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Some argue that free banking without central banks was a very stable period. https://mises.org/library/free-banking-theory-history-and-laissez-faire-model-0 htt

by acd 10y ago

Some argue that free banking without central banks was a very stable period. https://mises.org/library/free-banking-theory-history-and-laissez-faire-model-0 https://mises.org/library/free-banking-theory-history-and-la... A question will arise to who owns what if there ever is a derivative bubble? Will we get digital currency decentralised made by hackers then? Here is a visual representation of different types of money and markets. http://money.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization/ http://money.visualcapitalist.com/all-of-the-worlds-money-an...

neffy 10y ago
Not those who lived through it I suspect. http://www.jstor.org/stable/2338493?seq=1#page_scan_tab_contents http://www.jstor.org/stable/2338493?seq=1#page_scan_tab_cont...
runeks 10y ago
It is a fact that both interest rates and the price level were exceptionally stable during the international gold standard, which lasted roughly from 1870 to 1900. This 30 year period showed a stability in both interest rates and the price level that has never been seen since. Now, whether this was due to the gold standard, or whether the reason was one (or more) of the other trillions of factors that are different between now and then, we cannot say.
- forgetsusername 10y ago
  >It is a fact that both interest rates and the price level were exceptionally stable during the international gold standard, which lasted roughly from 1870 to 1900. A fact? Here's a sample of inflation from that period: 1878: -15% 1879: -10% 1880: 20% 1881: -5% 1882: 8% 1883: -2% And on and on...what exactly was "stable" about that period? Compare that to, say, the 30 years from 1986 to today. http://www.multpl.com/inflation/table http://www.multpl.com/inflation/table
  - runeks 10y ago
    I stand corrected. I included inflation when I shouldn't have. My claim is true for interest rates, however. Here's one chart: http://www.businessinsider.com/us-treasury-yields-at-historic-lows-2014-11?r=US&IR=T&IR=T http://www.businessinsider.com/us-treasury-yields-at-histori... We have a 100-year long period here, starting around 1820, where interest rates basically moved within a band of 3-6%. The 100 years following that are a very different story. Here we see the interest rate move from 2% to 15% and back to 2% in 75 years, from 1945 to now.
    - dragonwriter 10y ago
      Well, yes, when interest rates are manipulated to control inflation, the latter becomes more stable and the latter becomes less stable. This is not surprising, its obvious. I'm kind of baffled by the implied premise that stable interest rates are preferable to stable inflation, though.
      - runeks 10y ago
        > I'm kind of baffled by the implied premise that stable > interest rates are preferable to stable inflation, though. I didn't mean to imply that. I think the two are inextricably linked. With regards to achieving stable inflation, to me it just looks like we've flattened out the spikes, not gotten rid of them [1]. And, mind you, the two spikes at ~1865 and ~1914 were caused by wars. We can't exactly say we had either a world war or a civil war from 1965 to 1985. [1] http://www.economics-charts.com/cpi/cpi-1800-2005.html http://www.economics-charts.com/cpi/cpi-1800-2005.html
ZenoArrow 10y ago
> "Some argue that free banking without central banks was a very stable period. https://mises.org/library/free-banking-theory-history-and-laissez-faire-model-0" https://mises.org/library/free-banking-theory-history-and-la... The Mises Institute isn't an impartial source when it comes to the economy, they have a clear agenda, pushing for free market economics. If you've read the book, I'd be interested to know what it makes of the Panic of 1907: https://en.wikipedia.org/wiki/Panic_of_1907 https://en.wikipedia.org/wiki/Panic_of_1907

by acd 10y ago

neffy 10y ago

Not those who lived through it I suspect. http://www.jstor.org/stable/2338493?seq=1#page_scan_tab_contents http://www.jstor.org/stable/2338493?seq=1#page_scan_tab_cont...

runeks 10y ago

It is a fact that both interest rates and the price level were exceptionally stable during the international gold standard, which lasted roughly from 1870 to 1900. This 30 year period showed a stability in both interest rates and the price level that has never been seen since. Now, whether this was due to the gold standard, or whether the reason was one (or more) of the other trillions of factors that are different between now and then, we cannot say.

forgetsusername 10y ago
>It is a fact that both interest rates and the price level were exceptionally stable during the international gold standard, which lasted roughly from 1870 to 1900. A fact? Here's a sample of inflation from that period: 1878: -15% 1879: -10% 1880: 20% 1881: -5% 1882: 8% 1883: -2% And on and on...what exactly was "stable" about that period? Compare that to, say, the 30 years from 1986 to today. http://www.multpl.com/inflation/table http://www.multpl.com/inflation/table
- runeks 10y ago
  I stand corrected. I included inflation when I shouldn't have. My claim is true for interest rates, however. Here's one chart: http://www.businessinsider.com/us-treasury-yields-at-historic-lows-2014-11?r=US&IR=T&IR=T http://www.businessinsider.com/us-treasury-yields-at-histori... We have a 100-year long period here, starting around 1820, where interest rates basically moved within a band of 3-6%. The 100 years following that are a very different story. Here we see the interest rate move from 2% to 15% and back to 2% in 75 years, from 1945 to now.
  - dragonwriter 10y ago
    Well, yes, when interest rates are manipulated to control inflation, the latter becomes more stable and the latter becomes less stable. This is not surprising, its obvious. I'm kind of baffled by the implied premise that stable interest rates are preferable to stable inflation, though.
    - runeks 10y ago
      > I'm kind of baffled by the implied premise that stable > interest rates are preferable to stable inflation, though. I didn't mean to imply that. I think the two are inextricably linked. With regards to achieving stable inflation, to me it just looks like we've flattened out the spikes, not gotten rid of them [1]. And, mind you, the two spikes at ~1865 and ~1914 were caused by wars. We can't exactly say we had either a world war or a civil war from 1965 to 1985. [1] http://www.economics-charts.com/cpi/cpi-1800-2005.html http://www.economics-charts.com/cpi/cpi-1800-2005.html

ZenoArrow 10y ago

> "Some argue that free banking without central banks was a very stable period. https://mises.org/library/free-banking-theory-history-and-laissez-faire-model-0" https://mises.org/library/free-banking-theory-history-and-la... The Mises Institute isn't an impartial source when it comes to the economy, they have a clear agenda, pushing for free market economics. If you've read the book, I'd be interested to know what it makes of the Panic of 1907: https://en.wikipedia.org/wiki/Panic_of_1907 https://en.wikipedia.org/wiki/Panic_of_1907