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The 5,000 year history of interest rates shows just how historically low US rates are right now

Stele of Narâm-Sîn, king of AkkadWikimediaStele of Narâm-Sîn, king of Akkad, c. 2250 BC.

On Thursday, the Federal Reserve kept its benchmark interest rate target pegged to a range of 0% to 0.25%, which is where they have been since December 2008.

That’s low.

Interestingly, rates aren’t just low within the context of American history.

They also happen to be at the lowest levels in the 5,000 years of civilisation.

Bank of America Merrill Lynch’s Michael Hartnett and his team shared the following chart show just how low the current rates are, relative to other times in history, in a recent note to clients, citing a speech by Bank of England chief economist Andy Haldane:

Screen Shot 2015 09 18 at 10.12.09 AMBAML

Haldane’s list of sources for this is pretty staggering (and you can look through them all here.)

So to make things a bit clearer, we put together an annotated list of key historical episodes and the corresponding interest rate of the time, using the data from “The Trader and his Shadow“.

Check them out below:

  • Mesopotamia, c 3000 BC: 20%
  • Babylon, Code of Hammurabi, 1772 BC: codified earlier Sumerian custom of 20%.
  • Persian conquest (King Cyrus takes Babylon), 539 BC: rates of 40+%.
  • Greece, Temple at Delos, c. 500 BC: 10%
  • Rome, Twelve Tables, 443 BC: 8.33%
  • Athens/Rome: circa the first two Punic Wars, 300-200 BC: 8%
  • Rome: 1 AD: 4%
  • Rome, under Diocletian, 300 AD: 15% (estimated)
  • Byzantine Empire, under Constantine, 325 AD: limit 12.5%
  • Byzantine Empire, Code of Justinian, 528 AD: limit 8%
  • Italian cities, c. 1150: 20%
  • Venice, 1430s: 20%
  • Venice, (Leonardo da Vinci paints “The Last Supper in Milan), 1490s: 6.25%
  • Holland, beginning of the Eighty Years’ War, 1570s: 8.13%
  • England, 1700s: 9.92%
  • US, West Florida annexed by the US, 1810s: 7.64%
  • US, circa World War II, 1940s: 1.85%
  • US, Reagan administration, 1980s: 15.84%
  • US, Fed does not hike rates in September, 2015: 0-0.25%

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