Crowds and Credit

From Safehaven.com:

Manias are fascinating to study in history, but are hard to accept if you are living through one. The most memorable ones in history require two elements, crowds and credit. While today’s global markets are littered with some of the most complex financial instruments in history, anyone studying the history of financial markets quickly recognizes that many of today’s tools for speculating on future price movements can be found as far back as the Amsterdam Exchange, founded in 1610. This exchange allowed speculators to take out margin loans, invest in shares of the East India Company, and purchase futures contracts on tulip bulbs. That’s right; tulip bulbs.

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