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Confederate Inflation

Very interesting historical note from David Beckworth about the monetary systems during the Civil War. Here’s a chart showing the value of confederate dollars, which tended to fall both because of excessive monetary inflation and because of growing doubts that the country issuing the notes would continue to exist:

One interesting thing you can do with this data is look at 1864 as a proxy of market expectations of Lincoln’s re-election. In the absence of polling, we’re normally left with conjecture as to the state of this campaign and when sentiment turned in his favor, but with the currency data we can spot the turning point quite precisely.

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