First credit crunch traced back to Roman republic
Politicians searching for historical precedents for the current financial turmoil should start looking a bit further back after an Oxford University historian discovered what he believes is the world’s first credit crunch in 88BC.
The good news is that Philip Kay knows how the http://www.wvwnews.net/story.php?id=6008 got themselves into financial bother. The bad news is no one knows how they got themselves out of it.
“The essential similarity between what happened 21 centuries ago and what is happening in today’s UK economy is that a massive increase in monetary liquidity culminated with problems in another country causing a credit crisis at home. In both cases distance and over-optimism obscured the risk,” said Kay, a supernumerary fellow at Wolfson College.
The monetary historian is giving a lecture today in which he will reveal how Cicero, the http://www.wvwnews.net/story.php?id=3818 in 88BC, when the same Mithridates invaded the Roman province of Asia, on the western coast of Turkey. Cicero claimed the invasion caused the loss of so much Roman money that credit was destroyed in Rome itself.The orator told his audience: “Defend the republic from this danger and believe me when I tell you – what you see for yourselves – that this system of monies, which operates at Rome in the Forum, is bound up in, and is linked with, those Asian monies; the loss of one inevitably undermines the other and causes its collapse.”
Kay said the words were “remarkable” for their contemporary tone. “Substitute US sub-prime for ‘the Asian monies’ and the UK banking system for ‘the system of monies which operates in the Roman Forum’ and it could have been written about the current credit crisis,” said Kay.
http://www.guardian.co.uk/business/2008/nov/28/credit-crunch-roman-republic-lecture