The country is the United States of America; the time, the late 19th Century.
Mark Twain calls it the “Gilded Age,” a mad race for riches by Robber Barons, unscrupulous speculators, and corporate millionaires.
But most economic historians see it in a different light: Unshackled from onerous government interference, it’s also the period when modern Corporate America comes of age; when tycoons build the country’s railroads; inventors help launch the first mass communication network; and the entire population helps transform an agricultural economy into an urban, industrial nation.
Before 1860, 36,000 patents are granted. In the next 30 years, the number of new patents mushrooms to 440,000.
One of those is Alexander Graham Bell’s new telephone, first exhibited in 1876. Within 50 years, 16 million units are installed, accelerating the pace of social and economic life many times over.
Three other patents multiply the efficiency and growth of business: The typewriter (1868), the adding machine (1888), and the cash register (1897).
The linotype composing machine (1886) — along with the rotary press and paper-folding machines — suddenly make it possible to print 240,000 eight-page newspapers in less than an hour.
Thomas Edison’s incandescent lamp eventually lights up millions of homes.
Thanks to the talking machine (phonograph) perfected by Edison … and then the motion picture, which he develops with George Eastman, there are suddenly 10,000 movie theatres across the nation where there have been none before.
The inventions that transform industry are even more dramatic: Steam-powered manufacturing and trains. The electric motor. The internal combustion engine. Revolutionary new applications of chemistry.
And Big Steel! In 1870, the U.S. steel industry produces 68,000 tons. Just twenty years later, it produces 4.2 million tons.
After the Civil War, most U.S. railroads are relatively primitive or in shambles. By 1880, the nation has 17,800 freight locomotives, carrying 23,600 tons of freight, plus 22,200 passenger locomotives. The railroads quickly become the nation’s largest industrial employers.
Urban population explodes. In 1860, only one-in-six Americans lives in communities of 8,000 people or more. In 1890, that proportion nearly doubles. Also in 1860, there is not one single city in America with a million inhabitants. But by 1890, New York has a million and a half; while Chicago, Illinois, and Philadelphia, Pennsylvania, each has over a million.
In those same three decades, the population of Philadelphia and Baltimore doubles; Kansas City and Detroit quadruples; Cleveland grows six-fold; and Chicago grows ten-fold. Minneapolis, Omaha, and many other similar communities, which are just small hamlets in 1860, grow by 50 times or more.
But this unbridled, mad dash to growth also leaves lots of collateral damage in its wake: labor exploitation, widespread poverty, frequent riots, or worse. And for the wealthy, the risks are also big: Two successive market panics and depressions — the first between 1873 and 1878, the second from 1893 to 1897.
In the final analysis, however, far more is gained than lost, especially as the Gilded Age matures with the advent of the new millennium: Between 1890 and 1929, the average urban worker puts in one less day of work a week, but brings home three times as much in pay. Meanwhile, the proportion of families confined to the drudgery of farm labor plunges in half.
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The everyday life of average Americans improves dramatically: By 1929, nine-out-of-ten have electricity and indoor plumbing. Four-fifths have automobiles. Two-thirds have radios. Nearly half have refrigerators. Infant mortality falls by two-thirds. Average life expectancy jumps by 20 years.
But among all the winners, investors and entrepreneurs are the largest by far. At the beginning of the Civil War, there are only 400 millionaires in the United States. By 1892, there are 4,047. And that’s even after the 1873-78 depression.
A New 21st Century Gilded Age?
It’s too soon to say. But with the new Trump administration, it’s possible that similar economic forces will be unleashed: Old billionaires in the White House; new billionaires in the business world. More freedom for Corporate America. New pathways to growth. A rising wave of technological innovation. And countless new millionaire investors, provided they’re in the right place at the right time.
Of course, at this mature stage in our economy’s development, there are probably more differences with the late 19th Century than similarities. So, you can’t expect the Gilded Age to repeat itself in the same way or to the same degree. Still, by shedding a lot of the government regulations that currently inhibit growth, and by opening a wider path for new technologies to replace the old, the new administration could unleash some changes that are reminiscent of that bygone era.
New Gold Law to Impact 1.6 Billion People
A new global law in effect this December could deliver an unexpected shock to the markets.
No less than 32 major central banks are scrambling to prepare for the inevitable fallout.
They’re shifting their money into one single asset that could explode in value, even as everything else plummets.
$3 TRILLION is set to change hands virtually overnight.
You must prepare now – there’s no time left to wait.
Politically speaking, you may hate the change in Washington. Or you may love it. But when it comes to your money, the only rational choice is to adapt to it. Just remember three things:
First, the threats we’ve been writing about are not going away:
- As we predicted, the European Union is coming unglued: Brexit. The fall of the pro-EU government in Italy. Soon, a similar outcome in France. Perhaps even in Germany, too.
- As we predicted, the dollar is getting ever stronger, as the global money tsunami drives still more flight capital our way.
- As we’ve warned, the cycle of war is ramping up, month-by-month, step-by-step, with some consequences that are predictable, but many that are not.
- Plus, as we’ve stressed continually, you can expect some of the greatest boom-bust cycles of all times, bringing both million-dollar profit opportunities and million-dollar risks.
Second, the 21st Century versions of the Gilded Age, or at least some aspects of that period, are already in the making:
Revolutionary transportation technologies like driverless cars and drones. Revolutionary communications technologies via billions of mobile devices. And new information processes, such as Big Data and the Internet of Things, that are transforming industry as we speak.
Most important, we will be here to guide you through thick and thin — not just via our regular Money and Markets issues, but also with a new division and Web page dedicated to helping you profit in the new Gilded Age.
Scheduled launch date: Inauguration Day, January 20, 2017.
Good luck and God bless!