From Dutch Tulips to Internet Stocks, How to Spot a Financial Bubble

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Do Bitcoin, NFTs and SPACs signal a bright new world in finance, or something else? History offers some clues about how a financial craze can spin out of control

About 300 years ago, financiers in Europe found themselves agog about the financial prospects of novel trading companies granted special rights in international commerce by the governments of France and England. The shares of these trading vehicles—England’s South Sea Company and France’s Mississippi Company—soared and then collapsed in 1720, wiping out hordes of angry investors.

Episodes like that have some economic historians wrinkling their brows about what is happening in financial markets today, with Wall Street once again in the embrace of perplexing crazes for new investment vehicles. The price of bitcoin, the cryptocurrency, has risen more than sixfold in the past year. Meantime, shell companies called special-purpose acquisition companies—also known as SPACs, which list on a stock exchange and then buy target companies—have raised more than $100 billion this year, according to Dealogic. Investors are also clamoring for nonfungible tokens, digital certificates to online collector’s items, like art or autographs.

 

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Financial bubbles often begin with innovation Interested in universal cycles? My paper 'The present crisis, a pattern' Hypothesis that coming crisis can be explained by transition theory

Well cash less? Illiquid is the crash of a company, always like this? If you have cash, you are alive, no matter how bad the idea was, your behaviour still is and where the money is coming from. Revenue, Mom the FED .. 😅🤣😅

Remember the Dutch East India Company at the time had a market cap of 7.9 trillion dollars adjusted for inflation. That's a lot of money for a country of that size and population.

95% only bad news(

Bubbles are part of the free market economy. They cannot be avoided.

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From Tulios and the begging of Trading to crypto and robinhood the collapse of trading . The biggest gambling casino online “ the stock k exchange “with no limits .

Always. They always burst.

Woof 🐶

Charles Mackay would have a field day.

It depend.

Things like Bytecoin and doggycoin will recreate the 1929 crash. IMO

Something else !!! a 'internet' game and like all games .. some are won and others lose !!! Money is important nowadays or ... love for God !!! When you have God ... you have everything !

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NET on BTC $STX

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From Dutch Tulips to Internet Stocks, Bubbles Often BurstLong before SPACs and NFTs, investors clamored for everything from exotic bulbs to Pets.com. What history shows is that an inventive corner of the financial world can turn into a mania that attracts swindlers and wipes out investors. One of the best decision I have ever made is investing on Bitcoins. Crypto investment is the future , invest on it today and smile tomorrow I invested $2000 worth bitcoins and earned $15,000 in two weeks with the help a trade coach Mr Abrantes Rene Contact me via abrantesrene This is true, when the average American cannot simply grow one’s money through earning sufficient interest in a bank, one will often resort to desperately risky measures to grow the meager savings. The premise of Breaking Bad was built on this very point. Herd Behavior Crowds, like sheep, are only as safe as the shepherds who guide them. If the shepherd is mad, so too is the crowd. Today, central bank shepherds are leading the vast majority of investors over a cliff. Stock Prices vs Stock Profits
Herkunft: WSJ - 🏆 98. / 63 Weiterlesen »

From Dutch Tulips to Internet Stocks, Bubbles Often BurstLong before SPACs and NFTs, investors clamored for everything from exotic bulbs to Pets.com. What history shows is that an inventive corner of the financial world can turn into a mania that attracts swindlers and wipes out investors. One of the best decision I have ever made is investing on Bitcoins. Crypto investment is the future , invest on it today and smile tomorrow I invested $2000 worth bitcoins and earned $15,000 in two weeks with the help a trade coach Mr Abrantes Rene Contact me via abrantesrene This is true, when the average American cannot simply grow one’s money through earning sufficient interest in a bank, one will often resort to desperately risky measures to grow the meager savings. The premise of Breaking Bad was built on this very point. Herd Behavior Crowds, like sheep, are only as safe as the shepherds who guide them. If the shepherd is mad, so too is the crowd. Today, central bank shepherds are leading the vast majority of investors over a cliff. Stock Prices vs Stock Profits
Herkunft: WSJ - 🏆 98. / 63 Weiterlesen »