Germany · France · China · U.S. · U.S. Treasury · Fortune Technology
The question Ahamed was left with after his research is how Germany and France set off a butterfly effect
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Financial crises, he said, “don’t occur in a geopolitical vacuum.” Ahamed was careful not to predict a timeline.
Key facts
- The United States itself emerged from World War II with debt exceeding 100% of GDP and grew its way out of that over 25 years
- Liaquat Ahamed’s new book, 1873, is out June 2 from Penguin Press
- Britain, after the Napoleonic Wars, carried a national debt of roughly 200% of GDP, he noted, and spent the next half-century methodically paying it down while the British Empire expanded
- He pointed to the brief, chaotic tenure of British Prime Minister Liz Truss in 2022 as a small-scale preview of what’s ahead for America
Summary
Liaquat Ahamed has spent his career studying the moments when the world’s financial system breaks down, the bad bets, the collective delusions, and the geopolitical accidents that tip economies into catastrophe. “Where we are today is frightening,” Ahamed, the Pulitzer Prize-winning author of Lords of Finance: The Bankers Who Broke the World, told Fortune in an interview. His new book, 1873: The Rothschilds, the First Great Depression, and the Making of the Modern World, examines a forgotten financial crisis that swept the United States, Central Europe, and the emerging markets of the Ottoman Empire and Egypt simultaneously deliberately targeting France’s silver reserves in a bid to destroy its economic standing. Much like Lords of Finance explained how a fixation on gold in the 1920s led to central banking mistakes that would be laughed at today, Ahamed said he was shocked to discover silver’s essential role in the epic crash of 1873, now mostly forgotten.