eJOURNAL USA 18
BUBBLES AND
PURPORTED BUBBLES
WikimediaCommons
1637 Tulip Mania The Nifty Fifty American Stocks of
the Late 1960s and Early 1970s
©Bettmann/CORBIS
Florida Speculative Building Bubble 1926
©APImages
1920s American Economic Bubble
©APImages
1840s Railway Mania
©MaryEvansPictureLibrary
1720 Mississippi Company
1720 The South Sea Company
Tulip Mania
At the peak of the Dutch
tulip mania in February
1637, tulip futures
contracts sold for more
than 10 times the annual
income of a skilled
craftsman.
The Nifty Fifty
American Stocks
Rising prices of stock
shares attracted the
attention of investors.
Additional investment
provided buoyancy to the
price, regardless of the
true value of the asset.
Florida Speculative
Building Bubble
Florida’s first real estate
bubble was based on
outside speculators, easy
credit access for buyers,
and rapidly appreciating
property values for
Florida swampland.
American Economic
Bubble of the 1920s
Americans overextended
themselves to take
advantage of the soaring
stock market and
expanding credit.When
the Federal Reserve
raised interest rates, the
stock market crashed and
the bank panics began.
Railway Mania
During the British
Railway Mania of
the 1840s, the newly
emerging middle class
invested their savings
in prospective railway
companies; many of
those lost everything
when the bubble
collapsed.
A
n economic bubble can occur when the price of an asset
rises far higher than the item is actually worth. The
assumption is that the next buyer will pay an even higher
price for the asset. Bubbles can be triggered by inexplicable
phenomena (fads or crazes), or kindled by the manipulative actions
of individuals or corporations.
eJOURNAL USA 19
©APImages
Real Estate Bubble
1997 Asian Financial Crisis
1995 - 2001
The Dot-Com Bubble
©APImages/MarkD.Phillips
1980s Japanese Asset Price Bubble
Sports Cards and Comic Books
in the 1980s and Early 1990s
Spider Man
The comic book
speculator market
reached a saturation
point in the early 1990s
and finally collapsed
between 1993 and
1997.
Beanie Babies
Stuffed animal Beanie
Baby toys were a craze in
the early 1990s. Scarcity
created increased demand
and higher and higher
prices..
Asian Financial
Crisis
Large quantities of
credit became available,
creating a housing boom
and pushing asset prices
to an unsustainable level.
Dot-Com Bubble
The dot-com bubble
of the late 1990s was
based on speculative
activity arising from the
development of new
technologies.
©APPhoto/JohnL.Russell
Beanie Babies 1996
©Images.com/CORBIS