente».
Come spiega Rothbard:
«La vera causa [del flusso di argento negli Stati Uniti] fu l’inflazione monetaria in Messico causata dal regime di Santa Anna, che finanziò il suo deficit coniando monete di rame svilite. Poiché queste ultime erano molto sopravvalutate e le monete d’oro e d’argento, al contrario, erano sottovalutate (a causa del cambio fisso che non era stato cambiato), queste ultime sparirono velocemente via dal Messico fino a sparire. L’argento, ovviamente, e non l’oro, stava finendo negli Stati Uniti durante this period. When the Mexican government was forced in 1837 to change the exchange rate at an appropriate level, the flow of Mexican silver in entering the United States ceased '.
When the collapse came in 1837, William Leggett remarked
Anyone who has observed in an objective manner the course of events of the last three years could have predicted the state of affairs that has occurred now ... would have seen that banks .. tried with all their efforts, emulating each other, to force their own notes in circulation, and showering the earth with their monetary surrogates. He saw they tried in every act of seduction to convince people to accept their supposed aid, so that in this way have gradually aroused a thirst for speculation [..] that has evolved into a fever and the people as prey to an epidemic or a fad of the moment, he embarked on all sorts of desperate adventure. They dug canals business requires no means of transport, opened roads where no traveler wanted to go, built towns where nobody wanted to live "
De Long So, what we learn from the history of speculative bubbles? What is the factor that unites them all?
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