Key points<br />Capitalism is like democracy – not perfect but the best economic system ever devised<br />Capitalism has d...
Adam Smith – capitalism’s philosopher<br />
Charles MacKay<br />His famous book: Memoirs of Extraordinary Popular Delusions and the Madness of Crowds.<br />The Tulipo...
John Law<br />The inventor of paper money, created the Mississippi Bubble, France 1720, which was part of the destruction ...
Sir John Blunt<br />Orchestrated the South Sea Bubble, London, 1720.<br />
Duke of Wellington, Battle of Waterloo, 1815<br />It was damned close run thing, but England defeated France at the battle...
Nathan Rothschild<br />Helped fund Wellington’s campaign, then when the war ended converted gold to British bonds and made...
The Age of Innovation, 1816 – 1914<br />Stevenson’s Rocket, new inventions, new industries, new lands, all controlled by t...
US & UK Share prices 1800 to 1914<br />
Marvellous Melbourne’s Astonishing Property boom and bust<br />Gold discovered in 1851; massive development boom, land boo...
Theobald von Bethmann-Hollweg<br />Described WWI was ‘a leap in the dark, and a roll of the iron dice’.<br />
John Maynard Keynes<br />Economic Consequences of the Peace<br />The General Theory of Employment, Interest and Money<br />
Charles Mitchell – his role in the Great Depression<br />
Sir Winston Churchill<br />Rescued modern capitalism in the final battle for Europe. The two World Wars bankrupted the UK,...
Sir Winston Churchill<br />The USA insisted after WWII that the US dollar become the global currency. But the USA has a mi...
President Lyndon Johnson<br />Fought wars on Communism in Vietnam and on Poverty in the USA.<br />Most responsible for gre...
Milton Friedman<br />‘Inflation is always an everywhere a monetary phenomenon’.<br />
US Fed Chairman Paul Volcker<br />Slayed the dragon of inflation in USA in 1979 – rest of capitalist world followed in due...
Asian miracles – and the inevitable asset busts<br />Plus	-  Asian Crisis 1998<br />Russian Crisis<br />LTCM Crisis<br />
Western Witchcraft – the world wide web …<br />... and a reprise of the Age of Innovation ...<br />... but where was the B...
The US exports asset bubbles to the world<br />US Fed Chief Alan Greenspan<br />Do not fight asset bubbles; but respond to...
US Fed Chief Ben Bernanke<br />Follows Mr. Greenspan ... Seeking help<br />
The legacy of Messrs Greenspan and Bernanke<br />... and it ain’t over yet.<br />
Messages – for governments and central banks<br />We need less discretionary economic policies<br />Rules based, not ‘insp...
Messages for individuals and families<br />Do you wish to build and conserve wealth?<br />Study the history of boom & bust...
Heros & villains of the great crises of capitalsim.slides
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Heros & villains of the great crises of capitalsim.slides

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A summary of Peter Jonson's Great Crises of Capitalism, available from Connor Court Publishing

Published in: Technology, Economy & Finance
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Heros & villains of the great crises of capitalsim.slides

  1. 1.
  2. 2. Key points<br />Capitalism is like democracy – not perfect but the best economic system ever devised<br />Capitalism has delivered great wealth but also dangerous financial crises<br />Financial crises might weaken or destroy capitalism – ‘strangling the golden goose’<br />We need more sensible regulation<br />Individuals need to play the ups and downs<br />Now meet the heroes and villians of capitalism<br />
  3. 3. Adam Smith – capitalism’s philosopher<br />
  4. 4. Charles MacKay<br />His famous book: Memoirs of Extraordinary Popular Delusions and the Madness of Crowds.<br />The Tulipomania, Holland, 1636.<br />The Mississippi Bubble, France, 1720<br />The South Sea Bubble, England, 1720<br />‘Nobody seemed to imagine that the nation itself was as cupable as the South-Sea company. Nobody blamed the credulity and avarice of the people, - the degrading lust of gain, which had swallowed up every nobler quality of the national character, or the infatuation which had made the multitude run their heads with such frantic eagerness into the net held out to them by scheming projectors.’<br />
  5. 5. John Law<br />The inventor of paper money, created the Mississippi Bubble, France 1720, which was part of the destruction of the French Empire.<br />
  6. 6. Sir John Blunt<br />Orchestrated the South Sea Bubble, London, 1720.<br />
  7. 7. Duke of Wellington, Battle of Waterloo, 1815<br />It was damned close run thing, but England defeated France at the battle of Waterloo, with help from the Prussians.<br />Britain became the global superpower.<br />
  8. 8. Nathan Rothschild<br />Helped fund Wellington’s campaign, then when the war ended converted gold to British bonds and made a financial killing.<br />Rothschild family cracked the code to create and maintain intergenerational wealth.<br />
  9. 9. The Age of Innovation, 1816 – 1914<br />Stevenson’s Rocket, new inventions, new industries, new lands, all controlled by the Bank of England and the Gold Standard.<br />
  10. 10. US & UK Share prices 1800 to 1914<br />
  11. 11. Marvellous Melbourne’s Astonishing Property boom and bust<br />Gold discovered in 1851; massive development boom, land boom of heroic proportion, deep depression followed. <br />Big question: is 1850 equivalent to 1980?<br />Melbourne Property Prices 1874 to 1909<br />
  12. 12. Theobald von Bethmann-Hollweg<br />Described WWI was ‘a leap in the dark, and a roll of the iron dice’.<br />
  13. 13. John Maynard Keynes<br />Economic Consequences of the Peace<br />The General Theory of Employment, Interest and Money<br />
  14. 14. Charles Mitchell – his role in the Great Depression<br />
  15. 15. Sir Winston Churchill<br />Rescued modern capitalism in the final battle for Europe. The two World Wars bankrupted the UK, while establishing the USA as the new global superpower.<br />
  16. 16. Sir Winston Churchill<br />The USA insisted after WWII that the US dollar become the global currency. But the USA has a mixed record as an economic manager, and its role is being challenged by China.<br />
  17. 17. President Lyndon Johnson<br />Fought wars on Communism in Vietnam and on Poverty in the USA.<br />Most responsible for great inflation of the 1970s<br />
  18. 18. Milton Friedman<br />‘Inflation is always an everywhere a monetary phenomenon’.<br />
  19. 19. US Fed Chairman Paul Volcker<br />Slayed the dragon of inflation in USA in 1979 – rest of capitalist world followed in due course<br />
  20. 20. Asian miracles – and the inevitable asset busts<br />Plus - Asian Crisis 1998<br />Russian Crisis<br />LTCM Crisis<br />
  21. 21. Western Witchcraft – the world wide web …<br />... and a reprise of the Age of Innovation ...<br />... but where was the Bank of England?<br />
  22. 22. The US exports asset bubbles to the world<br />US Fed Chief Alan Greenspan<br />Do not fight asset bubbles; but respond to asset busts by cutting interest rates almost to zero<br />
  23. 23. US Fed Chief Ben Bernanke<br />Follows Mr. Greenspan ... Seeking help<br />
  24. 24. The legacy of Messrs Greenspan and Bernanke<br />... and it ain’t over yet.<br />
  25. 25. Messages – for governments and central banks<br />We need less discretionary economic policies<br />Rules based, not ‘inspired’ acts of discretion<br />Perhaps a modern version of the Gold Standard<br />China has endorsed such a change – in conflict with USA<br />Fiscal policy needs reform – not panic reaction<br />Bail out policy needs clear rules also<br />
  26. 26. Messages for individuals and families<br />Do you wish to build and conserve wealth?<br />Study the history of boom & bust<br />Take an intergenerational view – someone in each generation has to become expert<br />Be prepared to play the big swings in asset prices<br />

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