Beyond "gravitation"-1720, United Kingdom "South Sea bubble" events _ thousand amperes

The next financial crisis when? (Series 3) First, the United Kingdom the development of capitalism and the obtaining of maritime supremacy "bubble" (Bubble) is a term introduced by figuratively, economics or precisely, introduction to talk about the scope of the excessive financial speculation, it should be "credited" in 1720 years took place in the British Empire was later called the "economists" speculative bubble in the South China Sea. Due to the South Sea bubble events, "South Sea bubble" has become a modern macroeconomics often refers to one of the the nouns, describing the price and value of deviate. And thus the birth of the "bubble", since the 1980s, the global spread of the speculative bubble, in recent years have been independent for a branch of economics. When the Netherlands people busy with iron mill because "the tulip bulbs panic" stirred up the economic shocks of the waves, it throne of world economic hegemony has been quietly to the Isles of the ship sink "aircraft carrier". The second half of the 17th century, the United Kingdom long-term savings of economic strength and finally make it a veritable new World Trade Center. United Kingdom Spain Netherlands substitution, become the new world "leader" is well deserved. 1588, Spain's "invincible Armada" has been even more than it "magic" of the United Kingdom fleet overwhelmed; 1652, Netherlands fleet in the United Kingdom Navy's fierce fire before it loses its hero. These two sea battle at that time was considered the decisive battle of the two, because it in effect determines the West, Dutch two maritime supremacy of loss of, or decisions of the British Empire's up. The situation is clear: like Spain, the Netherlands, the United Kingdom in this way and the sea of seemingly unrelated, business profits mainly comes from the national maritime trade, maritime supremacy of gain and loss on the country's future is essential. What's more, they are faced with a capitalist dawn rising new era. Sea of hegemony was contributed to the United Kingdom overseas trade and domestic development of industry and commerce. And it is the high profits and rapidly increasing wealth. Throughout the 17th century, genuine strength rivalry with Netherlands non-United Kingdom. United Kingdom of the East India Company was founded in 1600 years, than the Netherlands is still early to the East India Company for two years, and was known as the originator of modern AG. In the use of modern financial technology, at the beginning of the 17th century Netherlands, Britain, and almost and driving. When the Netherlands because of the "Tulip craze of" burning the big heat, the consumption of refined peas, United Kingdom of Great Britain's ship was chopping waves, move on. 1689, the United Kingdom only 11 AG, but to 1695, then increasing to near 100. At that time almost all kinds of securities are thriving in the London Exchange access by Cohen Hill near Lombardy Street a narrow alley, numerous cafes also became a place of securities transactions. However, due to various constraints, to scale the number of stock transactions still not too big, its warm even better buy corporate bonds. At this point not only to those of bond in order to achieve a stable investment income, attractive, trust fund trustees and chartered charities also buy bonds as a safe trade. In view of this situation, most AG in bonds in their brains. Throughout the 18th century, the bond is not only for the United Kingdom some big company provides a large trading capital and become London financier of cash ready. Notably, in 1689, the United Kingdom of small private investors, the main investment channel that is not stock or corporate bonds, Government securities and bonds. This is a financial practice prudent Government is still not a good thing that there are sufficient financial backing, when dealing with natural ease. national policy Note that you must have the self-control to bear the heavy debt burden, never is not easy to go, leaving France Louis XIV, the painful lessons of the United Kingdom Government have no reason not to seriously suck. Second, the South Sea company's "successful" and the ripple effect "bubble" is called "" South Sea bubble ", because this speculative event from beginning to end is connected to the South Sea company. Speaking of South Sea company, first said to two key figures, an Oxford Earl Robert Harry (RobertHarley). It was at his instigation or more precisely, at his instigation that established the South Sea company. Another key character is John ? Blount (JohnBlunt). The company was established in the South China Sea, Blount was operating a deposit, issue bank notes and mortgages of the land bank (its predecessor is a use of angono knife's technology companies producing Swords), the Land Bank and the other two small banks join together to form a syndicate, in terms of off-take Government Treasury bonds and Bank of England to compete. Blount was however is a legal instrument for people copying a copy of the message, which has this and people earn talent? competition after the land bank's stock price plummeted, once in a bankruptcy situation. Things never has a dual character. United Kingdom overseas trading profit increases, benefit from it in the Nordic region in a series of victories in the war, but also makes it a war with France Louis XIV era, carry a heavy burden of debt. The early 18th century, the United Kingdom to participate in the succession war Spain. This is a constant challenge, the United Kingdom Government must have huge financial backing. Then, in the financial operations of the true joys and sorrows of rough grasp of Blount, recommends that the Government release with the nature of the lottery ticket. The result is successful. 1711, Blount and planning throughout Western Europe issued 2 million pounds, annual interest of 8% of the bonds. And modern popular lottery, lottery numbers are classified into five categories, each category of Prize amount, to attract people to buy lottery tickets. Thanks to the contribution to the success of the last release for capital, the issuance of business by the Blount's sword syndicate, the Bank of England is excluded. This bond was a great success, as the Government raised as high as $ 900 million in capital. "Higher level" time to fully mature. So, after some lobbying and planning, Blount and Exchequer Harry Finally, in 1711, fancy wrappings called "help the Government address the increasing burden of countriesDebt burden "of the South China Sea AG. As a trading conditions, the Government guarantee on the converted bonds pay 6% interest, and shall be exempt from indirect taxes. South Sea company also acquired the shares and from 1711, from 1 August in the United Kingdom and the continent East Coast trade privileges, then further extends to all of the American West Coast, involving trade rights "in this context all the country's inland and coastal waters, are considered to belong to the Kingdom of Spain and the future of the region may be newly discovered areas". In this way, the company became the South China Sea and the East India Company, the Bank of England on an equal footing with national companies. South Sea company borrowing sword Bank carries on the business of the concessionaire, the sword Bank through the purchase of bonds issue and thus have a different name in the South China Sea in the company's stock, and a substantial portion of the control of the Board of the South Sea company. Later, the South China Sea company had twice the larger reorganization, but the sword Bank goes through, from 1718 year sword Bank still has six directors of the company as the South China Sea. In fact, as long as you carefully look at the map of the world, it is not difficult to find Spain wishes to this vast region of barter and other trade monopoly. Although this hope very slim, but also that Spain will never retreat easily. At that time, Britain, Western countries ongoing treaty negotiations. United Kingdom requirements taking into account its in Mexico, Peru and other countries of interest. United Kingdom of speculators were only so much hope in this area have special rights because have these rights will be able to open the door of the slave trade. However the results of the negotiations was not like United Kingdom business people have come to expect. Spain only to open a small window of opportunity. Allow only the profit-sharing company in the South China Sea, sail to America for a year. The slave trade was the most money though takes one, but this risk management does not mean that can firmly profits, because of the traffic in slaves during the often high mortality rates. From the South China Sea in the heart of the company founder, is filled with strong desires and speculation. The company is willing to buy those government bonds, to be blunt, but is used for the exchange of South Sea company stock. Know the facts people prior to quietly valueOf 55 pounds purchase buy government bonds, and then when the company was founded as an exchange value of 100 pounds of South Sea company stock. South Sea company leadership not one operating the actual capital and understanding of the nature of the South China sea trade, just to the South China Sea privileges under the guise of engaged in financial speculation. However, the company showed to the public of the image is full of confidence and well-established. South Sea company in London to rent a luxurious high-rise buildings as the headquarters of the Office, the Board's meeting room is furnished splendid Tang emperor. The company was founded in the early days, because of various reasons, the earnings situation, stock prices fell several times. To change this situation, the company began massive bribes to government officials and accelerate the path of the collaborations. In order to seek more trade privileges, South Sea company, its stock as a gift to the relevant government officials. Even the new King George has also made a large number of company shares. 1715, the company's Board of Directors election, Wales first kiss and the Chairman. 1718, Chairman of the Board of Directors once again restructured as easy as King, making the South Sea company and dynasty more closely. It is against this background, to 1719, South Sea company's capital has increased up to 1250 million pounds. South Sea company directors to use its own and the special relationship between the Government, spread out a number of rumors in favour of their own political and advocacy of its wonderful big prospects, which promoted the South Sea company stock prices to rise. History in the year 1720, South Sea company was a godsend. At this point in the United Kingdom public exact is a public good to be rich in dreams that part of the extremely sensitive people, on the surface of the South Sea company showed an overwhelming response to the opportunities, the driving force for the stock market go up and get a cup of soup-desire more strongly. Also at this time, sufficient for Scottish pride of outstanding "national hero" by John Roy is also the Straits France achieve his aspirations of the British years. France Mississippi company stock prices sparking speculation heat waves, push with the channel's gushing waves to Isles upheavals, straight Jaron has been stewing over United Kingdom people. Thus, the trend started in the chauvinistic people who mind spit up: why all the personal funds to flow into the Mississippi company France?, United Kingdom for this should be how to compete with it? whether public or King or Blount, the answer is only one: South Sea company. South Sea company directors from John Roy's move in great inspiration. They noted the attitude of the public at this time, initiation of a bold suggestion: up to 3100 m funding of all bonds in order to enhance the credibility of the South Sea company. This is a bold action. And John Rowe in France on the comedy of course love than public national people even more alarming courage. When the resulting a Bill tabled in Parliament, the South China Sea in the company's stock fell from �� 130 per share up to 300 pounds. South Sea company to make the motion is passed, for those who care for and support the delivery of a big wheel will be a certain amount of stock as a reward. It is said that a bribe money up to �� 125 million. Many Ministers members knowing it was a hoax, but the lure of money by not. Only served as Comptroller of Commons Robert Walpole's refusal to accept a bribe, and on this motion, the serious and violent attack. He said: "the genius of our nation from trade and industry cited to support an open stock speculation. It can be profitable illusion as bait, so that those who are not vigilant, bankruptcy so that they in pursuit of wealth and loss in a shambles. "However, this plan eventually to modify programmes were adopted. In addition to the Bank of England and India Company can continue to purchase part of the national debt, most of all by the South Sea company contract. 1720, April 12, the Bill adopted by the fifth day, "South Sea company" 300 pounds per share price to issue new shares, the purchase of shares by instalments are 60 pounds, while the rest may be divided into 8 lump. This temptationEven the King couldn't, once the subscription worth $ stock. The King's exemplary role greatly stimulate the enthusiasm of the public speculation. Stock prices continue to rise. Some platter that large sums of money that led to public flocked in speculative, thus contributing to the rise in stock prices has added a new impetus. To meet the public's growing desire to "invest", the South Sea company went on to release a 400 pound per share of new shares. The public to continue buying, South Sea company then to 550 pounds per share price of issue of new shares. Stock prices are still rising. June 15, the company announced the terms of payment are more lenient in new round of release. When stock prices skyrocketing reached 800 pounds, more than half of the House of representatives have purchased the shares. Just in France-Kun chemwell slope Maddox Street staged scene, but also to the streets of London now. Participation in more and more people of speculation. Not only do business has always looked down upon and other money-related transactions of landlords and noble abandoned their pride in a "sea", even if it has been a proud divinely famous intellectuals and finally press the flicks could not join the ranks of stocks. The discoverer of the universal gravitation, the world famous great physicist eysenck ? Newton served as Secretary for the United Kingdom and minting, to make a contribution to the stability of the pound sterling. In the spring tide of push-flocking speculation, he cannot be divinely, joined the ranks of stocks. In the later "bubble" burst, he lost 20 pounds, according to the present value of approximately $ 1 million or more. Aier Lai Viscount in the South Sea company events in the book describes in speculative boom at the time said: "then people, politicians forget politics, lawyers forgot Court, traders forget trading, doctors forget patients, boss forgot his own shop, preacher forget sermon altar, even those women who forgot to boast and vanity. ... "From 1720 years 1-July, the South Sea company stock prices are skyrocketing. 1 month is 128 pounds, 3 month is 330 pounds, 5 month is 550 pounds, 6 month reached 890 pounds to late summer speculation reached its peak, the stock price has exceeded 1000 mark. That so many people get rich overnight, not to mention United Kingdom history never, that is, the former Netherlands and present it in Paris. South Sea company's great success the ripple effect is more extensive than ever. United Kingdom human intelligence, their amazing imagination, in that moment had been fully tapped. At that time very bizarre or is considered the most imaginative is a company producing and selling typewriter (then also very rare) company (Parker, co) launched the stock promotion plans, they claimed that will implement a plan to manufacture precision guns, it is said that this is under the enemy's guns can Christians or Turkey and shoot round or square bullets. Later in the "foam company" climax, there was a "South Sea card" Poker listing, one that describes the military "technology revolution": this is the destruction of the multitude of rare invention, just kill the domestic fool not to hurt the foreign fool. Friends, don't fear this horrible weapons, it only hurt their stock holder! tide of people involved in speculative more and more, resulting in a South Sea company can not meet the public's enormous appetite. In this way, some of the promoters had founded a new company, and to stock market investing significant new issue to deal with people never meet desire of speculation. Over time, the new funding scheme ever produced. A bit of an innovative, a bit of a freak. Such as manufacturing mechanical piano, import Spain jackass, desalination of seawater, to sawdust manufactured wood, built against pirate ships, encourage in United Kingdom for a horse optimization and horses for insurance, operating a wig, as illegitimate built hospitals, extracted from the lead, as well as the manufacturing of the perpetual-of silver, SOAP manufacturing, repair and reconstruction of the parsonage, etc. People do not know, don't care whether these companies are the same, only know that they can get great benefits of the company is enough. Naturally no one on the prospects for the company and its nature a little to the challenge. Most people from the heart of gratitude God invented this new kind of gambling games, like traditional Chinese "drumbers". More than just a drum, flowers sales jump, everyone can make money. A wise man is seen through the apex of this mentality, he created a company that is more subtle. Hanging signs are only "operation a lucrative industry company" does not describe the specific business of the company, as long as the "lucrative" you can. Equity book generously promised stock will be unheard of in the proceeds. It was also convinced of this. Stock issue from the start, 9 in the morning to 2: 00 pm will have nearly a thousand investors. The company's founders down non-greedy generation, is the afternoon will soon leave the door closed, the company turns to Europe. This is a natural clay cattle into the sea, and from then on no news. Needless to say, in the suddenness, South Sea company has always been the biggest speculator. Its stock also has always been the most popular hot goods. Not only is the United Kingdom, even those shrewd of Netherlands, and Switzerland were also a lot of money flowing to snap up the South China Sea, joined the ranks of the company's stock. South Sea company incited stock hot just shook the whole of Europe. Third, disillusionment and the South China sea foam "bubble Act" as the Foundation and waste is eventually going to burst the bubble. Speculation like waves, tidal tide there. When the speculative frenzy reached its peak, it is the speculator inhabit. The following three factors to twist into a fuse, causing the "South Sea bubble" burst. First, in 1720 in July, the United Kingdom Parliament in the South Sea company of strong demand, in order to protect the interests of the South Sea company, maintain its monopoly position of speculation, promulgated the "prohibition of foam Company Act" (the so-called "bubble Act"). Act ordered to disband "foam company" to prohibit no Charter companies issued transferable securities, and intensified control of the stock market. This is a correct decision making wise and useful, but became a leading stock market confusion. Also at the same time, due to some coincidence that many investors, particularly those Netherlands, Switzerland investors decided to sell their stock to cash, it is also during normal trading stocks, dueFor the Netherlands from stock hot infection, also prepared in its founding companies such as Mississippi or the South like the company to attract and retain their own funds. In essence, this is a speculative fever temperature heating, but also aroused investors are heart fibrillation. Bastion always break from within. The third and most decisive a factor is derived from the "internal" South Sea company. The most significant of which is due to the corporate elite forces to compete. The company's directors and senior staff have all had an account. The idea of everyone's heart has got a strange impulses. When in a bit longer bear huge psychological pressure, soberly to stock market price and the company's prospects have been completely severed ties, they decided to throw out all the stock in hand. This is the most important one. Because it heralds a massive sell-off will be followed. In speculation reached its peak, the South Sea company every move naturally very compelling. Thus when the "South Sea company" senior officers began to spread the message of a weapon, not trail and go immediately. Been speculative fever BBQ's shareholders are socks this psychological bearing capacity is so fragile, there is just a sign of trouble, big crash, coming as panic! terrorist suddenly enveloped the whole of London. London Stock Exchange and small still like 6-7, the same person as the tide. People's mood is still urgent, as the same, except that buying into a sale. In August, speculation reached the heat of the day, "South Sea company" stock has touched high reaches 1050.0 m; September 1, South Sea company stock in the stock exchange index of 775 pounds, two weeks later, dropped to 520 points to 14 October, then fell to 170 points. By December, and down to 124 pounds. With the advent of the big crash and crash of the stock price, which sprang from foam company also died. However, the South Sea company but not its own demise. Because it involves too many people, especially involve too much money. In order to save the South Sea company, or more precisely, in order to stop the great turbulence in the stock market, including the Government capital, Bank of England, the South China Sea company, have taken a lot of emergency measures. Blount was resorted to by every means; parliamentary debate over the long term, to reduce the debt of the South Sea company; bank of England, after long time of thinking, and ultimately also to the South Sea company out of the burnt out a helping hand, raise �� 3 million of the funding goes to the South Sea company, with own 37.5 million pound Government bonds into South China Sea in the company's stock, thus becoming the South Sea company's largest shareholder. Perhaps because of the hostility of the past and the future of their own account, it is not delivered and sword Bank, leading to bankruptcy. Sword of the bankruptcy of banks means that on the Bank of England's dominance finally challenge. Despite the many looks strong emergency measures still cannot stop the stock market crash. When Exchange front passenger slightly swarms dispersed, fierce and cruel goating time again. Blount, it is now Sir John ? Blount, in London's streets nearly got a trade stocks in victims killed. Although Blount once with government officials close, still in jail. In order to save himself, he chose a very ordinary modern approach to government information is an accomplice. While the family was cut, but luckily they saved their lives. But other people and not all the same as his mind and luck. Walpole is one of the few not accepting bribes of one of the Prime Minister to its political competence and financial management skills. 1720 in autumn, he accepted the King George I of delegates begin to consolidate the financial markets. The lower House of Parliament set up a Committee to investigate the origin of the entire event. The results identified in my house, 462 and 122 upper House and South Sea company events. In the course of the investigation, the post of poison and died, Finance Minister from Office, the Secretary of the fright died. The Government of the South Sea company courses to 200 million pounds of heavy, mainly by the head of company directors and cash. And South Sea company involved members were removed from the Board, its illegal money confiscated. South Sea company financial manager Robert ? Claytor (RobertKnight) knew the major stakeholders, hurried to the European continent, then hunted, imprisoned and eventually extradited to return. Later he managed to escape, in alien exile up to 21 years. Other activities involved in conspiracies directors or senior officers were dismissed sent to prison. London City and throughout the United Kingdom's economic life, as if the Netherlands tulip bulbs panic and France Mississippi crash their consequences, are also significant recession. Although the Government has adopted measures to compensate for the "investment", those in the speculative binge buy stock in still lost almost all of the investment. Government bonds and interest was greatly reduced. From the "South Sea bubble" event in the Government is also aware of a truth: no longer depends on the public debt is in the hands of the United Kingdom Government always plaything has since paid interest on any debt. But as with France, the price is also very high. The administration of the creditors or the Casino, or poverty, the Government's credibility would be greatly impaired. And France's attitude towards the Bank, a warm front on the stock to the MU people now-a word about the unit. "South Sea bubble" incident left England on emerging stock enterprise and stock speculator's long fear. 1734 years, "the bubble Act" has been further strengthened the legal provisions of the "prohibited stock speculation of disgraceful conduct" and "prohibition of all relevant securities cash and futures prices of gambling, throwing up and buy right." Until 1825 that Act was repealed by up to more than a century, the stock trading on the British island almost disappeared. 1825 United Kingdom Parliament repealed the "bubble Act", are no longer prohibited was founded through the issuance of the stock to attract investors-stock company of folk. 1834, authorization issued to a joint stock company monarch Charter certificate that has a proxy by government officials of a right of action, which in fact recognizedThe joint stock company's legal status. In 1844, the United Kingdom Parliament adopted law, provides for the establishment of the company without obtaining a licence, as long as a simple program, you can set up the company. According to this Act, the United Kingdom set up joint stock companies registry, require more than 25 members and the transfer of shares of "partnership enterprises registered as a company." 1844 ~ 1856, a total of 910 home such joint stock company was registered. But in this note a book of joint stock company, the shareholders of debt obligations still not subject to the limitations of its capital contribution amount, that is to say, still has to bear unlimited liability. Until 1856, the United Kingdom Parliament to confirm the registration company debt only limited liability. Thus, the basic framework of company system is established in the United Kingdom. Sit back and relax?