The Banking Crisis Of All Time

by Martin Armstrong, Armstrong Economics:

QUESTION: Mr. Armstrong, Your knowledge and database on financial crises is really unprecedented. I googled the first banking crisis and it brought up only the Crisis of 1763, which started in Amsterdam. Yet that list published in the WSJ which showed 1683 as the first panic and the siege of Vienna was most interesting. I know you have written about the sovereign defaults on the ancient central bank in Delos. My question is, was there any major financial banking crisis between antiquity and 1683? I figured if anyone would know, he had to be you.



ANSWER: As the 13th century unfolded, the cost of endless Crusades burdened both the crowns of England and France. Throughout the remainder of the 13th century, a variety of Crusades were aimed not so much at toppling Muslim forces in the Holy Land but to combat any and all groups seen as enemies of the Christian faith. Edward began his reign in 1275 with heavy debts incurred from the Crusades.

These endless wars resulted in the time of major sovereign defaults by Edward I of England and Philip IV of France. In 1275, Edward secured a financial monopoly and negotiated a grant of export duties on wool, woolfells, and hides that brought in an average of £10,000 a year. He then used this as collateral to borrow substantially from Italian bankers granting them the security of these customs revenues to fund his endless wars of aggression.

Edward imposed heavy taxes on the value of movable goods. At the beginning of this Wave 850, Edward defaulted on his loans from the English Jewish bankers, and then as 1290 began, to cover that default he expelled all of the Jews from England and confiscate all their property.

Moreover, this was the Edward Langshakes of the movie “Brave Heart” when in 1291 he attacked Scotland. As this 8.6-year Wave 850 peaked, Edward launched his very costly war against Philip IV (1295-1314) of France which lasted until the end of this 8.6-year wave came to an end in 1297.

The Riccardi of Lucca was perhaps one of the major international merchant banking houses to emerge during the 13th century. The Riccardi established branches in Rome, Bordeaux, Paris, Flanders, London, York, and Dublin, Ireland. They engaged in trade with Edward I of England. Prior to 1272, the English kings were customers of the Italian merchant who had exotic imports as they were purchasing luxury goods and would use them to transfer money to Rome. With the outbreak of war against Philip IV in 1294, a major credit crunch and inflation erupted which impacted the entire international money markets throughout Europe at the time. The value of gold rose against silver from 10:1 to virtually 15:1, which was a monumental distortion of the European monetary system as a consequence of these endless wars.

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