History 2186A/B Lecture Notes - Lecture 4: Precious Metal, Copper Riot, Currency Crisis
10 Oct 2016
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Financial panics from the tulip mania to the global meltdown. Financial panics: currency crises, the bank run, bubbles, crashes. A broker demands that an investor deposit further cash or securities to cover possible losses; Maintenance margin is a limit determined in advance; margin calls occur when your account does not meet the minimum maintenance amount; They can sell your investments, etc. to make up the margin internally. Many margin calls = failing market = more margin calls = financial catastrophe: currency crises: Currency suddenly becomes valueless or of a lower value. In the early days, coinage-(cid:448)alues did(cid:374)"t (cid:272)hange very much; the face value of the coin reflected the value of the metal the coin was made up of. Clipping shaving the edges of a coin, savings the clippings, and melting them to make new coins; this practice becomes common in societies that used precious metal coins.
