Elaine Meinel Supkis
As England's Prime Minister bows to the Chinese Dragon and as the US scuttles over to the Dragon Throne to reassure the Bankers who control our fates, it is time to revisit a lot of history. I am very interested in some 140 year old news paper articles about the Great Panic of 1873. This heralded the Long Depression which saw prices in the manufacturing nations fall 50% and collapse in India and China who saw famine and millions of dead. The Gilded Age began with a suppression of worker's wages and cutthroat banking which the US did not imitate, we had a Treasury back then. Now we have a clone of the British banking system which is the Federal Reserves who reserve nothing, they just make bubbles like the Bank of England.
Chinese President Hu Jintao called for more Sino-British exchanges and cooperation when meeting with visiting British Prime Minister Gordon Brown here on Friday.
Hu said both China and Britain shoulder important responsibilities in maintaining world peace and promoting mutual development. China and Britain need to enhance cooperation taking into consideration international political and economic pattern in the 21st century.
"The Sino-British exchanges and cooperation conform to the trend of globalization and the self-development of the two countries, and China has always been handling Sino-British relations from a strategic and global perspective," Hu said.
"Chinese side appreciated the British side's adherence to the one-China policy, clear opposition to the Taiwan authorities' planned "referendum" on UN membership, and support for China's peaceful reunification," Hu said.
At first, the perambulations of Hu and Wen were them seeking to build a new Chinese diplomatic consensus. These early probes were extremely successful with Putin who was growing very sour about the dismissive treatment he was getting from both Europe and the US. The final straw was the overt courting of Eastern Europe despite earlier promises to not expand NATO all the way to Russia's borders. Then, the sudden desire to place missile systems right on Russia's nearest frontiers motivated Putin to reach out to the Chinese and form a growing alliance.
We are in a New Zeitgeist. That is German for 'spirit of the times'. The Zeitgeist that has begun ever since Nixon ran off to China to form an alliance so he could pull out of Vietnam is 'The Chinese Empire Strikes Back.' At first, China was stunned by all the madness of the dying Mao and his arrogant wife, Madame Mao. Together, they worked hard to utterly destroy anything that signified the ancient arts, thoughts and methods of one of the world's oldest empires. They burned or wrecked nearly everything and reduced the people to atomized, dispirited entities with no hopes or dreams, only a desire to run with the mob being driven off the cliff by these two mad creatures.
Then mercifully, Mao died and his deranged wife was put in prison as she richly deserved. Since then, the pragmatic side of the Chinese people has sprung to life, I watched it very closely, indeed, in the middle of it. Watching the Chinese officials living with me move swiftly from mindless Maoism to devout capitalists was amazing for they did this in a matter of months, not years. Watching the Chinese empire slowly come back to life is a historic experience. Thanks to Mao's destructive actions, the surviving Chinese are quite cynical and thus, able to look unemotionally upon the march of history and figure out how to play it like a violin, composing their own music, not imitating anyone, but finding their own voice.
Here we are! The British Empire who were the ones to decisively shatter the ancient Chinese empire in the early 1800's, going hat in hand to China to beg for favors! Deep inside the ritual statements is this gem:
"I believe as long as both sides look into the future and make unremitting efforts, China and Britain will certainly be able to transcend the differences in historical traditions, social systems, and economic development levels, and forge a comprehensive strategic partnership to benefit Chinese and British people and people from all over the world," Hu said
I used to have about 200 readers a day in China until I posted a thorough analysis of the elections in Taiwan. Now, my site is hidden from the Chinese who read this news and I am very sorry about this but I am not surprised. I talked about the 50 year plan which is top secret. It pains me to watch this plan that was hatched around 1985. I observed its genesis very closely. The Chinese leadership holds these plans very close to their chests and they are irritated that I know these plans. But there it is: the cat is out of the bag.
I can sense the rising scorn, suppressed glee and focused hatred in Hu's inner mind as he carefully spoke those words. He put England in its place. He is aware of the games the English play and how they manipulate events using the Bank of England. He can see how they have hijacked the US military machine to keep the last bits of their empire under their thumbs. He can see how they retook both Iraq and Afghanistan without spending one tenth of what the US has wasted there. He also knows their weaknesses. For the Chinese have studied the Brits very closely ever since 1845. This is survival for them.
The fact that England had to stand there and make promises they don't intend to keep, yet were forced to say them in public is important to China. This last month, China has been renewing vows with all the brides of the Dragon. All the great empires are being SUMMONED TO CHINA to make their wedding vows.
China stands alone of all the industrialized nations in moving actively to raise interest rates, force upwards the reserve ratios of banks, they hold the world's biggest, by far and away, the biggest FOREX reserves and next to the Arabs, the biggest Sovereign Wealth Funds.
After more than a century on the throne, South Africa has been deposed as the world's biggest producer of gold, with its estimated 2007 output, of 272 t, falling just short of the 276 t of the yellow metal produced by the new number one, China
While Chinese gold production increased by an estimated 12% year-on-year, South African mines produced 8% less gold than in 2006, according to precious metals consultancy GFMS's 'Gold Survey 2007 - Update 2', which was launched in Toronto on Thursday.
China is producing gold! And the Dragon isn't alone in this enterprise! Last summer, right before the Storm Broke the Banks, Europe, the US and England worked very hard to convince China that gold was worthless. This sounded so Maoist, I laughed at the con game back then and predicted, the Chinese would ignore this just like they ignored the European and British efforts to convince them, Sovereign Wealth Funds were stupid and FOREX reserves bad for the wallet and the economy. Indeed, there was a full-press attack on all significant economic systems and machinery starting last January, a year ago.
The Chinese were always very polite and often, rather sardonically suspicious, indeed, even openly obnoxiously abrasive about these efforts to deceive them. All this was ignored. When I was one of the few humans to cover the last major speech of the head of the Bank of China, I nearly fell out of my chair, laughing while reading his remarks concerning the alternative banking system the US and England are trying to set up. He clings to the older systems because he is a historian of world economic history and even helped us by suggesting we all read the same books I told the Chinese, would be useful in dealing with the West.
The US and UK are both falling into an economic pit we have fallen into not once or twice but several times. England has done this even more times, indeed, over the last three centuries, we have slavishly copied all the mistakes of the English economic system and now are at the end of the game: we can't conquer endless, helpless third world people whenever we fall into a financial pit. Indeed, these conquests are increasingly dangerous since the Chinese will soon prevent us from activating this solution to our endless economic problems.
Dai said China's development is an opportunity to the United States.
Negroponte said the United States welcomes China's development and will devotes itself to developing a constructive and long-term relationship of comprehensive cooperation with China.
The two sides agreed to continue to implement the consensus reached by the two heads of state and to properly handle sensitive issues in bilateral relations.
Dai stressed China's firm opposition to Taiwan authorities' splitting activities of "Taiwan independence", including the "UN membership referendum", saying it is of great significance to safeguard peace and stability across the Taiwan Straits and the overall situation of China-U.S. relations.
Negroponte said the United States understands the sensitive nature of Taiwan issue and China's concern in this regard, adding the U.S. side insists on the one-China policy and opposes "Taiwan independence" activities including the "UN membership referendum".
Neroponte, [deliberate misspelling] kowtowed to the Dragon. The fact that he had to do this and was not allowed to weasel his words so he could say something meaningless, is proof that our economic problems are now so great, we can't defy the Dragon on any diplomatic matters. This doesn't mean the US has surrendered, we are crossing our fingers and hoping our military expenditures which are nearly as great as our trade deficit, will save us and make us rulers of the planet. I will note here that our military spends the same level as our national trade debts and on top of this, we have a government budget deficit which has run up our debts to as high as the English debts. How this US/UK empire expects to run the planet while $20 trillion in debt, baffles me.
Taiwan is a great prize for China and China has concentrated on reeling in Taiwan and I expect they will succeed since money talks and more money yells. And China has a lot of money for hollering.
This is the highest level since records began.
From January 4 to 11, the reserves increased by $1.1 billion, or 0.2 percent, the Central Bank reported.
As a result, Russia has slightly reduced its gap from China and Japan, which have the largest gold and foreign currency reserves in the world. Chinaâs reserves top $1.5 trillion, up 43 percent last year alone, due to foreign investment and strong export revenues. Japan has over $973 billion.
The government had expected to bring Russiaâs gold and foreign currency reserves to $470 billion by the end of 2007, but they fell slightly short of the target. As of January 1, 2007, the reserves stood at $303.7 billion.
Europe and the US have given up, trying to con Putin. He is imitating the new Masters of the Planet. So of course, Russia is accumulating oil reserves, accumulating gold reserves and building up their FOREX reserves. Not as swiftly as the Chinese but then, China hasn't been looted in the last 50 years while Russia was looted in the last 20 years! Russia has again, established their missile defense systems, has been forging ahead in research in weapons systems and in general, has laid out the blueprint for how to deal with WWIII if the US goes crazy when we go bankrupt. He knows of the plans to bankrupt the US. I'm pretty certain, Hu has explained the process. Indeed, this KGB officer knows very well, how Russia fell apart and figures, the US is turning itself in to the Soviet Union so it is a matter of patience. Russia's victory will come.
Today, I have seen 1873 mentioned several times so I decided, this particular panic/depression should get an extended look to see if there are any parallels. Unlike many other people, I happen to think our ancestors were quite smart. They also had basically the same economic systems we have today. In the case of banking, England has brought all other nations under the system they created from 1650-1914. The United States, when it was born, refused to imitate the English banking system because our Founding Fathers didn't want a government that could wage war with only the support of bankers. They feared this greatly and thought, if they could make it harder to fund wars, the US won't go bankrupt invading Iraq. Or anywhere else.
This virtue fell nearly instantly. Napoleon needed money for his wars and in true form of all dictators and kings, this irritable emperor 'sold' lands occupied by natives who had no idea who this man was, they never saw a single Frenchman in their lives! But he got the money from the young USA and this was our first mortgage in the name of the People.
When France revoked the right of deposit for U.S. merchants in 1802, Jefferson sent JAMES MONROE to Paris to help ROBERT R. LIVINGSTON convince the French government to complete the sale. These statesmen warned that the United States would ally itself with England against France if a plan were not devised that settled this issue.
NapolÃ©on initially resisted U.S. offers, but changed his mind in 1803. He knew that war with England was imminent, and realized that if France were tied down with a European war, the United States might annex the Louisiana Territory. He also took seriously the threat of a U.S.-English alliance. Therefore, in April 1803 he instructed his foreign minister, Charles-Maurice de Talleyrand-PÃ©rigord, to negotiate with Monroe and Livingston for the United States' purchase of the entire Louisiana Territory. Acting on their own, the U.S. negotiators agreed to the price of $15 million, with $12 million paid to France and $3 million paid to U.S. citizens who had outstanding claims against France. The purchase agreement, dated April 30, was signed May 2 and reached Washington, D.C., in July.
President Jefferson endorsed the purchase but believed that the Constitution did not provide the national government with the authority to make land acquisitions. He pondered whether a constitutional amendment might be needed to legalize the purchase. After consultations Jefferson concluded that the president's authority to make treaties could be used to justify the agreement. Therefore, the Louisiana Purchase was designated a treaty and submitted to the Senate for ratification. The Senate ratified the treaty October 20, 1803, and the United States took possession of the territory December 20, 1803.
The U.S. government borrowed money from English and Dutch banks to pay for the acquisition. Interest payments for the fifteen-year loans brought the total price to over $27 million.
OK: $27 million-$15 million=$12 million. Napoleon got $12 million for his wars with England and the English and Dutch bankers got $12 million. Gads. So who won?
The bankers. In England! They raised the money for Napoleon to attack England! How's that for neat banking? And who were they? Henry Hope, born in America but went off to Amsterdam to make money. And Barings of England.
Barings had a long and storied history. In 1802, it helped finance the Louisiana Purchase, despite the fact that Britain was at war with France, and the sale had the effect of financing Napoleon's war effort. Technically the United States did not purchase Louisiana from Napoleon. Louisiana was purchased from the Baring brothers and Hope & Co.. The payment for the purchase was made in US bonds, which Napoleon sold to Barings at a discount of 87 1/2 per each $100. As a result, Napoleon received only $8,831,250 in cash for Louisiana. Alexander Baring, working for Hope & Co., conferred with the French Director of the Public Treasury FranÃ§ois BarbÃ©-Marbois in Paris and then went to the United States to pick up the bonds before taking them to France.
So Napoleon had to sell these bonds to the British bankers at a discount? HAHAHA. So Barings got on top of the $12 million they split with Hope's bank plus an extra $3,168,750! So the bankers got a total of nearly $15 million. This is more than 50% of the purchase price! And what was the result?
First, Napoleon used the money to ride off to Belgium and Holland where he tried to get the money back the old fashioned way: by shooting up the bankers. He also tried to kill the British army and would have gone to Britain, too, to collect his money back! Indeed, the British, after taking their big cuts, turned around and burned the White House. Isn't that funny? But we had the fiction of 'owning' vast lands which were not any European's possessions except in their own map maker's wild gaze. Ultimately, all this funny money business was based on the theft of lands from the uninformed natives of the New World who were the ultimate victims of all these little scams.
Indeed, history is all about how people making deals then pick up a navy and a few soldiers and run off to the very same people they made a deal with and steal everything. For example, before the Napoleonic wars, money was flowing from Britain to China and India for the trade goods there such as tea, silks, fine wares, etc. To reverse this trade, after all, trade deficits are BAD, right? To reverse this, the British went into the weaker parts of India and conquered that and then used the opium crops to smuggle into China. When China protested and demanded this stop, the British then unsheathed the sword and simply attacked China with all their fury.
This history isn't unknown. To understand trade and banking, one must understand warfare for all are intertwined most intimately. This is why I keep saying, there is no such thing as a 'safe port' when empires must get violent in order to deal with intractable trade/banking issues. For this is why we have standing armies! This is why we invest in navies! There is another logic to all this: when the looting makes money for the empire, the empire grows. If the looting fails or costs much more than the returns, the empire fails. Or if the empire pays more and more for goods and forgets to go out and fetch the money back at gun point or finds some lands occupied by Indians in the New World or in India, if they can't find these and steal them, the empire is in deep trouble.
The logic of lending is such that it doesn't merely build commerce or infrastructure, it builds wars. And the biggest spenders who ask the fewest questions are governments off on looting expeditions. The US, for example, is on such an expedition. Instead of doing it on the cheap, we are doing it the most expensive way possible. We are ringing up gigantic debts with the private bankers to pay for all this! This is what the 'budget deficit' is all about: not welfare or school money or paying for retirement. The creatures who lend money for wars all want us to think we are spending too much on retirement or teaching our children or protecting babies. But NEVER do they EVER mention cutting the funds flowing into wars that are all about stealing stuff from foreigners who don't have nuclear bombs!
Indeed, right now, Social Security pays for these wars. The money is being surrendered to the international bankers and to the Chinese and Arabs who buy our government debt. Social Security is one of the very, very few systems taking in more than it spends. The military spends and brings in very little. Since it is costing us many lives as well as several billion a week to occupy Iraq, all these billions are in the form of IOUs to bankers in foreign lands. And this is a gusher of money flowing out of the US along with the trade deficit which, together, equals about a trillion a year. We have to go on some military adventure where the bankers are to get this money back. Since this is much of the world, it means WWIII, doesn't it?
But history says, this is our only way out. Let's go to the Panic of 1873. As usual, there are disputes as to why this happened. I would lay this at the feet of the Zeitgeist of that time. For it was a very interesting time. The US just finished the Civil War and was flexing its manufacturing and military muscle. As usual, war strengthens the victors who used this to consolidate power not only over the south but all of the Western Hemisphere. Right on the heels of this, attempts at creating a passage through Central America was launched. The Banana Republic was born. The US decided to destroy the last of the Spanish Empire.
Just before this great panic that ushered in the longest 'depression' ever, Germany and France had a war and France had to pay Germany reparations, setting the stage for WWI and WWII. This changed the flow of banking funds in Europe to a startling degree. France had to pay 5 billion gold francs to Germany which paid for the rising social state designed by Bismark. First we will look at British history of this critical time period of 1870-1873:
In effect, repeal of Corn Laws protectionism [in 1846] opened the floodgates throughout the British Empire to a "cheap labor policy." The only ones to benefit, following an initial surge of cheap food prices in England, were the giant international London trading houses, and the merchant banks which financed them. The class separations of British society were aggravated by a growing separation of a tiny number of very wealthy from the growing masses of very poor, as a lawful consequence of "free trade."1
E. Peshine Smith, an American economist and fierce opponent of British free trade, writing at the time, summarized the effect of the British Empire's free trade hegemony over the world economy of the 1850's: "Such has been the policy which still controls the legislation of Great Britain. It has, in practice, regarded the nation collectively as a gigantic trader, with the rest of the world, possessing a great stock of goods, not for use, but for sale, endeavouring to produce them cheaply, so that it might undersell rival shopkeepers; and looking upon the wages paid to its own people as so much lost to the profits of the establishment."
Peshine Smith contrasted this "nation as giant shopkeeper" doctrine of the Britain of Adam Smith and company to the growing national economic thinking emerging on the Continent of Europe in the 1850's, especially under the German Zollverein and other national economic policies of Friedrich List.
The Zollverein was Bismark's baby and it was paid for via war with France. Germany had been on the losing end of the deal ever since the 30 Year's War and now had to play catch-up and simply changing banking systems, uniting the country and CUTTING TOLLS...[I weep here, this is so stupid!]---Germany needed some financing to pay for rebuilding the universities and reviving industry. The general rule of thumb is to go to the nearest bank and hold it up. Which they did. This set into motion a global collapse, I believe. Just as any major bank robbery can destabilize banking systems. Only an army can run off with 5 billion gold francs.
The dominant faction in British economic policy, increasingly after the 1846 Corn Laws repeal, was not industry or agriculture, but finance and international trade. In order to ensure the supremacy of British international banking, those bankers were willing to sacrifice domestic industry and investment, much as happened in the United States after the assassination of President John F. Kennedy in the 1960's.
But the consequences of this new Bank of England interest rate policy for British industry came home with a vengeance when the Great Depression hit Britain in 1873, and lasted until 1896.
Beginning with a financial crisis in the English banking world, as the pyramid of foreign lending for railway construction to the Americas, North and South, collapsed, the British Empire entered what was then called The Great Depression. Reflecting the rising unemployment and industrial bankruptcies of that depression, British prices collapsed by almost 50% in nominal terms, in an unbroken fall from 1873 to 1896. Unemployment became widespread.
A 23 year depression? Sounds pretty bad! The present Japanese depression is so far, only 13 years old. They have a decade more to go and from the look of things, I suspect they will cling to this depression with the same tenacity England clung to their depression. These depressions are obviously useful for EXPORTERS as we can see: British consumers lost income rapidly as prices dropped so they couldn't unbalance trade via making purchases. Instead, they were locked out of the economic system as far as getting wage increases and the power to buy imports! This is identical to what Japan is doing. England didn't become 'poorer' during this time! The industrial base grew but this was for EXPORT. Indeed, a certain country fought off this British push to drop prices and beggar the lower classes. It was our very own nation, the US! After 1873, the US raised tariffs and barriers!
The Long Depression (1873â1896) affected much of the world from the early 1870s until the mid-1890s and was contemporary with the Second Industrial Revolution. At the time it was regarded as the Great Depression, until the more severe Great Depression occurred in the 1930s. It was most notable in Western Europe and North America, but this is in part because reliable data from the period is most readily available in those parts of the world. The United Kingdom is often considered to have been the hardest hit by the Long Depression, and during this period it lost much of its large industrial lead over the economies of Continental Europe. The Depression is usually believed to have ended by 1897. The global economy grew at an impressive rate from that year to the start of World War I.
The causes of the Depression are debated. The primary cause of the depression was a shortage of available money to facilitate trade. The most immediate cause, and the date that is often used as the start of the Depression, was the collapseof the Vienna Stock Exchange on May 9, 1873.
All the causes of all the panics and depressions are debated. Often, the debaters leave out much of the world and concentrate on their home states. But all the big depressions/recessions were global going back two thousand years if not longer. Certainly, all of the contractions or price plunges in the West have been shared by all and sundry. If banks in Amsterdam are failing, they fail in England, Spain, France and all other trade partners. So all causes have to be both specific and global at the same time. It is the idea of 'the straw that broke the camel's back.' Events happen all the time but when things are just right and the debt burden is too great for all the banks, it takes sometimes very small events to trigger a collapse. But the greater events are slightly removed in time. In the case of the 1873 panic, I would suggest the shattering event was displaced by only 2 1/2 years: the defeat of France by the new rising economic and military power in Europe---Germany.
The New York Stock Exchange closed for 10 days. Of the country's 364 railroads, 89 went bankrupt. A total of 18,000 businesses failed between 1873 and 1875. Unemployment reached 14% by 1876, during a time which became known as the Long Depression.
Funny, this is also called 'The Gilded Age.' The rich got much richer and more powerful. A flood of refugees from the mess in Europe poured into the US and South America as well as many other places like Africa and Australia. The deliberate starvation of the masses in Europe forced them outwards in a mass exodus that covered the planet. This was the years of the greatest colonization of the planet by Europeans. 80% of the American population came here after the Panic of 1873 and before 1923 when the doors slammed shut.
If we look closer at 1873 itself, we can see how destabilized the system was after only one year of France struggling to pay off Germany's invasion:
The Baron's vision of a grand universal event failed to materialize. About half of the exposition space was reserved for Vienna's own exhibits, while the other half was given to showcase the rest of the world. The United States didn't realize how significant the fair was until it was too late to prepare an exhibit, and were sorely missing from the exposition. Great Britain did not display anything new, and France had just been defeated in the Franco-Prussian war, and was not equipped to prepare a comprehensive exhibit.
Vienna's reputation also did not improve as a result of the fair. The site itself wasn't even ready when the exposition was officially opened, adding to the view of Austria as a perpetually unprepared country. Days after the opening ceremony, the Viennese stock market crashed, causing a depression and severe unemployment. There was also an outbreak of cholera during the summer of the fair, and a flood that damaged buildings towards the end. This, and the fact that vendors were charging high prices for their goods and services, discouraged visitors from coming to the exposition. Vienna never held another world fair after 1873.
Starting with the Crystal Palace in England in 1851, all powerful nations wanted to show off technological, manufacturing and inventions of various sorts in massive shows. Austria was no exception except in this case, there was a curious inability to carry through with this show due to many problems which I would suggest were symptoms of impending collapse. The opening of the fair coincided with the first stock collapse which was only a harbinger of far worse to come. Within a year, 90% of the companies selling stocks on the Vienna exchange were bankrupt.
Mixing up cause and effect, it is hard to see what triggered which problems. The people of Vienna are no more prone to panic than anyone else, outside of maybe Dr. Freud's patients [just joking]. What had changed in world trade?
In 1869, the Suez Canal had opened. But the French who built it by using near-slave labor [a very common approach to these things as we did the same, taking contract workers who were Chinese at this same time to finish the Western half of the railroad that opened at this same time!]. The French were now paying off the Germans while trying to hang onto Egypt. England wanted Egypt so they gave the Pasha many loans and he couldn't pay so he gave them his shares in this tremendous choke point for trade. So England began to funnel the profits from this canal to London. While France had to divert profits to pay bonds for the money they gave to Germany!
This destabilized the banking system and set into motion potential for any choke-point event to cause a panic. Perhaps the bourse in Vienna, alarmed at the mounting losses of this fair, decided to cut their losses and move money into secure bonds backed by gold, for example? In general, all my long life, when there is uncertainty, investors move to gold.
I found some very old NYT news clippings online. I like reading these because our ancestors wrote very well and could think quite clearly and minced no words to describe reality. Indeed, I find these old articles refreshing to read for I can see the writers really wanted to figure out what was going on! There is very little propaganda talk like we see today. Just the facts, Mam'.
The US instantly responded to the French desire to flood us with exports to pay for the 5 billion gold francs sent to the Germans. France decided to close trade with the US and began charging high tariffs on US exports to France so President Grant instantly retaliated. Note how this tit and tat was played out! The Japanese have successfully locked the US out of Japan for the last 30 years and all we do is negotiate. We don't retaliate.
Back then, our ancestors were a lot more aware of the dangers of uneven trade as well as currency imbalances. France was paying for Germany's extractions by charging import taxes. The US could not allow this and retaliated. Tariffs and barriers are old tools for international diplomacy and trade, after all! England, empress of the world, wanted none such things hindering her invading markets and thus, was pro-free trade. Like the present US empire. But like us, England ended up being duped by this system as military power flagged.
We can see already an international banking/trade crisis building via this proclamation. By 1873, the stage was set for the collapse. For example, I looked up the Bank of Belgium since it is mentioned concerning Napoleon. Belgium had a boom until 1873. Then it suffered set backs. Aside from governments with armies, the next best way to rob banks is to own or run a bank. And this was the case here. Following the example of the Bank of England, Belgium's rulers in 1873, granted this bank the right to issue bank notes which would pass for 'money' to pay rents and loans. Like our modern dollars. The bank then lost half of its funds to embezzlement. This amplified the banking crisis, of course.
Most histories of this crash like to pin the blame on Austria but look at this story! It is from the same time frame as the Austrian stock crash! Obviously, England's banking system was going under and had to be rescued by the government. Just like last July, the banking woes were increasingly obvious and reading the article here, we can see eerie similarities to this last summer!
Right after that article appeared which addresses the problems of trade flagging, England's banking system nearly collapses.
I find it rather ironic that this panic is exactly the same time of year as the present panic. The run on Black Rock banks was about the same time. The central banks have been quite frantic, trying to fix this mess they created or allowed or encouraged.
By November, the banking crisis hit the US. We were not the cause but the recipient of this collapse. Note how the article talks about how different and frankly BETTER the US system is. They mention the frightful harmonic pattern to the fiat British banks collapsing. They note the 10 year cycle and how, if the central bank works with the government for a 'soft' landing, it leads to worse and worse situations until the whole thing blows up in everyone's pocket books. I have noted this in the past. The central bank's interventions tend to be attempts at continuing some unsustainable status quo. When the status quo limps onwards needing increasing help and injections of money, it finally staggers like a lame horse and dies in its harness. So it was in 1873.
We got a clone of the British system in 1913. This was so the US could harmonically echo the Bank of England as it did it harmonic swings, laboring to keep the elites afloat no matter what. Note that the minute this happened, the US followed England into a World War. Then a boom and collapse that led to a second World War. Then we had a merciful period when Britain demanded the Bretton Woods Accords that protected their banks and currency even though both were bankrupt. The US helped Britain and now both are in the same frame of mind as in 1913: trying to maintain an increasing series hopeless status situations which require bigger and bigger interventions. And like the bankers at the top of this long story, the speculators and bankers our central banks are protecting are TRAITORS who give money to people planning to slit our throats on the economic front!
The US kept its money in the TREASURY. This is very significant. The President could resist the demands of the speculators and financiers, the clique that run the banks can't go wailing to Bernanke, demanding he give them goodies. If the President were to go to the people and explain the banking crisis and then seize the banks that are bankrupt and send in marshals and the Secret Service! Well!
These articles here are all very interesting to read and I would reproduce them entirely only they are covered by the NYT copyrights. On the other hand, they do talk about the exact same problems we have today. They note that excessive loans handed out by banks which refuse to have realistic reserves to cover the possibility of default, the problem of getting fees and bonuses by being reckless rather than being cautious, how this increases business but also increases the money supply and how this causes inflation when people bid up commodities.
Also, these articles discuss the collapse of wages due to the opening of the Suez canal and the US rail systems. And the invasion of Asia by Europeans which caused the currencies and economies in the East to collapse and flooded the West with goods and food. Which caused global wages to fall even in the empires of the West which increased worker discontent. We have the same thing: depressions are always due to LOSS OF WORKING CLASS PURCHASING POWER.
The US government wants to hand out goodies to get the workers back into shopping only this doesn't solve the collapse of wages due to globalization! And why on earth are we repeating exactly the same free-trade/fiat money/depressing wages scheme of the British or the present day Japanese? This is pure insanity and will end violently.
For the depression we are being forced into will be the Golden Age for the rich who set this whole thing up. Wagner's Ring der Nibelungen cycle was finally finished in 1873. And it is all about money, building dynasties and destroying the entire thing in one nasty snarly mess called 'Gotterdammerung.'