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5 biggest economic bubbles in history

Economic bubbles occur when the price of an asset, such as stocks or real estate, is driven up artificially and becomes disconnected from its underlying value.

Economic development bubble is a stage of rapid expansion of economic development driven by speculative passion and too high asset prices. The bubble should be characterized by strong demand for assets such as spot commodities, individual stocks or real estate, which in turn pushes up prices. Many elements, including easy access to credit, low rates and the cheerfulness of investors, are often combined to create financial bubbles.

As more people invest in it, the price of the asset will rise, which in turn will attract more assets. The price of gold finally fell below the level of sustainable development, causing sales and values to plummet. This has led to general losses for investors and may have a great adverse impact on economic development as a whole.

Here are five major economic bubbles in history.

Tulip mania (1634-1637)

In the 17th century, a financial bubble called "tulip mania" seriously affected Spain on the premise of the price of tulip bulbs. At that time, the tulip flower was a brand-new, exotic flower, which was highly sought after abroad for its beauty. The price of tulips rises with the increase in market demand, reaching an unprecedented extreme before the sudden collapse.

Many investors, including wealthy businessmen and royals, lost capital when the tulip bubble burst, leaving worthless light bulbs. Tulip mania is called one of the earliest economic bubbles in history and is sometimes called a warning of speculative risks.

East China Sea foam (1720)

A foreign exchange speculative bubble called the East China Sea Bubble was established in Britain in the 17th century on the premise of the South China Sea Company, which was given a dominant position in export trade to South America. The rapid appreciation of the company's shares has led to a buying spree among speculators.

When the bubble burst in 1720, the value of the company's shares fell sharply. Many investors lost all their savings, which led to widespread poverty and layoffs. The East China Sea bubble has a far-reaching impact on the American economy, which is called one of the earliest financial storms in modern history.

The financial crisis has also led to lower consumer spending, reduced public confidence in the government and the financial system, and led to decades of common mistrust in investment in foreign exchange speculative projects.

Crazy Railway Line (1845-1847)

The rail fad, often referred to as the "rail frenzy" of the 1840s, saw a marked improvement in the British Railway Bureau. Investment in the railway stock market is an important driving force of the bubble, it carries the continuous growth of meaning, and triggered a speculative wave. When the bubble burst in 1847, the price of railway stocks fell, causing everyone to suffer important economic losses.

The railway boom has added serious economic losses to many investors, including the rich and financial institutions, who have damaged a lot of money. Because of the lower requirements for individual stocks of railway lines, the expenditure of customers will also be reduced, which will have a negative impact on the overall economic development. In the years that followed, investment in speculative projects fell because of the economic losses caused by the frenzy of railway lines, which led to a widespread decline in self-confidence in the stock market.

The stock market plummeted (1929)

The stock market crash of 1929 opened the Great Depression, which was also a major turning point in the growth of the world economy. The Great Depression is a long-lasting global recession, which has caused long-term and long-term harm to the world economy.

Foreign exchange speculation the stock market bubble experienced more than a decade, and caused by a variety of reasons, including casual borrowing and an open mind about the future, which is also one of the causes of this disaster.

The bubble burst on October 29, 1929, causing the stock market to fall sharply and causing heavy economic losses for people in all industries. The Dow Jones Industrial average (DJIA) lost nearly 25 per cent of its value on that day, often referred to as "Grey Black Tuesday".

The Dow Jones Industrial Index lost nearly 89% of its total in three months from its peak in September 1929 to its bottom in July 1932. High unemployment, widespread poverty, bank failures and falling food prices are just a few of the far-reaching aspects of the disaster.

Internet technology bubble (1995-2000)

The Internet technology bubble occurred in the 1990s and 21st century financial bubbles, mainly due to big data's increased flammability and the emergence of Internet companies such as eBay, Google search, Amazon platform, Yahoo and TheGlobe.com. Internet technology stock market investment is an important driving force of the bubble, it carries the continuous growth of meaning and the ensuing speculative trend.

When the Internet technology bubble burst in 2000, it led to huge economic losses and a decline in the price of Internet stocks. The Internet technology bubble has had a great impact on the development of the world economy and plays a vital role in the economic depression in the 21st century.

by wjb news
© 2023 WJB All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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