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Contents
Stock Prices
Interest Rates
Commodity Prices
Stock Prices
Interest Rates
Commodity Prices
Interest Rates
Commodity Prices
@Macro_Tourist
January 2014
Part I. American Markets Since Independence
7400 7197
End of 9/1998 10/2002 7470
Cold War 3/2009
1616
2/1966 1/1973 10/1987
995.1 1052
Mergermania: 1087
conglomerates 7/1984
1954-1968
776.9
8/1982
631.2
Post-War 577.6
9/1929 535.8 5/1970
boom 12/1974
381.2 6/1962
Roaring 20s 419.8
New 10/1957 Vietnam War, Oil shocks
Mergermania: Deal
mass-production 5/1946 Stagflation
1916-1929 3/1937 212.5 255.5
194.4 9/1953
Progressive Era 198.7
Mergermania:
monopolies, trusts 11/1929 Korean War
11/1919 161.6
1887-1904 1/1906 119.6 6/1949
103.0
Gilded Age
4/1899
99.0
77.3
Reconstruction 6/1881 3/1938 92.9
4/1942
61.0
7/1869
48.9 63.9 World War II
53.0 8/1921
8/1835 53.2
36.6 12/1852 11/1907 12/1914
32.9 42.2 41.2
37.1
39.2 11/1903 Stagflation 7/1932
11/1873 34.0
9/1824 1/1885
7/1893 28.7
22.5 World War I Great Depression
Era of Good 25.3 8/1896
Feelings 6/1877
19.1 Spanish-
10/1848 American War
8/1806 16.3 17.4
11.8 14.9 1/1829 6/1837
1/1820 Long Depression
12.4
U.S. companies from 1781
Bank War 10/1857 Civil War
Exchanges from 1790 9.7
1/1843 Stagflation
6.9
3/1813 Mexican War
5.6
5.0 10/1807 War of 1812 Hungry Forties
11/1797
4.3
Embargo
12/1789 Stagflation
Act
Major financial crises: 1797 1807 1819 1825 1831 1837 1848 1857 1869 1873 1877 1884 1890 1893 1903 1907 1913 1929 1938 1942 1962 1970 1974 1987 2001 2008
1770 1780 1790 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030
Part I. American Markets Since Independence
Interest Rates
Yield on 10-year U.S. Treasuries, 1791 to date
Stagflation
9/1981
15.84
5/1984
2/1980 13.95
13.65
Revolution:
Continental Congress debt
issued 1776, defaulted 1783-7
Vietnam War,
10/1987
Oil shocks
Federal refunding 1790 10.23
Restructuring of states debts
by Alexander Hamilton 10.12
5/1983
1791 9/1975
8.57 War of 1812 5/1970 8.59
8.22 11/1994
1814 8.03
7.64
Civil War
1/2000
1861 6.83
6.45 6.92
1842 World War I 6.80
6.07 12/1976 8/1986
4/1920
Federal debt 8/1966
5.67 6/2007
6.02 retired 1835, 5.51
until 1842 5.32
1802
1/1960
4.72 5.38
1/1932 3/1971 5.17
1878 Federal Reserve 4.26 10/1993
4/2010
3.97 founded 1913 4.45 4.01
4.25 3/1967 4.16
1824 4.02 1896 6/1953 10/1998 12/2013
1853 3.06 3.11 3.78
3.75 3.03
4/1962
Hungry 3.30 8/1914 12/1942
3.17 3.07
Forties 1875 2.49
3/1928 2.88 6/2003
4/1958
2.29
2.13 2.22 2.08
Long Depression 4/1954 2.04
1889 1899 1.85 4/1946 12/2008
11/1941
Great 1.38
Depression 7/2012
World War II
From 1861 to 1918: yields depressed by national Fed buying of Fed yield targeting Global Financial Crisis,
bank and then Treasury buying of bonds bonds 1932/33 sub-2.5% from 4/1942 Quantitative Easing
1770 1780 1790 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030
Part I. American Markets Since Independence
Commodity Prices
Continuous Commodity Index (extended), 1770 to date
EM demand
500.0
6/2013
Stagflation
11/1980
337.6
Oil shock
6/1988 322.5
4/1996 12/2008
Vietnam War, 272.2
263.8
oil shock 2/1974
237.8
196.2
184.7 7/1986 182.7 182.8
8/1977 7/1999 10/2001
2/1951
Revolution: 138.3 Recession
Inflation, collapse of
Continental currency
Civil War 7/1920
111.2
1779 8/1864
102.2 100.7
War of 1812
3/1937
60.3
1837 3/1857
52.0 6/1882
51.5 4/1910
49.7
47.9 54.4
52.0 6/1921
1808 Mexican Spanish-
War American War
46.3
1821 44.5
8/1939
40.7 43.3
38.4 1834 38.0 10/1914
1792 37.1
6/1879 35.4
California 7/1861 Gold inflows
33.9 33.9 gold from 6/1886
1775 1843 32.4
Depression 1848 2/1933
29.5
Hungry Forties 6/1897
Great Depression
Long Depression
1770 1780 1790 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030
Part I. American Markets Since Independence
Stagflation 3/2008
1033.9 1179.0
1/1980 6/2013
873.0
681.0
11/1987 10/2008
502.3
2/1996
417.5
325.8
3/1993
281.2
2/1985 252.5 255.0
2/1975 8/1999 2/2001
186.2
102.8
8/1976
Civil War
Breakdown of
Bretton Woods
1864
46.36 Breakdown of the 5/1969
gold standard 43.36
Revolution: Collapse of
Continental currency 1935
34.84
1770 1780 1790 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030
Part I. American Markets Since Independence
77.28
Gulf War I 6/2012
Iranian
Revolution 10/1990
41.15 9/2000
3/1981 37.80
34.59
32.40
12/2008
16.70
Yom Kippur War, 11/2001
Civil War
Arab oil embargo
1864 1/1975
8.06 7.61 10.35
9.75
12/1998
4/1986
OPEC OAPEC
formed formed
1960 1967
World War II
1895
1.36
1937
1.18
1770 1780 1790 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030
Part I. American Markets Since Independence
2/1985
164.72
Reagan/
Volcker
Plaza
Accord
1956 9/1969
123.82 7/2001
122.2
121.02
6/1976 6/1989
107.60 106.56
Vietnam War, 2/1994
oil shock 97.10
Breakdown of
Bretton Woods 3/2009
89.62
5/2013
1950 90.54 84.50
82.1 7/1973
85.33
Breakdown of the 82.07 12/1987 80.05
gold standard 81.1
War of 10/1978
1954 78.19 4/1995
1812
9/1992
Revolution: Collapse of 1932 World 72.70
Continental currency 1812 65.5 War II 70.70 5/2011
1920
63.5 3/2008
62.8
1940
60.0
U.S. Dollar introduced: Global Financial Crisis,
Coinage Act 1792 World
War I Quantitative Easing
57.0
1948
1861 1881
48.2 47.6
48.4
1794 46.6 47.2
1914 1930 45.5
44.0 1934
1816
Great Depression
Bimetallic Standard Greenbacks Gold Standard Bretton Woods Free floating exchange rates
$ linked to gold leaves 1914 $ devalued 1933 Bretton Woods 1944 Carter Dollar Rescue Plan 11/78
(end to bimetallic system): rejoins 1925 European fx convertibility 1955-58 Plaza Accord 9/1985
Coinage Act 1873 leaves 1931 Bretton Woods collapse 1968-71 Louvre Accord 2/1987
23.0
Gold Standard Act 1900 Currencies floated 5/1971
1864
Gold window closed 8/1971
Civil War
1770 1780 1790 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030
Part II. Western Markets Since the Middle Ages
Stock Prices
Composite index: Genoa 1509-1602, Holland 1602-1693, England 1693-1789, U.S. 1789 to date 2013
16588
6470
2009
Global
Financial
Crisis
1965
995.1
1929
381.2 577.6
1974
Stagflation
1881
61.0
1835
36.6
South Sea 41.2
Bubble 28.7 1932
1896 Wall St Crash,
1720
1806 Great Depression
12.5 Long
11.8
Dutch Glorious Depression
Independence Revolution 12.4
1767 1857
1649 1688 9.7
4.90 5.5 1843
5.18 Civil War
Hungry
1612 4.05 Forties
2.31 1726 3.21 3.07
2.32 1761 1783
2.23
1672 1696
Stagflation Depression
Wars Vs.
Disaster Seven
Louis XIV American
0.98 year Years
Revolution
1618 War
0.63 War Vs
1509 1597 Spain
0.30
0.19
1555
Financial crisis
Dutch East India Co. (VOC) England: East India Co. U.S. shares traded from
From 12th century: evolution of Bank of St George, bankers to Spanish
shares traded from 1602; shares traded from 1688; 1781, listed on New York
joint-stock companies from Crown, founded 1407, shares traded in
establishment of Amsterdam establishment of London Stock Exchange from 1790
merchants guilds: Genoa from 1509: perpetual annuities
issued by Republic of Genoa, paying Stock Exchange Stock Exchange
Partnerships in maritime trading
companies in Italy from c.1150, dividends varying with profits of the bank
1050 1100 1150 1200 1250 1300 1350 1400 1450 1500 1550 1600 1650 1700 1750 1800 1850 1900 1950 2000 2050
Part II. Western Markets Since the Middle Ages
Interest Rates
Yields on long-term sovereign debt: Venice 1285-1509, Holland 1550-1693, England 1694-1797, U.S. 1798 to date
Defeat to
Turks
Venice
10th & 11th centuries:
1467
Rise of Italian city-states;
17.39 Stagflation
Venetian independence
from Constantinople;
control of Mediterranean U.S.
trade by Venice, Genoa, 1981
Pisa, Florence 15.84
Series of wars with Turks:
decline of Venetian power
War of Chioggia
From 12th century: with Genoa
War of the League
evolution of bond markets of Cambrai
Venice
from census:
1385
13.16 Venice
Census (perpetual annuity) Refunding of English
1509
issues by cities in Italy and debt by Bank of
12.50
the Netherlands England 1694
1050 1100 1150 1200 1250 1300 1350 1400 1450 1500 1550 1600 1650 1700 1750 1800 1850 1900 1950 2000 2050
Part II. Western Markets Since the Middle Ages
Commodity Prices
Composite index: England 1165-1792, U.S. 1792 to date 2011
691.1
Yearly high-low bars, log scale
1980
337.6
1205 1274
Barons 6.0
6.0 Silver & gold from the
Revolt
New World to Europe
6.2 6.1
5.8 1462 1509
1394
4.8 Silver mining boom in
4.5 1338 central Europe, gold
4.3 Silver mining crises,
1287 from West Africa
1235 gold outflows to the
Collapse of wool trade,
East
Edward III default,
banking collapse,
Silver famine: drain HY War start
Norman conquest Gold from
of England; First Crusades of specie via Venice
Crusade to Middle East
1050 1100 1150 1200 1250 1300 1350 1400 1450 1500 1550 1600 1650 1700 1750 1800 1850 1900 1950 2000 2050
Part II. Western Markets Since the Middle Ages
1980
873
Stagflation
253
1999
1050 1100 1150 1200 1250 1300 1350 1400 1450 1500 1550 1600 1650 1700 1750 1800 1850 1900 1950 2000 2050
Part III. Markets Since the Beginning of Civilisation
Interest Rates
Lending rates in Mesopotamia 3000 BC-600 BC, in Greece and Rome 600 BC-300 AD; Yields on Western government bonds 1150 to date
Ancient Sumer:
Custom of 1 shekel per mina per month = 20%
Rates of 25% also documented Commercial Revolution of the Middle Ages:
(see also India c.2400 BC: Laws of Manu, 24% rate) easing of prohibitions on usury, rise of
banking and state finance in Italy and the
Netherlands; evolution of bond markets from
Ur: financial centre of Sumer until
census annuities
crash of 1788 BC caused by
cancellation of debts under Rim-Sin Italian cities Venice
c.1150 1430s
Babylon: Code of Hammurabi, 1772 BC, Dark Ages in the West: 20% (?) 20.00
Codified earlier Sumerian custom of 20%. Anti-usury laws,
Average rates of 10-25% recorded Adoption of Near e.g. Capitularies of
through Old Babylonian, Assyrian and Eastern financial Charlemagne 814 AD
Neo-Babylonian iterations, until Persian practices by Greek
conquest 539 BC, then rates of 40+% city states
5th century Greece: 3rd/4th century Rome:
spread of coined money and inflation, fiscal crisis
Athens U.S.
credit; freeing of hoarded 1980s
600 BC capital for productive loans Rome
Origins of interest rates: 15.84
16% (after Persian Wars, silver 300 AD
Natural multiplying of borrowed livestock via reproduction: Debt crisis in Archaic Greece: discoveries at Laurion) 15+% (?)
hence words for interest in ancient languages: Sumerian usurious loans, payment in
mash = calf, Greek tokos = calf, Latin pecus = flock, kind, debt servitude; until Sulla 88 BC
Egyptian ms = give birth. Solons reforms, 594 BC Limit 100th /mth = 12%
Rome 6.25
Roman expansion:
100 AD 1490s
inflows of silver &
5% Venice
gold, falling rates
4.88
1340s
4% Venice
1 AD
Rome 3.00
1670s 2.81
Expansion of coinage under Holland 1730s
Julius Caesar and Augustus. England 1.85
Reduction under Tiberius: 1940s 1.38
credit crisis in 33 AD U.S. 2010s
U.S.
-3000 -2800 -2600 -2400 -2200 -2000 -1800 -1600 -1400 -1200 -1000 -800 -600 -400 -200 1 200 400 600 800 1000 1200 1400 1600 1800 2000 2200
Part III. Markets Since the Beginning of Civilisation
Commodity Prices
Composite indices: Babylon 1840 BC-1620 BC, Greece 500 BC-250 BC, Rome 250 BC-300 AD, Iberia 920-1040, England 1170-1790, U.S. 1790 to date 2010s
World
Wars
Napoleonic
wars
1810s
General crisis of
the 17th century
De-linking
1640s of currency
and gold
1930s
Crisis of the Late 1720s
Middle Ages
Industrial Revolution:
Acceleration of inflation after Diocletian's 1310s Fossil Fuel Age
Prices Edict of 301 and Constantines
recoinage 324, until Julians reforms, 360.
Rapid expansion of copper coinage for military 1200s
pay and treasury buying of gold; but price
Viking/Norman 1500s
deflation vs gold solidus. Copper/silver
invasions 1330s
currency abandoned after Theodosius, 395. Silver & gold
New silver coinages under Gothic successors, from New World
e.g. Odoacer 480; reformed by Justinian, 550s 1020s
Age of Discovery:
European expansion
Crises of the 3rd & 4th 1160s
centuries: wars Vs.
Persians, Goths Silver mining
boom, crusades
Environmental decline 300 AD Migration period:
of grain-producing Roman collapse of western
Roman empire Commercial Revolution
colonies in North Africa 930s
of the Middle Ages
Expansion
Roman tri-metallic system: bronze currency Dark Ages
of coinage
from 3rd century BC, silver from 2nd Punic
War, gold introduced by Caesar. Reductions
in silver content of denarius: to 90% by Nero, Frankish and Saxon gold coinage
85% by Trajan, 75% by Marcus Aurelius, from c.550; evolved into silver
50% by Severus, 5% by Aurelian, 0.02% at currency via debasement by c.680.
end of 3rd century, i.e. silver-plated copper New silver currencies under
coin. Acceleration of inflation after Aurelius Charlemagne 768 and Offa 785.
and again after Aurelian 220 AD Growth of trade and markets
Civil wars
-3000 -2800 -2600 -2400 -2200 -2000 -1800 -1600 -1400 -1200 -1000 -800 -600 -400 -200 1 200 400 600 800 1000 1200 1400 1600 1800 2000 2200