Into a Distant Mirror: the 1870s

On October 16th, 2010, the front page of the Wall Street Journal (WSJ) carried a story entitled, “Flashback to 1870 as Cotton Hits Peak” (Cancryn and Cui, 2010). The article noted that cotton prices had not been this high since at least 1870. Since this WSJ µ article was published, cotton prices have continued to reach new highs. If one looks into the distant mirror of the 1870s, one can spot other parallels to our current circumstances beyond the similarly explosive cotton price rally. As a result, one can find some very interesting, and potentially useful, historical lessons to draw on from that era.