Name: Top 10 Economic Bubbles That RUINED Lives
Uploaded: 2026-03-06T17:00:38.000Z
Duration: 16 min 29 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Now it's exactly a week since one of the biggest, supposedly most stable cryptocurrencies took a massive tumble.

And today we're exploring moments in history when common sense went out the window, prices went through the roof, and

the resulting crash left millions of regular people with nothing but empty pockets and broken dreams.

It seems amazing that a business as huge as this can fail in this way.

South SEA BUBBLE In September, when the bubble burst, England was plunged into an economic and political crisis.

This was one of the first examples of a financial boom and bust, and

was the event that gave rise to the use of the term bubble to describe a spectacular market failure.

In 1711, the South Sea Company was established to assume a portion of Britain's national debt in exchange for exclusive trading rights to Spanish South America.

The lure of this supposedly vast untapped wealth ignited an unprecedented speculative fervor.

It's worth remembering that the South Sea bubble occurred when the concept of hands off investing was quite new.

The development of the Joint Stock Company in Britain allowed businesses to attract large amounts of capital from investors who could easily sell their shares to someone else if they needed their money back.

The success spawned a proliferation of absurd bubble companies, including one famously described as a company for carrying out an undertaking of great advantage, but

Parliament passed the Bubble act to curb these rival firms.

But this ironically drew attention to the South Sea Company's own questionable value.

As insiders began to sell, public confidence evaporated and the price of shares collapsed, leading to widespread bankruptcies and a massive political scandal in Britain.

The South Sea Company was kept alive, but scaled back significantly and kept under stricter government control.

It was broken up, with some of its capital being transferred to the bank of England.

they continued to do some trade with South America and even entered the whaling business with little success.

I give them a receipt, a banknote, a piece of paper, but it's just as good as gold.

Following the War of Spanish Succession, France found itself in a dire financial predicament with crippling national debt.

Enter John Law, a Scottish economist with a radical solution.

Replace metallic currency with paper money, backed by the wealth of the French colonial territories.

I see the Mississippi river and that land they named after King Louis, Louisiana.

It's rich in diamonds, gold, furs, Rubies?

In 1717, Law established the Compagnie d', Auxilant, granting it a monopoly on trade with the vast Louisiana territory.

However, the perceived wealth of Louisiana proved largely illusory and actual profits were meager.

As astute investors began to cash out their paper money for gold and silver, public confidence wavered.

When the bubble burst, the value of the shares and the paper money they backed evaporated almost overnight.

John Law slipped across the border in disguise, broke and broken hearted, never to set foot in France again.

How soon before it was converted to steel rails for a proper steam railway?

Well, the railways converted in the 1830s.

It becomes part of a network and part of the mania that's sweeping Britain.

Throughout the 19th century, the industrial revolution was in full swing and railways were the undeniable future of transport.

This fertile ground for innovation quickly morphed into a speculative frenzy.

Is there any single figure that stands out in this great expansion of the railway?

If you're talking about railways, we have to talk about George Hudson of York.

The railway king was he became styled through the 1840s and Hudson really came from nowhere.

Thousands of railway companies, some legitimate but many outright fraudulent, sprang up each promising lucrative routes and unimaginable returns.

But the tracks led many straight to ruin.

By 1847, the bubble of over speculation and unrealistic projections began to deflate.

He had his own money, but even so, how could he have afforded this?

It's where a little bit of sharp practice came in.

And this was the beginning of Hudson's downfall, really.

It was found that he was falsifying accounts.

He was selling land that wasn't his to sell.

The bank of England, facing a gold drain and a broader credit crunch, aggressively raised interest rates reaching 8% by October.

This move further squeezed the over leveraged market.

Countless nascent railway companies ran out of funds or were exposed as pure fronts.

Shares then plummeted, wiping out entire fortunes in a matter of weeks.

What does the rise and fall of George Hudson and the whole railway mania that you've described, what does that tell us about the Victorians?

What the railway mania tells us is there was an appetite for everywhere to be connected.

It's unifying the country in a way that nothing else can do.

Men take to the streets offering themselves and their skills for $1 a week.

Suddenly for millions of Americans, nothing to do and all day to do it.

Eyes are lowered, hands held out as the unemployed shuffle along and accept a quarter.

The so called Roaring Twenties were a period of unprecedented optimism in the United States.

Speculation ran rampant, with citizens buying stocks on margin, meaning borrowing heavily to finance purchases convinced that prices would never fall.

The illusion shattered over a terrifying week in October, culminating on the 29th, better known as black Tuesday.

But the real disaster began when the panic spread to the banks.

5000 banks shut their doors to depositors now in greatest need of their savings.

Massive runs broke the system, wiping out the life savings of millions.

Unemployment soared to an unprecedented 25% in the US with families facing destitution and homelessness, the Great Depression remains the ultimate warning of of what happens when the dream of easy wealth curdles into a nightmare of breadlines and shanty towns.

Private industry joins with relief agencies such as the Red Cross to do what they can, filling food baskets and setting up soup kitchens.

Japanese asset price bubble Plaza cord was a kind of agreement which accomplished much more than everybody expected for the meeting.

When we went to plaza meeting, we are quite prepared to see substantial increase in yen's value.

In the late 1980s, Japan was a manufacturing titan.

Following the Plaza Accord, the economy was awash with cheap credit, leading to an extravagant binge in real estate and stocks.

Land prices in Tokyo soared to unimaginable levels.

At one point, the Imperial palace grounds were rumored to be worth more than the entire state of California.

I thought it was the East's revenge on Western capitalism.

If it comes to it, I thought we should buy all of the United States.

We really should have bought more of America.

The Nikkei 225 stock index reached nearly 39,000 on December 29, 1989.

Everything changed for the worse in 1990 when the bank of Japan jacked up interest rates.

The aftermath ushered in Japan's lost decades, a period of prolonged economic stagnation and deflation.

Banks were saddled with dud loans and the bubble's burst led to decades of job insecurity and a decline in Japanese living standards.

We worked it out at the time in the bubble years that as a piece of real estate, Japan was worth the whole of the United States seven times over.

Every day, America Online is making it easier for people to live, work and play.

I'm just finishing up here with my new kayaking friends.