Total US debt has now exceeded $20 trillion for the first time ever. Meanwhile, interest rates (i.e. the cost of debt) in the US and around the globe reached the lowest levels in recorded history.
Financial Sense recently spoke with Richard Sylla, professor emeritus of economics at New York University and the co-author of A History of Interest Rates, about the unique times we are living in and why, historically speaking, we may be looking at a momentous turning point in human civilization.
History of Interest Rates
‘As long as you have some commerce…people are going to demand credit,’ Sylla said.
Silver and gold have always been prized, but coin-based currency didn’t come in until the fifth or sixth century. This ushered in a new era, Sylla noted.
This was one of the most impactful economic innovations in history, basically beginning in Asia Minor or what is today Turkey.
This state of affairs changed over the years, but we basically had a monetary system based on precious metals until the classical gold standard in the late 19th and early 20th centuries, Sylla noted.
This post was published at FinancialSense on 09/12/2017.