This exclusive event was made possible by T. Rowe Price.

As the world continues to struggle to find its footing amid rising unemployment, constricted credit and crumbling banks and industries — raising questions about how the economic system collapsed — PBS presents Niall Ferguson’s ASCENT OF MONEY. This groundbreaking four-part series examines the creation of the economic system by taking viewers on a global trek through the history of money. (An abbreviated version of the documentary, which focused on the current economic crisis at the advent of the Obama administration, aired in January; it can be streamed in full on the Website.) The four-hour version delves deeper into how the complex system of global finance evolved over the centuries, how money has shaped the course of human affairs and how the mechanics of this economic system work to create seemingly unlimited wealth — or catastrophic loss.

ASCENT OF MONEY is based on Ferguson’s best-selling book The Ascent of Money: A Financial History of the World, which predicted the current economic crisis and was released within weeks of the meltdown of sub-prime loans.

Said Ferguson, “In the midst of a major economic depression, it is often hard to appreciate the historical precedents and truly understand that while a situation may look dire, our system of finance, banking and trade has allowed for unprecedented progress. I’m hopeful the film will allow viewers to better understand the on-going evolution of our financial system and how our economy remains extraordinarily viable even as we are grappling with a crisis of historic proportions.”

For millions of people, the recession has generated a thirst for knowledge about how our global economic system really works, especially when so many financial experts seem to be equally baffled. In ASCENT OF MONEY, economist, author and historian Ferguson offers insight into these questions by taking viewers step-by-step through the milestones of the financial history that created this system, visiting the locations where key events took place and poring over actual ledgers and documents — such as the first publicly traded share of a company — that would change human history. Ferguson maintains that the history of money is indeed at the core of our human history, with economic strength determining political dominance, wars fought to create wealth and individual financial barons determining the fates of millions.

Among the places Ferguson visits are Bolivia, where Spain established vast gold and silver mines — still in operation — and enslaved the indigenous people to create so much currency for the Spanish crown that it eventually became worthless; Italy, where the Medici family transformed the sinful practice of usury into the banking system we know today and in the process became as powerful as monarchs; Paris, where Scotsman John Law created a Ponzi scheme tied to the Louisiana territory that brought France to its knees; London, where bonds trader Nathan Rothschild and his family nearly went bankrupt by helping to finance the British army’s war against Napoleon, then achieved enormous wealth through the buying and selling of war bonds; Scotland, where two ministers established the first life insurance fund, and New Orleans, where the shortcomings of their calculations would be demonstrated to tragic effect in the wake of Hurricane Katrina; and New York, where Ferguson interviews financial wizard George Soros about the concept he introduced of short selling derivatives based on a prediction that they will lose value.

Through this history, viewers learn economic fundamentals that inform the meanings of sub-prime mortgages and credit default swaps and an understanding how the Chinese economy has risen to dominate the world.

The viewer questioned both how Niall had calculated the annual rate of inflation to be 12,000 percent and how, if the monthly inflation rate was 100 percent, the dinner would cost 60,000 Australes in July.
We contacted Niall to find out how he arrived at those numbers. He clarified the calculation for us, acknowledging that although he discusses the annual inflation rate, he in fact uses the monthly consumer price index rather than the annual inflation rate to calculate the price of the dinner.

The consumer price index in Argentina in June 1989 was 2.14 and in July, it was 6.36. Multiplying 10,000 Australes (the cost of the meal in May) by 2.14, the cost of the meal in June would be 21,400 Australes. Niall estimated 20,000 Australes.

For July, 10,000 Australes would be multiplied by 6.36, bringing the cost of the meal up to 63,600 Australes, or approximately 60,000 Australes, as he states in the film.

Here is precisely what he had to say:

…I got it wrong — well, half-wrong.
The exact figures for June 1989 were in fact a monthly rate of 114% and an
annual rate of 1,472%, so the viewer is right on point one. I should have
said:

“By June 1989 inflation in Argentina had reached a monthly rate of OVER one
hundred percent. An annual rate of roughly ONE THOUSAND FIVE HUNDRED
percent.”

However, the index numbers for May, June and July are 1, 2.14 and 6.36, so
the figures for the price of dinner are correct.

I well remember having to get those figures on location via a BlackBerry
because we decided on the spur of the moment to make the point about
inflation more concrete. But we should have spotted the error and corrected
it…

…”To err is human, to forgive divine.”

Best wishes,
Niall.

We appreciate the viewer’s feedback and attention to detail.