US was discovered because of speculation

I came across this interesting noteon speculative bubbles from  Kevin J. Lansing of San Francisco Fed. The note discusses some historical links between speculative bubbles, technological innovation, and capital misallocation.

What caught my eye was this para in the end:

Regarding the merits of speculation, Meeker (1922, p. 419), the economist of the New York Stock Exchange, wrote: “Of all the peoples in history, the American people can least afford to condemn speculation….The discovery of America was made possible by a loan based on the collateral of Queen Isabella’s crown jewels, and at interest, beside which even the call rates of 1919-1920 look coy and bashful. Financing an unknown foreigner to sail the unknown deep in three cockleshell boats in the hope of discovering a mythical Zipangu [land of gold] cannot, by the widest exercise of language, be called a ‘conservative investment.'”

(Note: Wikipedia entry provides more details on Queen Isabella)

So, US was discovered because of speculation. Not bad!

One Response to “US was discovered because of speculation”

  1. » US was discovered because of speculation Says:

    […] [Technorati] Tag results for finance wrote an interesting post today onHere’s a quick excerpt I came across this interesting noteon speculative bubbles from  Kevin J. Lansing of San Francisco Fed. The note discusses some historical links between speculative bubbles, technological innovation, and capital misallocation. What caught my eye was this para in the end: Regarding the merits of speculation, Meeker (1922, p. 419), the economist of the New York Stock Exchange, wrote: “Of all the peoples in history, the American people can least afford to condemn speculation….The discovery of Am […]

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