Shared by Lisa Marie Griffith
The South Sea company was an English company which, in 1720, was granted a monopoly to trade with South America. In return for the monopoly the company lent £7 million to the English government and underwrote the national debt (which then stood at £30 million) for an interest rate of 5 per cent per annum. Demand for stock in the company grew overnight and conditions all of a sudden became ripe for one of the most famous bubbles in English history. Clearly the English had learnt nothing from the Dutch and their fanaticism for Tulips!
I came across this Rory Bremner clip the other day while looking for some material relating to early modern financial bubbles to show a class and thought I would share it. Not that we need an explanation of what a bubble is these days but I thought this explained it very well in the context of the early eighteenth century.