Jan 6, 2011

The South Sea Bubble

"I can calculate the movement of the stars, but not the madness of men." - Sir Isaac Newton

(Wikipedia) 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. The primary element of trade was slaves (Asiento). 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. Continued