Hrag Vartanian

Hogarthian image of the “South Sea Bubble”, by Edward Matthew Ward, Tate Gallery (via Wiki)

Monetary “bubbles” are endemic throughout history. Not only was there the Tulipmania of the 1630s but something I had never heard of called the South Sea Bubble…via Jake Dobkin’s Twitterfeed:

[Sir] Isaac Newton lost more than £16,000 speculating in the South Sea Bubble of 1720. Smart people can act stupid. http://tinyurl.com/cjhxwz

What was the South Sea Bubble you ask?

The South Sea Company was a British joint stock company that traded in South America during the 18th century. Founded in 1711, the company was granted a monopoly to trade in Spain’s South American colonies as part of a treaty during the War of Spanish Succession. In return, the company assumed the national debt England had incurred during the war. Speculation in the company’s stock led to a great economic bubble known as the South Sea Bubble in 1720, which caused financial ruin for many. In spite of this it was restructured and continued to operate for more than a century after the Bubble.