In the history of finance, many diverse objects have become the center of speculative attention, even perishable items. Agricultural commodities have caused investment crazes that boom and bust as dramatically as any. These are not always the major ‘cash crops’ that are obviously commercially important. Included are even novel crops or livestock that, at least…
When commodity booms materialize, the effects are felt not only where the sought-after materials are mined or harvested but also in the financial centers of the world, the places where the commodities are marketed and traded and where production and trade is financed and insured. Rubber was a new gold in the late 19th and…
In the early 1870s, the Rothschilds were an established banking family active across Europe. The Nobels were lesser known, at least in the financial capitals of the continent, engaged as they were in the armaments industry of distant Russia. Still, within thirty years, the Nobels and one branch of the Rothschild family would find themselves…
For well over a century, London was the center of the world’s gold trade despite being near no major sources of the metal nor a particularly large consumer of it. It was, however, the capital of an empire that spanned many of the gold producing regions of the world and the city was home to…
In 2008, the United States produced 18 trillion cubic feet of natural gas. Just over ten years later, this had grown to 34 trillion cubic feet. An even more spectacular rise took place in oil production over those years. Much of this growth was the result of new production techniques, namely hydraulic fracturing, that made…
The extraction of commodities can be the fuel for financial booms and busts. Whether it be cotton in 19th century Egypt or oil in 20th century Venezuela, commodities have enriched people, firms, and nations, often temporarily. Perhaps some of the most historically memorable commodity booms were the gold rushes of the 19th century, which snapped…
Exporting commodities can be a precarious source of riches. From the 20th century to today, oil has been a blessing and a curse to nations that rely on it to sustain their standards of living. In the 17th and 18th centuries, colonialism added an extra dimension to the commodities curse, shaping raw materials booms and…
For most countries, the condition of the public finances is driven by factors as diverse as whether the country is at war or peace, its level of employment, and its demographics. However, for some, the prices of natural resources are also of extraordinary importance. This is especially true for petrostates, nations whose economies are overwhelming…
Inflation erodes the buying power of money and consequently the real value of income producing investments. In the 1970s, rates of inflation rose precipitously around the world. This reduced not just the value of money and long maturity fixed-income securities but even hurt economic performance and an array of other financial assets, including stocks, which…
Imagine a cabal of speculators pushing the limits of legality, or even exceeding them, intent on generating great profits for themselves in the blink of an eye. Such stories are many in the history of finance. From insider trading to market manipulation, the pressure to outperform, or even just the allure of riches, have brought…
