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-   -   Repeat of the 1880s? (http://www.early-retirement.org/forums/f52/repeat-of-the-1880s-78017.html)

Mr._Graybeard 07-17-2015 08:17 AM

Repeat of the 1880s?
 
As a history buff I see parallels between the times we live in today and the decades after the Civil War. Back then the country had nearly inconceivable potential for expansion on many fronts. The growth rate in productivity was so great, though, that it pushed the country into an extended period of deflation that reached to the 20th century. There were just too many bushels of wheat, tons of coal and man-hours on the market chasing too few available dollars.

Politically the effect can be seen in the rise of the Greenback Party and the free-silver movement. Socially, it's notable that some of the most celebrated individuals of the period were gunmen.

In our globally integrated economy, the dot-com boom sent the economy soaring, just like the Civil War did in the northern states. The Internet connected the world like the railroads opened up the West. And the modernization of economies in China, India, and Korea have flooded the world economy with cheap labor like the waves of European immigration (and slave emancipation) fed the labor market in 19th-century America.

If the pattern fits, and history repeats itself, we may be in for some "interesting times."

AnIntentionalRoad 07-17-2015 10:35 AM

Like what? A fabricated reason to go to war with Spain? Oh, I guess we already had that in Iraq.

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Mr._Graybeard 07-17-2015 11:04 AM

Like extended low-inflation rates, for one thing. Perhaps civil unrest as people find it hard to get ahead. A rising anti-immigrant mood

One phenomenon of the period in the 1800s was that wealth became concentrated in a small share of the population (Mark Twain called it The Gilded Age, alluding to the country's thin veneer of wealth on the surface).

tmm99 07-17-2015 11:43 AM

Quote:

Originally Posted by Mr._Graybeard (Post 1615265)
Like extended low-inflation rates, for one thing. Perhaps civil unrest as people find it hard to get ahead. A rising anti-immigrant mood

One phenomenon of the period in the 1800s was that wealth became concentrated in a small share of the population (Mark Twain called it The Gilded Age, alluding to the country's thin veneer of wealth on the surface).


Wow. Tell me more.


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marko 07-17-2015 11:57 AM

Quote:

Originally Posted by tmm99 (Post 1615275)
Wow. Tell me more.


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Me too! I've thought about this myself recently. Thinking about how the so-called 1% are living in a Gatsby-esque era.

My grandparents used to say "well, he was incredibly rich BEFORE INCOME TAXES, now he's just very rich".

They used to say that a lot "...before income taxes...." which they used as a time reference; the 1880's to 1915 or so.

marko 07-17-2015 12:00 PM

Quote:

Originally Posted by AnIntentionalRoad (Post 1615248)
Like what? A fabricated reason to go to war with Spain? Oh, I guess we already had that in Iraq.

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I think you're confirming Graybeard's thesis.

M Paquette 07-17-2015 01:31 PM

I'm eagerly awaiting Mr. Twain's new book, myself. And how about them Clanton brothers? Damn!

easysurfer 07-17-2015 01:38 PM

automobile/driver less automobile. I see the similarity. :)

HFWR 07-17-2015 02:17 PM

Quote:

Originally Posted by easysurfer (Post 1615322)
automobile/driver less automobile. I see the similarity. :)

Not so fast...

Google self-driving car involved in first injury accident | Fox News

But then there's this...

Tesla Offers New ‘LudicrousÂ*Mode’: ZeroÂ*to 60 in 2.8 Seconds - Bloomberg Business

Totoro 07-17-2015 02:37 PM

Quote:

Originally Posted by HFWR (Post 1615340)

"The first car slowed to a stop so as not to block the intersection — traffic on the far side was not moving. The Google car and the other car in front of it also stopped

Within about a second, a fourth vehicle rear-ended the Google car at about 17 mph. On-board sensors showed the other car did not brake."


Haven't seen an at fault Google incident as of yet (in driverless mode). Incredible if you ask me.

NW-Bound 07-17-2015 03:55 PM

And that makes the Tesla car "green" and worthy of tax subsidy?

I read the article, and they got that impressive acceleration by drawing 1500 A from the battery pack, which means 20 A through each of these 18650-sized Panasonic batteries (the current is divided through 74 parallel paths). This current is well within the specs of each battery. Of course there are other limitations in the system that were tough to overcome, but this demonstrates the wonderfulness of the Lithium Ion battery.

http://cdn.teslarati.com/wp-content/...50-150x150.jpg

MichaelB 07-17-2015 03:58 PM

Quote:

Originally Posted by HFWR (Post 1615340)

Ludicrous Mode? That's straight out of Space Balls
https://www.youtube.com/watch?v=ygE01sOhzz0

Mr._Graybeard 07-17-2015 04:03 PM

Quote:

Originally Posted by M Paquette (Post 1615317)
I'm eagerly awaiting Mr. Twain's new book, myself. And how about them Clanton brothers? Damn!

Interesting thing about the Clantons. They and the rest of the rural "cowboy" crowd around Tombstone leaned Democratic while the Earps and the merchant class of the city were largely Republican in their sympathies. Party politics were definitely a factor in their rivalry, and politics could get a little heated back then.

Totoro 07-17-2015 04:04 PM

.. maybe back on topic .. is productivity in the US still improving? Might be different than 1880s.

I thought it was stagnating (in the UK it is for sure, Germany also I think).

MichaelB 07-17-2015 04:16 PM

Partisan politics of the 1800's cowboys? Let's not go there - it has nothing to do with FIRE.

NW-Bound 07-17-2015 04:37 PM

Quote:

Originally Posted by Mr._Graybeard (Post 1615177)
...There were just too many bushels of wheat, tons of coal and man-hours on the market chasing too few available dollars...

I do not know much about the 1880 era, but we do seem to have a surplus of commodities now. Oil is suddenly cheap again. Industrial metals such as steel and copper are abundant again due to more mines opening up when demand drove prices sky high in the mid 2000s.

I just read that pig farms in Denmark are having a hard time because they get only 1.40 euros/kilo, and need 1.70 euros to break even. Here in the US, there's overproduction of milk, and they just dump it in manure pits. A few years ago, several European countries had a wine glut, in which the vintners had to sell for a dime a liter to distill into ethanol to burn in cars. There was also a wine glut in Australia, South America, and South Africa, and the common solution was to let the vines die and cut production. Coffee is getting cheap again too.

I guess it's tough to make money when in the developed world we have more than we can consume. What people still want are not necessities like food, water, roof over the head, basic transportation but fluffs like new iPhones, fast cars, wonder drugs that promise to let them live till 100. There are still places on earth where people are hungry, but these miserable folks have no way to pay for the food that we overproduce.

When commodities are cheap, if a retiree keeps his taste simple his life will not be hard. I am OK with that.

Mulligan 07-17-2015 09:13 PM

I never really thought of it in terms of relating to a previous historical era. But my primitive working/investment thesis has been tied to technology keeping the lid on inflation. I have been reaching for as high and as safe of yield that I can get and not worry about duration in preferred stocks. It has been working fine, and will continue to do so.....until it doesn't. :)


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Fermion 07-17-2015 09:45 PM

I don't think you can tie to a time period so long ago with any degree of accuracy.

Heck, the world changes so fast now I don't know if we can even relate to events a decade ago.

AllDone 07-17-2015 10:08 PM

Remember that the country was on a gold standard, so there literally was not much money available and that lack drove the deflation. Grover Cleveland ran on a platform that opposed "free silver" which was the inflationary policy of backing dollars with silver as well as gold. He advocated balanced budgets and fiscal austerity, too.

There is at least one presidential candidate who would like to return to a gold standard.

daylatedollarshort 07-17-2015 10:37 PM

Quote:

Originally Posted by NW-Bound (Post 1615399)
I guess it's tough to make money when in the developed world we have more than we can consume. What people still want are not necessities like food, water, roof over the head, basic transportation but fluffs like new iPhones, fast cars, wonder drugs that promise to let them live till 100. There are still places on earth where people are hungry, but these miserable folks have no way to pay for the food that we overproduce.

When commodities are cheap, if a retiree keeps his taste simple his life will not be hard. I am OK with that.

Galbaith put it this way:

".... the mega-economy's expenditure of billions of dollars for the mental conditioning of consumers to the point where a well-financed advertising campaign can create needs, even urgent needs, which were never conceived of before in human history. To this end we are systematically brain-washed, and our whole way of life is being re-shaped, distorted, and corrupted to provide markets for the meta-structure."

Review of The New Industrial State
Galbraith's New Book on Industrial State Has Startling Impact - A book review by Professor Carroll Quigley


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