Global Economic Intersection
Advertisement
  • Home
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
  • Home
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
Global Economic Intersection
No Result
View All Result

Crisis Chronicles: The Hamburg Crisis of 1799 and How Extreme Winter Weather Still Disrupts the Economy

admin by admin
August 8, 2014
in Uncategorized
0
0
SHARES
1
VIEWS
Share on FacebookShare on Twitter

by James Narron, David Skeie, and Don Morgan – Liberty Street Economics, Federal Reserve Bank of New York

With intermittent war raging across much of Western Europe near the end of the eighteenth century, by about 1795, Hamburg had replaced Amsterdam as an important hub for commodities trade. And from 1795 to 1799, Hamburg boomed. Prices for goods increased, the harbor was full, and warehouses were bulging. But when a harsh winter iced over the harbor, excess demand and speculation drove up prices. By spring, demand proved lower than supply, and prices started falling, credit tightened, and the decline in prices accelerated. So when a ship bound for Hamburg laden with gold sunk off the coast, an act meant to avert a crisis failed to do so. In this issue of Crisis Chronicles, we use some diverse sources from the American Machinist and Mary Lindemann’s Patriots and Paupers to explore the Hamburg crisis of 1799 and describe how harsh winter weather still impacts the economy today.

Hamburg Booms and Busts

The occupation of Holland by France in 1795 triggered a sudden shift in the continental trade from Amsterdam to Hamburg. So as commodities flowed from the Americas and West Indies, Hamburg served as the new gateway to Europe. But the sudden shift of activity to Hamburg was accompanied by speculation, a rise in prices, and an expansion of credit. Cheap housing was replaced with warehouses, rents increased, and merchants reaped the profits from a war-torn Europe. But the summer of 1798 was dry, and the autumn wheat harvest was poor. And the winter of 1798-99 was one of harshest on record, setting in early, immobilizing ships, and hampering the transfer of goods from ship to shore.

As speculation further drove up prices, consumption decreased, and by spring, supply greatly outstripped demand and prices fell. Bills of exchange, which had previously expanded, now contracted, sales fell, and prices plummeted. By August 1799, the crisis had begun in earnest with Hamburg in the grips of a violent commercial contraction.

Sinking of the HMS Lutine Furthers Financial Crisis

In response to the severe liquidity strains, England agreed to ship about 1.2 million pounds in specie to Hamburg aboard the frigate HMS Lutine to help avert the crisis. But on October 9, 1799, the Lutine sank in a gale off the coast of Holland, leaving just one survivor. The seas were so rough in the following weeks and months that the specie coin could not be recovered, and the crisis continued unabated. Between August and November, eighty-two banking houses failed and more than 150 firms were declared insolvent, with the crisis spreading to other trade centers like Bremen and Frankfurt. While the crisis was shocking in the short term, there were few lasting problems.

The Lutine’s cargo was insured by Lloyd’s of London, and while Lloyd’s found some of the Lutine’s gold and its bell in the 1850s, the bulk of the treasure still lies buried off the coast. Today, the Lutine’s bell can be found at Lloyd’s headquarters in London, where it is occasionally used for ceremonial purposes.

Extreme Winter Weather Causes Widespread Disruption for U.S. Economy

In April, the U.S. Department of Commerce’s Bureau of Economic Analysis estimated 2014:Q1 GDP growth of 0.1 percent, then later revised that estimate to a nearly 3 percent contraction, down from an increase of 2.6 percent in the previous quarter. But rather than signaling a persistent downturn in the U.S. economy, most economists expect the decline to be transitory and attribute it to the extreme winter weather that blanketed much of the country from early December to mid-March. This was the first contraction of the U.S. economy since 2011:Q1, but the contraction was more severe than the last. Corporate profits fell almost 15 percent, and exports fell nearly 10 percent.

Contending with storms such as the polar vortex that struck much of the eastern half of the country in early January 2014, many factories in the Midwest, Northeast, and Southeast were closed, transportation links were frozen, and inventories were decreased.

2013-14-Winter-Storms

But severe winter weather is only part of the story. Some estimates put the impact of the winter weather at about 1.5 percent of the 2.9 percent contraction. San Francisco Fed Research Advisor Rob Valletta notes in aFed Views article that the decline may be transitory. But while some of the remaining factors, such as consumer spending, have rebounded, the housing recovery remains a concern. Our colleagues at the Cleveland Fed have conducted research that suggests that, in addition to the increase in mortgage rates and some tightening of lending standards, the severe winter weather affected residential investment as well. They also suggest that a return to normal weather should allow for some rebound in residential investment.

So the next time harsh winter weather sets in, whether it’s in Hamburg or Pittsburgh, remember that it might impact the local or regional economy. But tell us what you think. How much are the winter storms to blame for the contraction in the first quarter? As 2014:Q2 GDP growth estimates are also being revised somewhat downward recently, is the underlying economy lagging or are we rebounding from the harsh winter weather?

Disclaimer

The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Source: http://libertystreeteconomics.newyorkfed.org/2014/08/crisis-chronicles-the-hamburg-crisis-of-1799-and-how-extreme-winter-weather-still-disrupts-the-econo.html#.U-SyzvldUSg


About the Authors

Narron_jamesJames Narron is a senior vice president and cash product manager at the Federal Reserve Bank of San Francisco.

Skeie_davidAt the time this post was written, David Skeie was a senior financial economist in the Federal Reserve Bank of New York’s Research and Statistics Group. He is now an assistant professor of finance at Mays Business School, Texas A&M University.

Morgan_donaldDon Morgan is an assistant vice president in the Bank’s Research and Statistics Group.

Previous Post

Wholesale Sales and Inventories Mixed in June 2014

Next Post

Charges Against N.Y. Based Brokerage Firm and Founder Despite Attempts to Mislead Examiners

Related Posts

Bitcoin Whales Invest Aggressively As Small Holders Divest
Economics

Bitcoin Whales Invest Aggressively As Small Holders Divest

by John Wanguba
June 7, 2023
Why Is The SEC Suing Binance?
Business

Why Is The SEC Suing Binance?

by John Wanguba
June 6, 2023
Bitcoin Has Been ‘Killed’ 474 Times But Its Still Alive And Kicking
Economics

Bitcoin Has Been ‘Killed’ 474 Times But Its Still Alive And Kicking

by John Wanguba
June 5, 2023
Japanese Regulators Issue Stern Warning To OpenAI For Data Collection
Business

Japanese Regulators Issue Stern Warning To OpenAI For Data Collection

by John Wanguba
June 5, 2023
What Are BRC-30 Tokens?
Econ Intersect News

What Are BRC-30 Tokens?

by John Wanguba
June 2, 2023
Next Post

Charges Against N.Y. Based Brokerage Firm and Founder Despite Attempts to Mislead Examiners

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Browse by Category

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Browse by Tags

adoption altcoins bank banking banks Binance Bitcoin Bitcoin adoption Bitcoin market blockchain BTC business China crypto crypto adoption cryptocurrency crypto exchange crypto market crypto regulation decentralized finance DeFi Elon Musk ETH Ethereum Europe Federal Reserve finance FTX inflation investment market analysis Metaverse NFT nonfungible tokens oil market price analysis recession regulation Russia stock market technology Tesla the UK the US Twitter

Archives

  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • August 2010
  • August 2009

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized
Global Economic Intersection

After nearly 11 years of 24/7/365 operation, Global Economic Intersection co-founders Steven Hansen and John Lounsbury are retiring. The new owner, a global media company in London, is in the process of completing the set-up of Global Economic Intersection files in their system and publishing platform. The official website ownership transfer took place on 24 August.

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Recent Posts

  • Bitcoin Whales Invest Aggressively As Small Holders Divest
  • Why Is The SEC Suing Binance?
  • Bitcoin Has Been ‘Killed’ 474 Times But Its Still Alive And Kicking

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.

No Result
View All Result
  • Home
  • Contact Us
  • Bitcoin Robot
    • Bitcoin Profit
    • Bitcoin Code
    • Quantum AI
    • eKrona Cryptocurrency
    • Bitcoin Up
    • Bitcoin Prime
    • Yuan Pay Group
    • Immediate Profit
    • BitIQ
    • Bitcoin Loophole
    • Crypto Boom
    • Bitcoin Era
    • Bitcoin Treasure
    • Bitcoin Lucro
    • Bitcoin System
    • Oil Profit
    • The News Spy
    • British Bitcoin Profit
    • Bitcoin Trader
  • Bitcoin Reddit

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.

en English
ar Arabicbg Bulgarianda Danishnl Dutchen Englishfi Finnishfr Frenchde Germanel Greekit Italianja Japaneselv Latvianno Norwegianpl Polishpt Portuguesero Romanianes Spanishsv Swedish