Thomas Ricks has a quick little post up at Foreign Affairs about the financial crisis of 33 A.D. that serves as a little reminder that the more things change, the more they stay the same:
The rest, as they say, is history.
It all began when Emperor Tiberius enforced a ceiling on interest rates, which caused a severe credit crunch, Tacitus relates in The Annals (book VI, 16-17). "Hence followed a scarcity of money, a great shock being given to all credit, the current coin too." This was of course followed by deflation of the sort we are seeing now in housing -- "a fall of prices, and the deeper a man was in debt, the more reluctantly did he part with his property, and many were utterly ruined." This is what business nowadays terms "distressed sales."
The
Roman equivalent of the Fed then pumped tons of money into the financial
system, and also cut interest rates to zero, which is about where we are now in
our own mess.
The rest, as they say, is history.
