Wilhelmine Germany’s Amazing Stock Bubble

FRED, the greatest economic statistics database in the known universe, added a bunch of wacky historical data today. We can see the massive spike in beef and veal consumption of 1933, induced by the Agricultural Adjustment Act. And we can also see this stupendous stock bubble in the early days of the German Empire:

As a bit of history here, Germany only existed as a cultural/linguistic concept rather than a political entity until quite recently. But in the decades after the Napoleonic wars, the Kingdom of Prussia came to exercise a hegemonic influence over those portions of the German-speaking world that were neither part of Switzerland nor part of the Habsburg-ruled Austro-Hungarian Empire. In 1870, Prussia led a coalition of German states to glorious victory in the Franco-Prussian War, and then King Wilhelm proclaimed himself Kaiser of a unified German Empire.

These heady events seem to have led to some irrational exuberance about the performance of German equities, followed by a massive crash. Fully forty years later prices hadn’t really gone up from their bubble peak.