Brenda Ward looks at eight of history’s most famous bubbles.

1630s
Dutch Tulip Craze
The Dutch Tulip Craze is believed to be the first recorded bubble. The tulip was new to Holland, and at the craze’s height, single bulbs were selling for more than 10 times the average wage. When the prices collapsed in 1637, many investors were ruined and the Dutch economy was badly affected.

1790s
British Canal Mania
After the American War of Independence ended in 1783, investors felt rich and, from 1790 until 1793, 20 new canal-building schemes were authorised. Some of the canals were profitable, but many never returned a penny. Others, such as the Grand Western Canal, were never finished.

1840s
British Railway Mania
By the 1840s, the industrial revolution created wealth, and new train tracks became a speculative frenzy. As railway shares went up, more money was poured in, until the industry collapsed. A third of the lines were never built, some companies turned out to be scams, and many families lost everything.

1930s
Gold Hoarders
After the 1929 stock market crash, many investors started redeeming dollar notes for gold. There were fears that the US might run out of gold, so the Fed raised rates. But then the US entered the Great Depression and people hoarded gold, driving prices up. Finally, private ownership of gold was outlawed.

1970s
NZ Property Boom
The buzz word in New Zealand in the 1970s was property. High inflation, an immigration boom, and a shortage of builders and building materials pushed up house prices in value by 53 per cent. Then the oil crisis hit, immigration slowed, and house prices fell 40 per cent.

1980s
The Share Market
The 1980s were the years of investing in ‘blue-chip’ companies like Brierley, Chase and Equiticorp, all giving investors great returns. Kiwis joined share clubs and borrowed to invest. Then, on 19 October 1987, the share market plunged. Fisher & Paykel is the only New Zealand 1987 top-30 company still listed.

1990s
The Dot-com Bubble
Investors speculating on tech start-ups, from 1997 to 2001, caused the dot-com bubble. Many internet-based companies, ‘dot-coms’, were launched and became share-market darlings. The bubble burst in 2000-02 and many of those start-ups failed. Amazon.com and eBay were two of few that recovered.

2000s
Carbon Credits
The Emissions Trading Scheme was set up in 2008 so New Zealand could meet its commitments under the Kyoto Protocol. Forest owners claimed carbon credits for carbon stored by their trees. Prices reached $18 to $20 a tonne, then cheap international carbon credits hit prices and many forests were turned into dairy farms.

By Brenda Ward

First published 1 February 2018

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