Boom & Bust

In 1792 the antics of an English-born speculator called William Duer sent the newly born US's ramshackle financial system into meltdown as an ill-fated attempt to corner the market in government bonds blew up, ruining the speculators and those who had lent them money, including the Madame of a brothel. The attempt at cornering was made possible by the process of setting up the nation's first central bank. Alexander Hamilton managed to contain the immediate fallout but his arguments in favour of setting up a central bank were weakened and its charter expired after 20 years. However, a mostly modernized financial system was in place by then, which had allowed the nation to go through with the Louisiana Purchase without lasting damage to its finances. 

In this episode, we cover the implosion of the South Sea Co. amid an outbreak of the plague in France, and put it into its context internationally. The affair threatened the throne of George I and prompted a frantic cover-up on the part of the government after the man who was potentially a star witness fled with a green-covered ledger containing the names of those who’d benefitted illicitly. The affair was also the key to the return to the top of Robert Walpole, who used it to devastating effect.  

John Blunt, Robert Knight and their associates used the Hollow Sword Blade Co. as the vehicle driving the South Sea Co., an entity that was set up to rationalize the British government's debts but which turned into a gigantic fraud that almost brought down the ruling dynasty. The story is well known but how many people know what really happened and how it all blew up? Join me as we find out what really went down and try to put some flesh on the bones of a story of financial greed and political ineptitude.  

This episode picks up the story of John Law as he reaches the height of his success and power and follows him through his fall from grace as inflation explodes and France descends into chaos. It follows on from Part 1, which introduces many of the characters and sets the scene for the story of the Scottish adventurer who became the most powerful man in France before it all went wrong. I have tried to keep things as simple and non-technical as possible, although it's impossible to avoid occasionally using words like "economy," "inflation," and the like. Please subscribe on whatever is your favorite podcatching platform. Reviews are not only appreciated, they are welcomed with open arms.   

This is part 1 of a two-part series on John Law and the Mississippi Bubble. Law was a Scottish murderer, gambler, economist, banker and author who, while under sentence of death in Britain, rose to become the most powerful man in France, before falling from grace and fleeing after the financial system he had put in place imploded dramatically. This episode deals with his adventures before he achieved power and was able to put his ideas into practice, and with his rise to power. 

In this episode we journey back to 17th century Holland where the locals have gone crazy about flowers -- tulips, to be precise -- and are trading them for crazy sums of money. We look at what actually happened and whether things really were as nutty as the popular story holds, and discover that while there is a grain of truth lurking in the flowerbeds of the Dutch Republic, it's all a bit more complicated than that. On the way to a conclusion, we learn about tulip horticulture, living conditions at the time, and the beginnings of an early modern financial system. And, of course, we see how the lure of leverage was as irresistible 400 years ago as it is today. 

Those whom the Gods would destroy, first they give leverage. 

400 years ago, the Dutch people went mad. In a search for easy wealth, they traded tulips. Then it all went horribly wrong. The boom turned to bust and people were ruined, and with them the economy. It's a well-known tale of greed and hubris. But is that what actually happened? What went on? What was the outcome and why? Join me on the Boom & Bust podcast to find out. Subscribe on all major platforms.