The May 5, 1909 NYT reports on the forthcoming monthly Bulletin of the Chamber:

Comparing the records of 1908 with those of 1858, a most remarkable parallelism is revealed. They were both years of partial recovery from devastating panics that had swept the country in the years preceding. The financial crises of 1857 and 1907 not only occurred exactly fifty years apart, but they presented points of striking resemblance, so that of all the panics of the country no other two had more in common. There were the same antecedent years of immense gold production with its attendent speculation and inflation of prices. there was the same multiplication of banks and expansion of banking credits. There was the same enterprise in railroad extension. There was the same waste of capital in unproductive works. Preceding the panic of 1857 occurred the Crimean War; preceding that of 1907 occurred the war between Russia and Japan; both were heavy drains upon the world's resources.

So, let's go forward another 100 years. Although I am not a macroeconomist, here's my list of parallels from 1907 and 1857:

Immense increase in the money supply with its attendent speculation and inflation of (certain) prices

Multiplication of ("shadow") banks and expansion of banking credits

Enterprise in technological gadgets (akin to railroads? I am not sure)

Waste of capital in unproductive commercial and residential building and other marginal projects?

Wars in Iraq and Afghanistan

Hmmm.....maybe the Austrians are onto something.

Posted by Craig Depken at 02:05 PM in Economics