"Bubbles", or repeating history, because we are doomed...
A particular company gained a monopoly on a particular trade. Stock prices soared, shareholders were well paid. In its rising prosperity and popularity, the company hatched a plan to privatize national debt, assuming its country's obligations in exchange for annual payment... and encouraging creditors to take stock in the company in exchange for debts. The stock skyrocketed, increasing tenfold in less than a year. The company talked up their game, spreading their own rumors, increasing their own value, even buying their own stock, via agents, to drive up their own price. Everyone invested in the company. Everyone was sucked in, and many entities tried to imitate the success.
And then, the fall. The stock price hit an amazing high, and people started to sell. And sell. And as the price dropped, more selling. The company had begun to lend money to people so that people could buy the company's shares, so as the price dropped, all that some people could do to pay their debt was to sell, sell, sell. The stock lost 90% of its value in a couple of months. The imitation bubble companies in other countries began to collapse as liquidity became more and more of a problem.
Financial ruin visited one of the most powerful countries in the world, and wreaked havoc in other powerful nations. Banks teetered on collapse. Individuals of all walks of life were bankrupted.
The company at the root of the collapse? The South Sea Company. The country left reeling? The British Empire.
The year?
1720.
And then, the fall. The stock price hit an amazing high, and people started to sell. And sell. And as the price dropped, more selling. The company had begun to lend money to people so that people could buy the company's shares, so as the price dropped, all that some people could do to pay their debt was to sell, sell, sell. The stock lost 90% of its value in a couple of months. The imitation bubble companies in other countries began to collapse as liquidity became more and more of a problem.
Financial ruin visited one of the most powerful countries in the world, and wreaked havoc in other powerful nations. Banks teetered on collapse. Individuals of all walks of life were bankrupted.
The company at the root of the collapse? The South Sea Company. The country left reeling? The British Empire.
The year?
1720.