1621-23 Holy Roman Empire In 1621, city-states in the Holy Roman Empire began to debase currency to raise revenue for the Thirty Years' War, and debased currency of other countries as part of a war strategy The name refers to tipping scales to identify undebased coins, which were melted, mixed with baser metals, and re-issued Riots ensued, people refused to accept debased currency, and taxes were paid in debased currency Practice stopped in 1623, but economic troubles continued for years
1634-37 Netherlands Commodity from Ottoman Empire rises to over $60,000 for a single item English botanist dissects one, thinking it an unusual onion, chased by a mob, sent to jail Price collapse ends the Dutch Golden Age, sends the Netherlands into a depression
1716-20 Britain Began with a company supposedly given rights to exclusive trading with Spain's South American colonies and greatly exaggerated claims of potential profits Other IPOs were issued with exaggerated claims, including one for: 'carrying on an under- taking of great advantage; but nobody to know what it is' leading to the 1720 Bubble Act After the crash several ministers were implicated, and a proposal was even made in Parliament to place bankers in sacks full of snakes!
1716-20 France Not actually a Bubble, but a failed monetary policy John Law, and early Keynesian-style economist, set up a bank in France, and issued paper currency, based in part on gold expected to be found in France's New World Territories Many investors became incredibly wealthy, leading to the coining of the term 'millionaire' After the bust, Law escaped France dressed as a woman and spent the rest of his life as an impoverished gambler in various parts of Europe
1769 United Kingdom The East India Company installed a puppet regime (Mir Jafar), their stock soared Collapse of the textile industry, famine, discovery of mismanagement: stock fell 55% The resulting outcry in England led to attempts to reform the company, but, due to the complicated situation in England at the time, it was only in 1784, with the passage of Pitt's India Act, that reform was seriously undertaken
1772 United Kingdom and American colonies Alexander Fordyce of the banking house Neal, James, Fordyce and Down in London, fled to France to avoid debt repayment, and the resulting collapse of the firm stirred up panic Economic growth was dependent on the use of credit, which was largely based upon people’s confidence in the banks As confidence eroded, people demanded deposits and banks went bankrupt English companies demanded early payment and sought taxes on the colonies leading to the Boston Tea Party
1840s United Kingdom This bubble was the result of overexuberance toward the prospects of a disruptive innovation that was greatly overbuilt After the repeal of the Bubble Act and deregulation, exaggerated claims were made in order to raise the price of stock and companies allowed the purchase of stock on margin After the government raised interest rates, stocks plummeted and fraud was uncovered Unlike other bubbles, this one had a lasting positive effect; The industry continued to grow
1869 United States Reconstruction: Government issued debt, it was thought the greenbacks would be redeemed with gold James Fisk & Jay Gould, seeking to corner the gold market, manipulated President Grant through his brother-in-law Abel Corbin, even getting their man appointed Secretary of Treasury so he could warn them of government actions concerning gold Gould hoarded gold, price rose, Grant found out, sold government gold, prices plummeted, many were ruined
1882 France The worst crisis in the French economy in the nineteenth century The crash was triggered by the collapse of l'Union Générale which was blamed on Jews and Freemasons who supposedly plotted against banks that supported Catholic institutions Paul Gauguin, a stock broker during the crash, decided to dedicate himself to his art
Late 1880s, 1890s Brazil An economic bubble bursting during the government of Deodoro da Fonseca (1889–1891) leading to financial crisis Two Finance Ministers, adopted a policy of unrestricted credit for industrial investments, backed by an abundant issuance of money in order to encourage Brazil's industrialization These economic incentives created unbridled speculation, increased inflation, and encouraged fraudulent initial public offerings The ramifications of the bust lasted a decade
1920s United States Real estate investing became so popular, one newspaper became the heaviest in the world because of the classified ads One property rose from $1700 to $300,000 Early investors sold, a hurricane devastated a large area, prices dropped, sending the region into a depression, even though the rest of the country was experiencing incredible economic growth When depression hit the rest of the country, this region was already so bad off, they barely noticed
1920s United States A period of economic growth led to increased investing in the stock market complete with buying on margin and fraudulent companies Joe Kennedy sold his stocks when he heard shoeshine boys speculating on their investments, and assumed he was near the top of the bubble The ensuing crash not only wiped out investors, but bank accounts, because banks had put their funds in the market Former millionaires sold apples during the resulting Great Depression
1969-70 Australia Triggered by the discovery of a promising site for nickel mining, which was in high demand because of the Vietnam War, and in short supply due to a labor action, the price of Australian mining shares soared in late 1969 rose from $.80 to $280, but the stock plummetted shortly thereafter An investigation ultimately led to Australia's national companies and securities legislation
1980s Kuwait Wealth from a rise in oil prices, and a lack of companies approved to be traded publicly because of governmental fear of speculation, led to the formation of this exchange dealing in unregulated foreign stocks The exchange had a casino-like ethos in which trading was considered entertainment and post-dated checks were accepted, and many of the companies traded were fictitious When one check was turned in, and funds were not available the crash occurred instantaneously
October 19, 1987 United States Low interest rates, hostile takeovers, leveraged buyouts and merger mania fueled 5-year bull market As interest rates rose, many institutional money managers scrambled to hedge their portfolios at the same time, billions of sell orders were received within minutes Largest one-day market crash in history with market losing 22.6% or $500 billion Markets recovered fairly quickly from the worst one day stock market crash
1980s Japan Financial business conglomerates known as zaibatsu “financial clique”, evolved into keiretsu business conglomerates centered around a bank, made up of many different companies, purchasing each others stock, and receiving governmental support leading to crony capitalism known as 'Japan Inc.' Market capitalization was 1/3 of world total Real Estate prices soared: 350x more expensive than NYC 20 years after the crash, market still 75% off high, real estate down 90%
1995 United Kingdom & Singapore One rogue trader bankrupted the bank that financed the Napoleonic Wars, Louisiana Purchase and Erie Canal Nick Leeson, a rising star, was promoted to Singapore to manage low risk investments, but secretly engaged in speculation in Nikkei 225 futures The market plummeted, losses in his secret account mounted His reputation soared, because his other accounts posted gains In the end, there were $1.4 billion in losses, Leeson was arrested, the bank was sold for £1
2000-02 United States During the bull market following the 1987 crash, personal computers and the internet became pervasive; Microsoft, AOL, and EBay led the way, but even companies that had never made a profit saw their stocks soar; Silicon Valley secretaries were worth millions Eventually NASDAQ dropped from a peak at 5000 to bottom out at 800 Recession followed: Federal Reserve repeatedly cut interest rates to stop the bleeding
2001-06 United States Deregulation and governmental pressure on banks to make sub-prime loans helped fuel a rise in property values. Subsequent decline of prices contributed to the 2007-09 recession
2010 Europe Standard & Poor's downgrades Greece's sovereign credit rating to junk four days after the activation of a €45-billion EU–IMF bailout, triggering the decline of stock markets worldwide and of the Euro's value
2010 United States Market plunged about 9% most within minutes, only to recover a large part of the loss It was the second largest point swing, at 1,010.14 points, and the biggest one- day point decline, 998.5 points, on an intraday basis in the markets history Causes are still disputed, but it seems to have been due to automated trades
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