Financial crisis and bailouts and Jubilee, oh my.

[Jubal Harshaw]

Here's a vanity post, put out there in hopes of illumination.

It strikes me that there's been a major financial crisis every 50-70 years in the US, and similar crisies in English history. Of course, that statement depends on how one defines a "financial crisis," but, putting that definition aside, it does seem that something happens on a pretty cyclical basis every other generation or so. It might be that each financial crisis occurs as the young men who lived through the last crisis die off, taking their experience with them.

For example, it appears we're just living through the latest such crisis. The men who were young in 1941 (a reasonable marker for the end, in the US, of the depression that started in 1929), are dying off now, and so another great financial crisis looms.

I wonder how long this has been going on. More to the point, I wonder if this sort of thing has been going on since before recorded financial history. Even more to the point, I wonder if a response to these financial crisies, if not the records of the crisis itself, has come down to us in the Jewish concept of "Jubilee."

As you may know, "Jubilee" is an ancient Jewish custom of forgiving debts, ending leases, freeing slaves, and generally starting the financial system fresh. In Leviticus, it's described as occurring every 50th year, about when the generation of men who were working at the start of the last Jubilee might be expected to have died off or otherwise left the financial system of the day.

I am wondering if, perhaps, "Jubilee" was an ancient recognition of, and formalization of, the unrest that seems to occur in financial markets as generations pass. Is it possible that the old Israelites had enough experience with human nature and finance to plan for the financial breakups they knew would occur?

Rather than research this on my own, I am, as you can see, lazily throwing it out to the Freepers for comment. I hope someone reads this, and, for their own amusement perhaps, is tempted to disprove or bolster the idea that "Jubilee" is a remnant of generational financial crisies that have been going on since ancient times. If so, not only would that be historically interesting, but perhaps it would suggest a course of action for our own financial markets. Perhaps, in modern times, we should formalize a system by which financial contracts are ended every 50 years or so. If we must have crisis, perhaps it is better to have a brief, predictable crisis rather than a long, unpredictable crisis.

Your thoughts?

[Reverend Wright]

We have had periodic asset bubble/crash/depression episodes at about the frequency of a human lifespan since the beginning of capitalist economics.

The end of a war and the end of wartime inflation is typically the triggering event for disinflation and a financial assets boom which usually ends in a stock market crash/depression.

We are 79 years out since the 1929 crash. Only someone in their 90’s could remember how people made huge amounts of money as the market went up and up and up, and then lost it all in the crash.

One reason I don’t think this is 1929 is because the war (Iraq) is not over - so the inflationary tendency continues.

[stockpirate]

Everything has a cycle.