Dollarization in Ecuador

            Some currencies are essentially abandoned when they become increasingly worthless due to hyperinflation. The public simply transitions to using foreign currencies instead. However, it’s also possible for a government to officially dispense with its own money and adopt that of another country as its official legal tender. Ecuador experienced a major economic crisis in

The Poseidon Mining Bubble

           For centuries, investments in mines have been particularly speculative. As such, they tend to attract small investors rather than institutions. Also, their share prices can be subject to very large and swift movements once news, or mere rumors, get out. At the end of 1969, mining shares in Australia surged higher before very swiftly giving

Kuxe – German Mining Shares

            Mining can be a very capital-intensive business. Prospecting for gold by panning in a river may not be, but digging mine shafts and building any accompanying infrastructure to extract metal from deeper reserves most certainly is. So, to develop a mine, new companies with little history raise money by issuing shares to a large

Ship Finance through Boom and Bust

             Ships are large expensive assets that are financed over long periods of time. Therefore, in the case of warships, they are physical expressions of a state’s fiscal power. Meanwhile, cargo ships, including tanker ships, require private financing which has been leveraged to greater degree just in the past sixty years or so. However, shipping

The Older Icelandic Banking Crisis

            In 2008, Iceland was afflicted by a banking crisis caused in part by its banks raising huge sums of deposits from foreign savers at high interest rates and the investing of these deposits in questionable assets marked at values that proved impossible to realize. Banking assets as a percentage of Iceland’s small GDP grew

Crop Insurance

            Governments tend to be very involved in supporting their country’s agriculture. In various countries, this intervention ranges from funding research programs and irrigation projects, setting stringent regulations and grading standards, managing supply, protecting use of certain names and geographic labelling, and even involvement in farm finance such as by providing credit to farmers. In

Paper Money Through Four Dynasties

            The history of paper money in China began when merchants attempted to work around shortages of metal coins during the Tang Dynasty. Government issued paper money became well established during the Song Dynasty about 860 years ago, or about five centuries before paper money appeared at any particularly notable scale in the West. However,

Medieval Trade Settlement and Credit

            If required to settle every payment immediately, trade can become a very capital-intensive business despite its small margins. This would have been especially taxing back when far longer travel times would have meant inventories had to be held for longer. When metal coins made up most of the money supply, immediate settlement of purchases

A History of Credit Cards in America

            As financial developments came about, they largely became available to businesses before consumers and often to wealthy consumers before the masses. As a result, the most ubiquitous financial products today are often among the newest. Credit cards, particularly general purpose credit cards of the sort familiar to us today, were relatively rare even fifty

A Short History of Bretton Woods

            After the First World War, the world set about restoring the international gold standard that existed before the fighting. It took years to bring to fruition and the restoration fell apart almost as quickly. After the Second World War, the world once again went about recreating a monetary order largely along pre-war lines, albeit

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