Liaquat Ahamed

speaker

238 appearances 1 recordings 1 series first heard Jul 2026 last heard 27 Jul

Liaquat Ahamed’s voice in public audio — every appearance, attributed to the second.

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Recordings per month over the last 12 months — 1 in all, peaking in Jul 2026 with 1.

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Merryn Talks Money · Are We Repeating the Biggest Mistake of 1873? · 27 Jul 2026 podcast

That causes every bank in Europe to panic and dump their silver, which causes silver prices to go down even further.

One of the two safe assets that everyone had relied on, which was silver, suddenly is plunging in price.

So they all scrambled into gold.

Now, if everyone in the world is scrambling into gold, what does it cause?

It causes a giant shortage of liquidity.

So the world might have been able to cope with a shift from a system based on both silver and gold into gold under normal circumstances.

But trying to do it in the middle of a financial crisis just didn't work.

So as a consequence, you got this tightening of credit.

Prices, wholesale prices in 1873 over the following year declined by 30%.

The worst thing was they kept going because there was this shortage of gold and no one wanted to, everyone wanted to get out of silver.

And you've got a 20 year period where prices declined relentlessly for 20 years, ending up 40 to 50% below where they started.

Exactly.

Central banks didn't really have discretion at the time.

So the thing that determined what central banks could do was the amount of gold they could find.

Ironically, when everyone moved to gold,

There was a gold drought and there were very few discoveries of gold from 1870 until 1890.

And the problem with deflation to a generation used to rising prices, it sounds pretty good if we could get falling prices, but it causes terrible problems for people who borrowed money.

Yeah, if you have a mortgage, you suddenly discover that your house is worth less, but your mortgage just continues to weigh on you.

And there's nothing that damages confidence more than having this overhang of debts that keeps on rising.

Yeah, and to Downton Abbey.

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