August 13, 2010

USA, 1865-89: Worst 25-Years for US Deflation, Measured in Metals

The End of the US Civil War beget a record 25-Year period of deflation in the USA.  The US Price Index fell -58%. The Index of Wholesale Metal Prices (Table 100: Warren &Pearson, 1932) fell -64.6% and between July 1864 - December 1889, -70.9% (Table 40: Ibid.)

In 1889, speculators attempted to corner the market in Platinum.  The average monthly Price of Platinum had risen to $16. and neared a US record $20./oz., but the price dropped to $8.-9. immediately thereafter. 

1865: 1 Troy Ounce Platinum (manufactured, wholesale)  = USD$ 12. - 15.00
1865: 1 Troy Ounce platina (ore, retail)  = USD$ 6.

1889: 1 Troy Ounce Platinum (semi-refined, retail) = USD$ 20.
1889: 1 Troy Ounce platina (Russian ingot) = USD$ 16.


Conservatively estimating for similar products in 1865, platina & Platinum manufacturers cost about +25% more in 1889.

1865-89: Silver Fell -30%
 
1865: 1 Troy Ounce Silver = USD$ 1.3384
1889: 1 Troy Ounce Silver = USD$ 0.9351

 
1865-89: Gold Fell -53.5%

1865: 1 Troy Ounce of Gold = $ 44.44
1889: 1 Troy Ounce of Gold = $ 20.67

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