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This short presentation on the Dutch Tulip Crisis forms part of
a larger presentation on Market Bubbles
Front page graphic - Flickr - The shifted librarian
Tulips were introduced to the Dutch in
1593 by a botanist, Carolus Clusius, who
brought the bulbs from Constantinople
(now Istanbul, Turkey).
BACKGROUND
www.dwc.knaw.nl/biografie/clusius/
These new exotic flowers quickly
grabbed the imagination of the people –
so much so that his own neighbours
apparently broke in to his house in order
to steal some bulbs.
Tulips quickly became a luxury must-have
for the rich and wealthy, and tulip farms
sprung up all over.
Investors traded tulip bulbs on what
effectively were Futures Markets,
making fortunes for themselves in the
process.
In 1934 speculators joined the market.
The increased demand from speculators
caused the market to hit a peak during
the winter of 1636–37, during which
time it is rumoured that some bulbs
changed hands 10 times per day.
At the high of the craze,
a single tulip bulb was
worth about ten times acraftsman’s annual income.
There is a famous story about a hungry
sailor, who mistook one of these
expensive bulbs for a small onion, and
ate it with his fish for breakfast. The
bulb’s owner was furious and had him
dragged to court, where he was
promptly jailed for several months.
A single Viceroy (type of tulip) bulb
could (allegedly) be swopped for :
Two lasts of wheat Twelve fat sheep 1,000 lb. of cheese
Four lasts of rye Two hogsheads of wine A complete bed
Four fat oxen Four tuns of beer A suit of clothes
Eight fat swine Two tons of butter A silver drinking cup
The Tulip craze also spread to other
countries.
The collapse started in February 1637,
when traders refused show up for an
auction. Panic spread and that was the
beginning of the end.
Unfortunately limited data is available
on the exact impact of the crash, but
suffice it to say that significant fortunes
were lost in the aftermath.
Dutch Tulip Bulb Mania (Bubble) –Sources and further reading
http://www.investopedia.com/features/crashes/crashes2.asp
http://www.economist.com/blogs/freeexchange/2013/10/economic-history
http://www.thebubblebubble.com/tulip-mania/
http://www.damninteresting.com/the-dutch-tulip-bubble-of-1637/
http://www.thetulipomania.com/
http://en.wikipedia.org/wiki/Tulip_mania
This presentation is provided in the sake of public interest, and has been compiled based on publically available
information sources on the web.
While great care has been taken in the preparation and compilation of information indicated here, the author does
not accept any legal or other liability for any inaccuracy, mistake, misstatement or any other error of whatsoever
nature contained herein.
This presentation is not investment advice, not a solicitation for any type of investment, financial or otherwise, nor
is this presentation an opinion expressed on, nor endorsement of markets, commodities or investments.
Any names, trademarks and images are copyright their respective owners and rights in the graphic artwork and
photos used in this presentation belongs to, and are courtesy of the respective owners thereof. Unless where
otherwise indicated, I don’t claim to have any rights therein.