Monday, March 30, 2015
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

History shows some common themes

stevenson column sig

By
From page B7 | May 04, 2014 |

Maybe I should take some medication, or drink heavily when I watch cable television.

For some reason, and I don’t understand precious metals, the gold purveyors seem to be the heaviest advertisers on TV. They all seem to use the same theme in one form or another. You know what it is by now: an economic disaster is about to befall us, and the only way to protect yourself is to own gold. Or, since gold hasn’t moved in the past couple of years, some of the propaganda is now devoted to silver.

Well, in spite of looking at the gold market, mostly from the sidelines, I am no more in position to make an intelligent forecast than I was 42 years ago. Oh, sure, there are some factors that usually prevail, such as unexpectedly high inflation, perhaps caused by a spike in oil prices. That’s what happened about 40 years ago, around the time of the 1973 Arab-Israeli war and the resulting boycott by Saudi Arabia.

But if we just look at oil, we’re missing a lot of other possibilities.

The cover story in a recent issue of The Economist was titled “A History of Finance in Five Crises, and how the Next One Could be Prevented.” From the introductory essay, “These five crises reveal where the titans of modern finance – the New York Stock Exchange, the Federal Reserve, Britain’s giant banks – come from . . .” but they also highlight the way investors have deceived themselves that each “reform” would protect them from a future collapse.

The first crisis took place in 1792, shortly after the founding of the Republic. The First Bank of the United States was conceived and guided by Alexander Hamilton, our first Treasury secretary. Investors were so excited by the possible rewards of stock ownership that they risked much of their own capital. Sure enough, the bank ran into trouble when it ran out of the hard currency that backed their paper notes. There was a panic and multiple bank and business failures, but Hamilton saved the day with a multitude of actions.

In 1825, the financial curse shifted to Britain, whose citizens became enamored of bonds issued by newly independent Latin American countries.  As Spain – the “mother” country – lost its power and influence, the new countries became a “sure thing.” In fact, British believers, who were six months by sea away from their investments, had no idea what they were doing – (has anything changed?), but soon learned the hard way. They discovered there was nothing behind the certificates they had bought, and so much money was lost that it almost destroyed the entire British economy.

In 1857, the frenzy was triggered by an infatuation with a new industry: railroads. Once again, investors, both American and British, were snookered so badly that the failure of a few railroads had a devastating effect on the U.S. economy, so bad that it took years, not months, to recover.

1907’s collapse was almost directly caused by two swindlers, Augustus Heinze and Charles Morse. These two crooks had borrowed and embezzled in order to gain control of United Copper. The collapse of that company caused the empire created by Heinze and Morse to fall apart.

It also caused the destruction of Knickerbocker Trust, a new kind of lender. There was a run on Knickerbocker when the news came out that it was controlled by our two friends. Macy’s flagship store, by the way, is located at 34th and 5th, the site of the failed trust.

That brings us to the Crash of 1929. I’ll get to that in next week’s column.

Bud Stevenson, a retired stockbroker, lives in Fairfield. Reach him at [email protected]

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

2 drivers killed in same area, an hour apart

By Amy Maginnis-Honey | From Page: A1, 12 Comments

 
Easter activities, events abundant

By Susan Hiland | From Page: A1 | Gallery

Christians begin Holy Week with Palm Sunday celebrations

By Amy Maginnis-Honey | From Page: A1, 1 Comment | Gallery

 
My guide to dining out

By Tony Wade | From Page: A2, 5 Comments

Local governments post week’s meeting times

By Susan Hiland | From Page: A3

 
Top young spellers to compete for Solano title

By Glen Faison | From Page: A3

Police investigate shooting off North Texas Street

By Amy Maginnis-Honey | From Page: A3, 8 Comments | Gallery

 
Vallejo police seek leads in weekend homicide

By Amy Maginnis-Honey | From Page: A3

Biz Buzz: Re/Max hires new Realtor

By Susan Hiland | From Page: A10

 
Biz Buzz: PAL receives donation from glass company

By Susan Hiland | From Page: A10 | Gallery

 
Biz Buzz: Wiseman officer names Perez to key post

By Kevin W. Green | From Page: A10

.

US / World

 
Analysis finds unequal pay for women on California Capitol

By The Associated Press | From Page: A3

Songwriter injured in California crash; motorcyclist killed

By The Associated Press | From Page: A3

 
Taylor Swift wins artist of the year at iHeartRadio Awards

By The Associated Press | From Page: A4

Court ruling opens door for federal execution of murderer

By The Associated Press | From Page: A4

 
 
Police: 2 bodies found in NYC building explosion rubble

By The Associated Press | From Page: A5

 
Waving fronds around the world, Christians mark Palm Sunday

By The Associated Press | From Page: A7

Air Canada plane makes hard landing short of Halifax runway

By The Associated Press | From Page: A7

 
Small tsunami generated in Pacific after earthquake

By The Associated Press | From Page: A9

.

Living

Community Calendar: March 30, 2015

By Susan Hiland | From Page: A2

 
Today in History: March 30, 2015

By The Associated Press | From Page: A2

Horoscopes: March 30, 2015

By Holiday Mathis | From Page: B6

 
Parenting: If a father is abusive, a mother must act

By The Washington Post | From Page: B8

 
Horoscopes: March 31, 2015

By Holiday Mathis | From Page: B8

.

Entertainment

TVGrid March 30

By Daily Republic Syndicated Content | From Page: A10

 
TVGrid March 31

By Daily Republic Syndicated Content | From Page: A11

Michelle Obama declares ‘Black Girls Rock!’

By The Associated Press | From Page: A11, 3 Comments

 
.

Sports

Spartans Final Four-bound after 76-70 OT win over Louisville

By The Associated Press | From Page: B1

 
Duke back in Final Four after 66-52 win over Gonzaga

By The Associated Press | From Page: B1

 
Hamlin wins for 25th time, and fifth time at Martinsville

By The Associated Press | From Page: B2

Jimmy Walker wins hometown Texas Open

By The Associated Press | From Page: B2

 
Oakland OF Josh Reddick won’t be ready for start of season

By The Associated Press | From Page: B2

California Chrome heads to Britain, to race at Royal Ascot

By The Associated Press | From Page: B2

 
Vettel wins Malaysian GP to end Mercedes streak

By The Associated Press | From Page: B2

Joe Gibbs on son: most courageous person I’ve been around

By The Associated Press | From Page: B2

 
Chodounsky defends slalom title at US Alpine Championships

By The Associated Press | From Page: B2

South Carolina earns 1st Final Four berth, beats FSU 80-74

By The Associated Press | From Page: B2

 
Turner says Saturday regional finals highest-rated in decade

By The Associated Press | From Page: B2

Apology for wrong anthem for El Salvador before game in US

By The Associated Press | From Page: B2

 
Montoya holds off Power to give Penske 1-2 sweep at St. Pete

By The Associated Press | From Page: B2

Stanford’s Randle chases school scoring record, title at NIT

By The Associated Press | From Page: B2

 
Hamlin wins for 25th time, and fifth time at Martinsville

By The Associated Press | From Page: B2

Cain goes 4 innings in Giants win over LA

By The Associated Press | From Page: B3

 
Graveman pitches into 7th inning as A’s beat Brewers 7-0

By The Associated Press | From Page: B3

.

Business

.

Obituaries

Robert Roberts

By Nancy Green | From Page: A4

 
Janice Jewel Thompson

By Nancy Green | From Page: A4

.

Comics

Peanuts March 30

By Daily Republic Syndicated Content | From Page: B5

 
Zits March 30

By Daily Republic Syndicated Content | From Page: B5

Blondie March 30

By Daily Republic Syndicated Content | From Page: B5

 
Pickles March 30

By Daily Republic Syndicated Content | From Page: B5

Get Fuzzy March 30

By Daily Republic Syndicated Content | From Page: B5

 
Sally Forth March 30

By Daily Republic Syndicated Content | From Page: B5

For Better or Worse March 30

By Daily Republic Syndicated Content | From Page: B5

 
Baldo March 30

By Daily Republic Syndicated Content | From Page: B5

Garfield March 30

By Daily Republic Syndicated Content | From Page: B5

 
Dilbert March 30

By Daily Republic Syndicated Content | From Page: B5

Baby Blues March 30

By Daily Republic Syndicated Content | From Page: B5

 
Frank and Ernest March 30

By Daily Republic Syndicated Content | From Page: B5

B.C. March 30

By Daily Republic Syndicated Content | From Page: B5

 
Wizard of Id March 30

By Daily Republic Syndicated Content | From Page: B5

Beetle Bailey March 30

By Daily Republic Syndicated Content | From Page: B5

 
Rose is Rose March 30

By Daily Republic Syndicated Content | From Page: B5

Sudoku March 30

By Daily Republic Syndicated Content | From Page: B6

 
Bridge March 30

By Daily Republic Syndicated Content | From Page: B6

Word Sleuth March 30

By Daily Republic Syndicated Content | From Page: B6

 
Crossword March 30

By Daily Republic Syndicated Content | From Page: B6

Cryptoquote March 30

By Daily Republic Syndicated Content | From Page: B6

 
B.C. March 31

By Daily Republic Syndicated Content | From Page: B7

Blondie March 31

By Daily Republic Syndicated Content | From Page: B7

 
Peanuts March 31

By Daily Republic Syndicated Content | From Page: B7

Baldo March 31

By Daily Republic Syndicated Content | From Page: B7

 
Rose is Rose March 31

By Daily Republic Syndicated Content | From Page: B7

Beetle Bailey March 31

By Daily Republic Syndicated Content | From Page: B7

 
For Better or Worse March 31

By Daily Republic Syndicated Content | From Page: B7

Dilbert March 31

By Daily Republic Syndicated Content | From Page: B7

 
Garfield March 31

By Daily Republic Syndicated Content | From Page: B7

Pickles March 31

By Daily Republic Syndicated Content | From Page: B7

 
Zits March 31

By Daily Republic Syndicated Content | From Page: B7

Sally Forth March 31

By Daily Republic Syndicated Content | From Page: B7

 
Get Fuzzy March 31

By Daily Republic Syndicated Content | From Page: B7

Wizard of Id March 31

By Daily Republic Syndicated Content | From Page: B7

 
Baby Blues March 31

By Daily Republic Syndicated Content | From Page: B7

Frank and Ernest March 31

By Daily Republic Syndicated Content | From Page: B7

 
Word Sleuth March 31

By Daily Republic Syndicated Content | From Page: B8

Bridge March 31

By Daily Republic Syndicated Content | From Page: B8

 
Sudoku March 31

By Daily Republic Syndicated Content | From Page: B8

Cryptoquote March 31

By Daily Republic Syndicated Content | From Page: B8

 
Crossword March 31

By Daily Republic Syndicated Content | From Page: B8