Banking system like the South Sea Bubble

July 2nd, 2009 by stacyherbert

Stacy Summary:  We, of course, used this analogy in our first, or was it the second, episode of On the Edge? Also, check out Hogarth’s earliest satirical sketch, “The South Sea Scheme” – it is still relevant.

Tags:   17 Comments

17 responses so far ↓

  • Max Power
    Jul 2, 2009 at 2:05 am

    I have not heard what impact the South Sea Bubble had on NZ or Australia — both were not really settled much by Europeans at the time.

    Western Australia had some fragmentary settlements relating to the remnants of the VOC, and European adventurers were known to be in NZ by 1720 — but that is about it.

    == via wikipedia ==
    The price of the stock went up over the course of a single year from about one hundred pounds a share to almost one thousand pounds per share. Its success caused a country-wide frenzy as all types of people – from peasants to lords – developed a feverish interest in investing; in South Seas primarily, but in stocks generally. Among the many companies to go public in 1720 is – famously – one that advertised itself as “a company for carrying out an undertaking of great advantage, but nobody to know what it is”.

    The price finally reached £1,000 in early August and the level of selling was such that the price started to fall, dropping back to one hundred pounds per share before the year was out, triggering bankruptcies amongst those who had bought on credit, and increasing selling, even short selling – selling borrowed shares in the hope of buying them back at a profit if the price falls.

  • Nic Abbott
    Jul 2, 2009 at 2:28 am

    So it’s bubbles again today eh? Well, it seems every bubble has a silver lining. Chinese bubbles anyone:

    I love this quote:
    ‘He (Mr Chen) was worried about whether China’s economic recovery is sustainable. “Last year the economy was 500m below sea level and now it’s 300m below. It is much better, but it is still below.” ‘

    http://www.ft.com/cms/s/0/e07916d8-6661-11de-a034-00144feabdc0.html

  • Mike2liverpool
    Jul 2, 2009 at 2:41 am

    I sense my “Thing of Beauty” may not be too far off
    :) )
    Mike

  • Mr Supergeek
    Jul 2, 2009 at 2:42 am

    Sir Isaac Newton told us why an apple falls down from the sky
    And from this fact, it’s very plain, all other objects do the same

    A brick, a bolt, a bar, a cup, invariably fall down, not up.

    :70′s uk public information film:

    Maybr ol’ Isaac learnt the laws of gravity when he lost all his money in the south sea bubble. Father of Modern Science…..and a bit of a sucker. “what goes up must come down”

  • Danny
    Jul 2, 2009 at 2:54 am

    More on Cythia McKinney and others being arrested in Israel – by Paul Craig Roberts

    http://globalresearch.ca/index.php?context=va&aid=14188

    “The same week that “our” government in Washington told the Governor of California “not one red cent,” President Barak Obama handed over $2.775 billion to Israel.”

    That’s absolutely shocking.. but I shouldn’t be suprised.

    ……Also, thank you for that mental image of Max dressed in black leather and a chain around his neck….put me right off my pastie!

  • Mother Earth
    Jul 2, 2009 at 2:58 am

    There is another parralel in dutch ‘Geuzen/Bum revolt’ with the mafia theme in tamnz..

    When the first protests had died down, the spanish representative Alva invited some of the nobleman (Prince of Egmont and Count Horne) for dinner. They played cards and had peacefull conversations over dinner, but instead of continuing the game of cards afterwards they where arrested and beheaded a few days later. It wasn’t something they said, Alva just wanted them around to arrest them..

  • gonzomarx
    Jul 2, 2009 at 3:10 am

    about the same time as the South Sea Bubble in France there was another scandal that we will soon be reliving
    History as Farce

    http://tinyurl.com/kuuwp5

    and the guy behind it with a modern view of currency!
    http://tinyurl.com/8kto7x

  • Mother Earth
    Jul 2, 2009 at 3:21 am

    @gonzomarx Interesting!

    It seems bubbles are not so much a function of the interest rates, but more of the natural tendency of people to trust the valuation of others combined with their natural inclination to decieve others for profit..

  • Danny
    Jul 2, 2009 at 3:29 am

    China bans virtual currencies, Russia confines gambling to 4 areas of the country, and Max expects America to expand gambling. Whats going on here? The onward saga of savers v speculators?? anyone?

  • sharon
    Jul 2, 2009 at 4:11 am

    @Max & Stacy,
    Did either of you watch Newsnight last night? Definitely not good for Press TV on whom they did a complete hatchet job. I only hope it doesn’t get taken off the air in Britain.

  • Youri Carma
    Jul 2, 2009 at 4:15 am

    Bill Gates in Pirates of Silicon Valley scene “You know what they say in the Mafia? You keep your friends close but your enemies closer”

    Pirates of Silicon Valley scene – “You make people need you”
    http://www.youtube.com/watch?v=QrPU5_lBWX4

  • Mike2liverpool
    Jul 2, 2009 at 4:17 am

    Sharon
    What did they say?
    Mike

  • Fibon1123
    Jul 2, 2009 at 4:24 am

    Fat chance of solving any of this, WATCH OUT, that’s why SOUND money is important!! and anyway all these problems are part of us all and:-

    http://www.youtube.com/watch?v=cPYj-WeQ454&feature=related

    Madness of Crowds, I’m going to read this book again !!! The Madness of Crowds, by Charles McKay, one of the best books iv ever read and describes a emotional history like nothing iv come across.

    !!! TAKE A LOOK !!!!
    http://robotics.caltech.edu/~mason/Delusions/index.html
    or
    http://www.gutenberg.org/etext/24518
    or http://www.gutenberg.org/files/24518/24518-8.txt

    Its cheap enough to purchase and it forms alot of what you need to know. Some judge said he would like to ban links on the internet HAA that is the internet and a dB of files. Sometimes I think we live in a world of psychopathic idiots looking for security.

  • Mother Earth
    Jul 2, 2009 at 4:48 am

    California sacrificing citizen to pay external lenders..

    http://news.bbc.co.uk/2/hi/americas/8129840.stm

  • adormea
    Jul 2, 2009 at 5:16 am

    Hi I come from Germany and i must say Max Kaiser do a great Job. I agree with the most Themes he talk about. But I also think that he just points his Finger on this or those Bank, Institution etc. and searches for some guilty ones. Yes they are maybe guilty but, he maybe don`t see the real Problem or where the reason is for this growth. I hope you understand German or you know someone who do :)
    I would recommend you this Videos. Its a Video of Prof. Senf a economy Prof. from Berlin.

    here Part 2 from 17.

    http://www.youtube.com/watch?v=aTBRWEGGHr0&feature=related

    All videos you will find here.

    http://www.youtube.com/user/Wirting

    He think the Problems are a direckt result of the Monetary System we have.

    greetings from Germany.

  • sharon
    Jul 2, 2009 at 6:45 am

    When are people going to realise that they have (unvoluntarily) handed over all their money to the already rich banksters and that they are now being left to starve?
    What a farce!