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February 1999
THE IC BUBBLE
Inside:
The South-Sea Bubble
The Peter Principle —
7 Million Online Traders Can’t
All Be Wrong
Getting Excited At Home |
Charts:
Yahoo!
Amazon.com
Schwab
At Home |
Long, long ago, in an
economy far, far away, normally sober men of business and
trade became involved in a bout of speculative enthusiasm that
is still talked about today. The episode was known as the
South-Sea Bubble. The upstanding merchants of London town and
thereabouts can be forgiven, however, for getting carried away
because banking, paper money, stocks and shares were all new.
Even the Prince of Wales got excited. Nobody understood then
that there were limits to what could be accomplished using
these new wonders of commerce. In other words, way back in
1720, investments, paper ones that is, could not grow to the
sky. It was a painful lesson. Such a thing could never happen
again. Could it? Not with paper anyway.
This time it is different.
As was pointed out in our March 1998 issue by that very name,
money has evolved from flocks of sheep, cattle and oxen to
gold coins, gold bars and the paper that represented claims on
them, and finally, into the system we enjoy today, one of
electrons and photons, spinning and whirring at the speed of
light from where buyers store them to where sellers count
them. Gold coins went out of circulation in the 1930s. Silver
followed thirty years later and now we are poised on the verge
of an era where cash itself may go the way of the $20 gold
piece. (Incidentally, such a coin has about $285 worth of gold
in it.)
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IC Bubble", in its entirety as a PDF. To view PDF
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