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By the early 18th century, Japan had developed full-on derivatives markets (not just futures but CDS-style bets) for its rice crops. I like the "portability/st
by rtpg 11y ago
By the early 18th century, Japan had developed full-on derivatives markets (not just futures but CDS-style bets) for its rice crops.
I like the "portability/storability" hypothesis this article is proposing for societal development. If only because it becomes a proxy for financial systems. And you don't have to "convince" people that your money is useful: You can always eat it!
- paganel 11y ago> Japan had developed full-on derivatives markets (not just futures but CDS-style bets) for its rice crops. Any English-written resources for that? It sounds really interesting.
- nrgg 11y agoCheck out Wikipedia on the Dōjima Rice Exchange and the references therein.
- rtpg 11y agoWas trying to find the section in a textbook I had read about this, but this article[0] on the Dojima Market goes into a good amount of detail about this, and is a fun read. [0]: http://disciplinas.stoa.usp.br/pluginfile.php/69204/mod_resource/content/4/CHY%20GED_LS-%23795938-v1-Dojima_Rice_Market_Case.pdf http://disciplinas.stoa.usp.br/pluginfile.php/69204/mod_reso...
- gopz 11y ago> Recognizing the potential profit opportunity, the Nagoya merchant bought the future harvest of his region by paying approximately 10% to the farmers and writing drafts for the rest of the negotiated amount. These drafts were not to be presented for payment before the rice was actually sold. When the harvest came in, he stored it and after three or four months sold it with a profit of 30- 40%, as prices had climbed in the meantime.2 It is interesting that this sort of financial instrument would have been totally impossible with water logged veggies.