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5 Economic Bubbles That Shaped Markets—And Why They Still Matter
Think crypto bubbles are new? History says otherwise. Economic bubbles have been around for centuries, each teaching the same brutal lesson: hype doesn’t hold.
Tulip Mania (1634-1637) kicked it off in the Netherlands. Exotic tulips → insane demand → prices skyrocket → crash → fortunes vanish. Rich merchants lost everything.
South Sea Bubble (1720) in England was worse. A monopoly trading company got a monopoly trading hype. Stock frenzy → bubble burst → widespread poverty and unemployment. Confidence in the financial system? Destroyed for decades.
Railroad Mania (1845-1847) proved boom cycles never get old. Rail stocks soared, everyone speculated, it collapsed, fortunes evaporated. Consumer spending tanked. Stock market trust plummeted.
The 1929 Stock Crash was catastrophic. Easy lending + market euphoria = disaster. Black Tuesday (Oct 29) nuked the market. The Dow lost ~89% over three years. Depression, mass unemployment, bank failures followed.
Dot-Com Bubble (1995-2000) showed that even the “future” crashes. Amazon, Google, eBay—hype went parabolic, valuations disconnected from reality, 2000 hit different. Billions evaporated. Early 2000s recession? Thank the burst.
The pattern’s identical every time: easy money + irrational optimism + FOMO → prices detach from fundamentals → reality check → liquidation nightmare.
Why does this matter? Because spotting the next bubble means understanding the signs. And spoiler alert: they never stop coming.