Chart Of The Day: 803 Years Of Global Inflation

Tyler Durden's picture

Spot the point in this 803 year timeline of world inflation, when the Fed was created.

The chart above comes courtesy of Jim Reid's fantastic "Journey into the Unknown" which we will dissect in much more detail shortly. For now we wanted to bring our readers attention to what is arguably the most important aspect of modern monetary times: the advent of persistent inflation, and the disappearance of deflation.

Figure 18 shows median global inflation first from 1209 (left) and then from 1900 (right). As we’ve discussed in previous notes inflation took on a totally different persona after the start of the twentieth century. The charts are again on a log scale to allow us to easily see the near exponential increase in inflation over the last 100 years or so, especially relative to what occurred before. Note that had we used average instead of median, the chart would look almost absurd given the extreme levels of hyperinflation seen in several  countries over the last century. The data behind the graph is based on a full set of 24 countries where we have inflation data back to 19001. Prior to this many countries have data that goes back several decades with some back through the centuries. We have  included data as and when it becomes available.


It’s not just the general trend of higher prices, it’s the fact that even single years of deflation have been increasingly hard to find globally over the last century. Figure 20 shows the same data set as used above but shows the median YoY inflation back to 1209 (left) and over the shorter period since 1800 (right).



Prior to the twentieth century years of deflation were almost as common as years of inflation. However as discussed above, this all changed over the last 100 years or so. Indeed we haven’t seen a year of deflation on this median Global YoY measure since 1933. So we’ve now had nearly 80 years without a global year on year fall in prices.


Figure 21 extends this analysis showing the percentage of countries in our sample with a negative YoY inflation print and the total number of countries in our sample each year. The number of countries in annual deflation has certainly fallen over the last 100 years and particularly since the Gold Standard link was broken in 1971. Indeed since 1987 no more than 2 countries (out of the maximum 24 in our sample) have seen deflation in any one year and in most cases one of these two countries was Japan.



So although the last 30 years has been a period where inflation was perceived to be under control across the globe, there has generally been a persistent positive bias not seen through longer-term history. The break with Gold has ensured that countries can mostly ensure they don’t have deflation by being free to conduct money creation policies.



Although the hyperinflation list perhaps isn’t 100% inclusive, the trend is absolutely beyond dispute. The 1980s and 1990s saw the vast majority of the examples of these occurrences through history. Although all these have been outside of the developed world, this region has also seen many countries with high inflation over the period and with wide divergence between countries.

Much more coming: in terms of both Reid's report, and inflation.

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Aziz's picture

Price stability, bitchez.

HoofHearted's picture

Gold and silver, bitchez and Elmo.

gold-is-not-dead's picture

It's for your own good god damn it, stimulus package is good, repeat, GOOD!!!


Sheeple: Yes, gooooood...

i-dog's picture

Yummm ... stimulus taste good ... Money for nothing and chicks for free!

GetZeeGold's picture



803 years? Screw it........I QUIT!!!


LawsofPhysics's picture

803 years of stealing the value of productive labor to enrich a relative few paper-pushing fucks.  Who is John Gault and where the fuck is John Corzine?  Nothing changes until the moral hazard is addressed.  I suspect (as history shows over and over) that supply lines for essentially goods and commodities will crack first, then shit gets real.  Same as it ever was.

hardcleareye's picture

"The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained growth and recovery."

Jesse's Cafe Americain

gold-is-not-dead's picture

I've read the scripts from before the mentioned period.

Did you know that they actually impaled and burned anyone who tried to use anything but gold and silver as money those days? (cloth and zinc for instance)

RockyRacoon's picture

Forcing the use of PMs to settle debt or as savings is just as wrong as forcing the populace to use fiat money.  It's all about freedom in trade.  The concept is lost on TPTB in either case.

UGrev's picture

If there is to be any gov't, taxes must be collected at some point. The only way to do that is to have a common money. Free trade will have to accomodate the ability to be taxed with a common money system. If you can come up with a way to identify a common denomination in which all trades could be boiled down to, then have it! Free Trade for everyone. Otherwise.. free trade will not happen. 

Buckaroo Banzai's picture

"If there is to be any gov't..."

Yeah, I'm gonna challenge your assumption there.

Revert_Back_to_1792_Act's picture

It is supposed to be a 'limited' government.


Michael's picture

9/11 caused a war on Iraq and a war on Afghanistan that the American people, not involved in it, had to pay for in many ways.

I want the people who were responsible for this brought to JUSTICE!

I want REVENGE, on the real perpetrators, within the RULE OF LAW!

9/11: Explosive Evidence - Experts Speak Out, Full-length, Pre-Release-v1.3; Low-Res.

Popo's picture

So according to the chart above there was sustained global deflation betwen 1920 and 1936???  I did not know that.

old naughty's picture

"Spot the point..."

What's the point?

They fxxked us up already.

Revert_Back_to_1792_Act's picture

You'll probably never see this goes.

more like 1913 and 1933.

The Fed printed notes against the circulating gold coin in the USA.

These notes were redeemed by other nations and the gold taken out of the country.

This encumbered and removed real value from circulation and even eventually encumbered bank deposits.

By 1933, so much money (coin) had been removed that it caused a depression.  It literally cut the nations real money supply in half while flooding with paper money.

When the people went to the banks to try and redeem thier notes for the real stuff, there was nothing there or the deposits were all owed to foreign nations.

If you don't read anything else, read this.  This guy was a banker before he became a Senator.

That is the whole deal of the Fed.  Banks used to have to issue their notes against what they had in their own vaults!

We also had legit United States Notes that were printed against our circulating coin.

They printed their notes against our circulating gold and silver coins (commonwealth)..not their coins.

It had the net effect of taking public property (circulation coin) for private use!

Find an image of a series 1913 Federal Reserve Note online and read the fine print on the back of the Note.

1913-1933 the gold coin was encumbered and taken away..1933-1964 the silver coin..1965-now the land and the people are being used as collateral.

It is such a simple thing to understand once you see it.

It is why you see such decay and destruction in America all around us.

It is why there are so many people hurting and oppressed under the weight of the debt.

Read the book in my profile and read this opinion by Thomas Jefferson.  It shows how money can be alienated away from the true owners.



UGrev's picture

"Any" is not a qualifier in size. It simply means "some amount" of gov't and it is necessary to some degree. Anarchy doesn't seem to work so well, nor does an overbearing gov't. Your challenge is accepted. 

RockyRacoon's picture

Yeah... if.  You are espousing the exact problem that many of us here (I think I can safely speak for more than a handful) are advocating against.  Taxation is doable in many forms, as are the forms of payment.  Once the reason and purpose of taxes are outlined and agreed upon, then we can discuss how they are to be paid.  Don't get the cart before the horse.

UGrev's picture

If you're suggesting that I'm suggesting income taxation, then you lose, sir. In fact, I'm a firm believer that we can return to a time when we didn't have income taxation. Taxing goods and services is a good place to start. 

cranky-old-geezer's picture



The only way to do that is to have a common money.

We did have a common money.  Gold and silver. 

Go read the constitution.

UGrev's picture

I was arguing for this point, but you must not have read my post's "In between the lines" parts. Please re-read my post and you'll notice that I was arguing AGAINST the total free trade and for PM's. I'm well aware of what "COIN" means. Thanks though. 

Davalicious's picture

"If there is to be any gov't, taxes must be collected at some point. The only way to do that is to have a common money"

Here is a thought, let money systems compete and let government allow settlement of taxes in a variety of money systems. You get to pay one chicken into the system, 1 oz of gold, 30 pcs of silver, 5 bitcoins. Let gubmint create their own Bullshit Bills (BB) for payment demands and tell you how much that will be in all of the above at a daily, or whatever, exchange rate. The gov can adjust those depending on what currencies it needs to conduct business from moment to monent.



UGrev's picture

I suspect the gov't would eventually say that it takes too much effort to sustain a system like that and insist on more taxation to pay for it. Circular reference time. 

Backspin's picture

Isaac Newton, when he was Master of the Mint in his later years, had people drawn and quartered for counterfeiting.

trailing's picture

It might be interesting to overlay that very first chart with a chart of the availability of cheap energy. Spikes at coal and engines, and again when oil becomes widely used. Otherwise, growth moves pretty slowly, it seems.

Diogenes's picture

"Isaac Newton, when he was Master of the Mint in his later years, had people drawn and quartered for counterfeiting."


Now they are drawn and quoted (see cover of Time )

Davalicious's picture

Typically the penalty was burning at the stake.

Lets do holocaust science and see if Jews like Ben Bernanke, Alan Greenspam and Timmeh G. burn as well as they have to for six million to have gone up the chimney during WW2.

LMAOLORI's picture



+1 but that is not happening and why would anyone junk your comment can't handle the truth I guess

CONVICTED: Bush 1300+, Clinton 1000+, Obama 0.0 (+/-)

The case against Lehman Brothers

Totentänzerlied's picture

So you're saying that at no point in the past 8 centuries has moral hazard properly been addressed in whatever manner you consider satisfactory? How's that "rule of law" thing working out for you????????

OpenThePodBayDoorHAL's picture

"Inflation targeting", one of the entire mandates of the Fed, is 100% wrong and repressive at its very core. Until people understand this we are screwed. I guess that means we are screwed.

MsCreant's picture

"supply lines for essentially goods and commodities will crack first"

You'd almost think someone needs to mess with sumptin, or sumptin.

I agree.

Daily Bail's picture

In the immortal words of WalStreetPro, Tim Geithner is a worthless piece of maggot shit.

New story:

REPORT: Geithner Dumping TARP Bank Shares At Below Market Prices To Make Obama More Appealing To Voters
Stock Tips Investment's picture

I think inflation is not currently a major problem in the global economy. There is concern that bailouts of major countries can generate high inflation. Obviously, this is an ongoing risk. But there are many examples in the economic history of the world in which these processes could be controlled. I am of the opinion that there are far more pressing problems.

LMAOLORI's picture



Do you go to the grocery store?  Have you seen the food inflation riots?  We have inflation on all the things you actually need to live already. 

Higher grocery bills knock American families lower

Diplodicus Rex's picture

Try telling that to the Egyptians (and those in many other countries) who spend 40% of their annual income on food and energy that inflation is not a major problem. You live in the cosetted west where food and energy amount to approximately 7% of your annual income. A 10% rise for either party represents a disproportionate effect for those whome food and energy represent a higher proportion of their annual income.

Ahmeexnal's picture

The irony of it all is that while Egypt is still suffering from massive near hyper-inflation and has gone through a faux revolution, the "fearless leaders " of that country believe it's more important to buy submarines from germany that to feed the starving population.
One day people are going to wake up and it's going to get veeeeeeeeery ugly in "das vaterland".

Michael's picture

Is Egypt's money backed by gold? Well then there's your answer.

Taint Boil's picture



Try telling that to the Egyptians (and those in many other countries).........



Well if you lived in Libya you would have had all of this:


1. There were no electricity charges in Libya; electricity is free for all its citizens.

2. There is no interest on loans, banks in Libya are state-owned and loans given to all its citizens at 0% interest by law.

3. Home considered a human right in Libya -- Gaddafi vowed that his parents would not get a house until everyone in Libya had a home. Gaddafi's father has died while his wife and his mother are still living in a tent.

4. All newlyweds in Libya receive $60,000 Dinar (US$ 50,000 ) by the government to buy their first apartment so to help start up the family.

5. Education and medical treatments are free in Libya. Before Gaddafi only 25% of Libyans are literate. Today the figure is 83%.

6. Should Libyans want to take up farming career, they would receive farming land, a farming house, equipments, seeds and livestock to kick- start their farms -- all for free.

7. If Libyans cannot find the education or medical facilities they need in Libya, the government funds them to go abroad for it -- not only free but they get US $2, 300/mth accommodation and car allowance.

8. In Libya, if a Libyan buys a car, the government subsidized 50% of the price.

9. The price of petrol in Libya is $0. 14 per liter.

10. Libya had no external debt and its reserves amounted to $150 billion.

11. If a Libyan is unable to get employment after graduation the state would pay the average salary of the profession as if he or she is employed until employment is found.

12. A portion of Libyan oil sale is, credited directly to the bank accounts of all Libyan citizens.

13. A mother who gave birth to a child receive US $5 ,000

14. 40 loaves of bread in Libya costs $ 0.15

15. 25% of Libyans have a university degree

16. Gaddafi carried out the world's largest irrigation project, known as the Great Man-Made River project, to make water readily available throughout the desert country.


Too many sources to give credit [not mine] but even if only ½ are true……

natty light's picture

The Great Man-made River

Look at Google Earth and you will see green growth various places in all parts of Libya.

Taint Boil's picture





Well that was before we “saved” the people from Muammar Gaddafi, I wonder how it is now. The first thing the “rebels” did was to start a bank – go figure … I wonder if they are still charging 0% interest for the people.

piceridu's picture

What happened to Mr. Gaddafi, many speculate the real reason he was ousted was that he was planning an all-African currency for conducting trade. The same thing happened to him that happened to Saddam because the US doesn’t want any solid competing currency out there vs the dollar. You know Gaddafi was talking about a gold dinar.


Don't f with the dollar as the world settlement currency or you get a ICBM up your A

divide_by_zero's picture

Go investigate Soros and his OSI involvement (with some Rothschild for good measure) before they were "revolutioned" with help from Soros' WH Nobel laureate

Wilderman's picture

Must be why he was gutted in the street; who could propose such things? 


From that example, it's obvious that giving the people all they could want is fruitless.  Nothing has worth to a man 'cept that which he has earned. 

Wilderman's picture

Must be why he was gutted in the street; who could propose such things? 


From that example, it's obvious that giving the people all they could want is fruitless.  Nothing has worth to a man 'cept that which he has earned. 

Wilderman's picture

Must be why he was gutted in the street; who could propose such things? 


From that example, it's obvious that giving the people all they could want is fruitless.  Nothing has worth to a man 'cept that which he has earned. 

Diggintunnels's picture

When did the Bernake start trolling under the handle of "Stock Tips Inve..."