History is littered with examples of economic bubbles during which assets including commodities, land and stocks rapidly inflated in price well above their intrinsic value. These bubbles were invariably followed by a crash when investors, no longer willing to pay high prices, panic and sell en masse, resulting in a sudden collapse in prices and tears all round. Read all about the biggest and most notorious speculative US bubbles of all time.

Founded in 1684, the French-owned Company of the Indies, originally called the Mississippi Company, held a monopoly over trade in North America and the West Indies. Enticed by exaggerated claims of wealth in Louisiana, which was meant to be abundant with precious metals and animal skins, according to Scottish economist John Law, speculators poured crazy sums of money into the company in 1719.

Within the space of a year, the share price rose 1,900% and the value of the enterprise increased to $6.7 trillion in today's money. But when investors learned of the failure of the South Sea Company, they went in their droves to convert their share certificates to coins, and the bubble ended up rupturing in late 1720.

America's first real estate bubble led to the Panic of 1819, the first peacetime financial crisis in US history. European demand for American agricultural goods such as cotton, tobacco, and flour reached fever pitch in 1815 following the end of the Napoleonic Wars. This grew further in 1816, the so-called Year Without a Summer, which devastated harvests on the old continent. 

Speculators scrambled to secure loans to purchase farmland in the Southern and frontier states, and the largely unregulated banks were only too willing to oblige. As a result, land prices soared. By 1818, however, European agriculture had recovered and demand for US goods plummeted. Real estate prices fell by half, and when the banks called in the loans many investors were unable to pay up, catapulting the US economy into crisis.

History repeated itself in the US during the 1830s. America's banks were dishing out paper money loans like candy to all and sundry, and this easily available credit fueled a number of bubbles, from land to cotton and enslaved people. In 1836 President Andrew Jackson (pictured) issued an executive order demanding that public land be paid in gold and silver rather than paper money.

The executive order restricted credit and led to falling land sales and prices, which burst the various bubbles and culminated the following year in a biting depression. The nationwide economy shrunk by over 40% from 1837 to 1843, which makes the downturn following the Panic of 1837 the worst in US history, more damaging in a relative sense than the Great Depression of the 1930s.

Spurred on by the Californian Gold Rush of 1849, which flooded the US economy with money, a railway, land and stock market bubble inflated in the US during the 1850s. Banks readily lent investors enormous loans and the stock market surged, but when the amount of gold mined started to decline in the mid-1850s, financial institutions and investors alike lost confidence.

The failure of a major New York commodities firm and Ohio bank in 1857 triggered a large-scale sell-off and run on the banks, bursting the bubble. The sinking of the SS Central America, which was carrying vast quantities of gold to help offset the panic, intensified the crisis and credit dried up. The downturn that followed was felt worldwide, making the Panic of 1857 the first real global economic crisis.

A toxic combo of external speculation, easy credit and soaring property values set off a major real estate bubble in Florida during the early 1920s. Holidaying in warmer climes had become fashionable and, as the Sunshine State was largely undeveloped at the time, speculators rushed in to buy up land to construct vacation homes and hotels. In fact, the real estate market was so popular that the Miami Herald became the heaviest newspaper in the world in 1922 because of the sheer number of property adverts inside it.

Land prices skyrocketed and money flowed in from investors across America, but in 1925 a series of negative press reports, along with a railway embargo and investigation by the IRS, spooked investors and land prices went south, rupturing the bubble. Developments such as Aladdin City and Fulford-by-the-Sea were left unfinished and the state's economy floundered.

Financial speculation was rife throughout America during the 1920s. Exciting new technologies from automobiles and aeroplanes to radio and cinema, a construction boom and developments such as mass production worked wonders on the US economy; more people than ever were investing in stocks and shares, many of which were purchased on credit, so-called buying 'on margin'.

Needless to say, the stock market exploded. The Dow Jones Industrial Average (known as the Dow) increased six-fold over the decade and share prices hit record levels. But this unprecedented bull market was thoroughly unsustainable, and when confidence vanished in late October 1929 it collapsed spectacularly. The crash resulted in the Great Depression as the GDP of the US contracted by 33% and unemployment hit 25%.

Fed by a succession of corporate mega-mergers and other factors including favorable interest rates and deregulation, stock markets around the world rallied big-time in the mid 1980s. The Dow, for instance, doubled in value from 1986 to 1987. By the latter half of 1987, however, investors became increasingly concerned that global stock markets were overvalued.

To anticipate a slowdown and limit their losses, investors turned to new trading tools such as portfolio insurance and index arbitrage, but instead of of protecting their investments, these strategies helped trigger a mass sell-off on Black Monday, 19 October 1987, which reverberated around the planet, bursting the bubble and crashing stock markets globally.

During the 1990s a sort of mass hysteria gripped investors, particularly in the US, as the internet began to become widely adopted. Overly eager to invest in just about any company in the burgeoning online sector, investors, who were egged on wholeheartedly by the banks, threw insane amounts of money at internet start-ups.

Many of the newfangled companies were listed on the Nasdaq, which saw its index surge by 400% from 1995 to 2000. But a large number of these firms were seriously overvalued. Investors became increasingly resistant to the hype, and the house of cards came crashing down in 2000. Notable casualties of the crash include Pets.com and Worldcom.

Starting in 2001, a tremendous real estate bubble blew up in the US. It peaked in 2006. A multitude of reasons have been posited by experts as to how the bubble developed, from historically low interest rates and deregulation, to an obsession among Americans for home ownership and risky lending practices by the likes of Fannie Mae (officially the Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corp).

After house prices reached their zenith in 2006, prices dropped precipitously, triggering the subprime mortgage crisis, which left many homeowners in negative equity and led to a record number of foreclosures. The crisis in turn was a major factor in the credit crunch and Great Recession, which lasted from 2007 to 2009 and spread around the world.

Now read about the biggest company losses of all time