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Wurzel Of Highbridge

Tulips Mania

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Tulip mania or tulipomania (Dutch names include: tulpenmanie, tulpomanie, tulpenwoede, tulpengekte and bollengekte) was a period in the Dutch Golden Age during which contract prices for bulbs of the recently introduced tulip reached extraordinarily high levels and then suddenly collapsed.[2]

By 1636 tulips were traded on the exchanges of numerous Dutch towns and cities. This encouraged trading in tulips by all members of society; Mackay recounted people selling or trading their other possessions in order to speculate in the tulip market, such as an offer of 12 acres (49,000 m2) of land for one of two existing Semper Augustus bulbs, or a single bulb of the Viceroy that was purchased for a basket of goods (shown at right) worth 2,500 florins.[31]

Many individuals grew suddenly rich. A golden bait hung temptingly out before the people, and, one after the other, they rushed to the tulip marts, like flies around a honey-pot. Every one imagined that the passion for tulips would last for ever, and that the wealthy from every part of the world would send to Holland, and pay whatever prices were asked for them. The riches of Europe would be concentrated on the shores of the Zuyder Zee, and poverty banished from the favoured clime of Holland. Nobles, citizens, farmers, mechanics, seamen, footmen, maidservants, even chimney sweeps and old clotheswomen, dabbled in tulips.[6]

Pamphlet from the Dutch tulipomania, printed in 1637

The increasing mania contributed several amusing, but unlikely, anecdotes that Mackay recounted, such as a sailor who mistook the valuable tulip bulb of a merchant for an onion and grabbed it to eat. The merchant and his family chased the sailor to find him "eating a breakfast whose cost might have regaled a whole ship's crew for a twelvemonth". The sailor was jailed for eating the bulb.[6] This anecdote is unlikely if only because, like most Liliaceae bulbs, tulips are somewhat poisonous, and taste quite differently from onions.[34]

People were purchasing bulbs at higher and higher prices, intending to re-sell them for a profit. However, such a scheme could not last unless someone was ultimately willing to pay such high prices and take possession of the bulbs. In February 1637, tulip traders could no longer find new buyers willing to pay increasingly inflated prices for their bulbs. As this realization set in, the demand for tulips collapsed, and prices plummeted—the speculative bubble burst. Some were left holding contracts to purchase tulips at prices now ten times greater than those on the open market, while others found themselves in possession of bulbs now worth a fraction of the price they had paid. Mackay claims the Dutch devolved into distressed accusations and recriminations against others in the trade.[6]

In Mackay's account, the panicked tulip speculators sought help from the government of the Netherlands, which responded by declaring that anyone who had bought contracts to purchase bulbs in the future could void their contract by payment of a 10 percent fee. Attempts were made to resolve the situation to the satisfaction of all parties, but these were unsuccessful. The mania finally ended, Mackay says, with individuals stuck with the bulbs they held at the end of the crash—no court would enforce payment of a contract, since judges regarded the debts as contracted through gambling, and thus not enforceable by law.[6]

Property Mania or propamania (Dutch names include: housenmanie, houseomanie, housenwoede, housengekte and propengekte) was a period in the British Golden Age during which contract prices for property of the recently introduced London Financial District reached extraordinarily high levels and then suddenly collapsed.

By 2008 properties were traded in the estate agents of numerous British towns and cities. This encouraged trading in property by all members of society; Mackay recounted people selling or trading their other possessions in order to speculate in the housing market, such as an offer of 12 acres (49,000 m2) of land for one of two existing flats in London, or a single flat in London that was purchased for a basket of goods (shown at right) worth 25 million pounds 31]

Many individuals grew suddenly rich. A golden bait hung temptingly out before the people, and, one after the other, they rushed to the estate agents, like flies around a honey-pot. Every one imagined that the passion for houses would last for ever, and that the wealthy from every part of the world would buy property in London, and pay whatever prices were asked for them. The riches of Europe would be concentrated on the shores of London, and poverty banished from the favoured clime of London. citizens, farmers, mechanics, seamen, footmen, maidservants, even chimney sweeps and old clotheswomen, dabbled in property 6]

Pamphlet from an estate agent printed in 2013

The increasing mania contributed several amusing, but unlikely, anecdotes that Mackay recounted, such as a sailor who mistook the valuable flat of a merchant for a home and grabbed it to live in. The merchant and his family rented it to the sailor to find him "eating a breakfast whose cost might have regaled a whole months rent". The sailor was jailed for enjoying the quiet peace.[6] This anecdote is unlikely if only because, like most properties, flats are somewhat cramped, and are quite differently from homes.[34]

People were purchasing property at higher and higher prices, intending to re-sell them for a profit. However, such a scheme could not last unless someone was ultimately willing to pay such high prices and take possession of the properties. In February 2015, property traders could no longer find new buyers willing to pay increasingly inflated prices for their bulbs. As this realization set in, the demand for property collapsed, and prices plummeted—the speculative bubble burst. Some were left holding contracts to purchase property at prices now ten times greater than those on the open market, while others found themselves in possession of properties now worth a fraction of the price they had paid. Mackay claims the British devolved into distressed accusations and recriminations against others in the market [6]

In Mackay's account, the panicked property speculators sought help from the government of the EU, which responded by declaring that anyone who had bought contracts to purchase property in the future could void their contract by payment of a 10 percent fee. Attempts were made to resolve the situation to the satisfaction of all parties, but these were unsuccessful. The mania finally ended, Mackay says, with individuals stuck with the property they held at the end of the crash—no court would enforce payment of a contract, since judges regarded the debts as contracted through gambling, and thus not enforceable by law.[6]

The government of the day intervened in the market to attempt to prop up the price of tulip bulbs, as the government did not want the tulip bulb speculators to get upset not the banks to lose money on the bulbs. This intervention ultimately cost the country dearly as every resource was used to try and prop up the unsustainable market.

At the time it was obvious to many that to attempt to prop up such an unsustainable market was a fallacy, but since the majority were speculators they continued their policy of propping up the market until all resources were used and the bankrupted Brittan.

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The government of the day intervened in the market to attempt to prop up the price of tulip bulbs, as the government did not want the tulip bulb speculators to get upset not the banks to lose money on the bulbs. This intervention ultimately cost the country dearly as every resource was used to try and prop up the unsustainable market.

At the time it was obvious to many that to attempt to prop up such an unsustainable market was a fallacy, but since the majority were speculators they continued their policy of propping up the market until all resources were used and the bankrupted Brittan.

much the same happened with the railway bubble. it took the 2nd collapse to end the madness.

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much the same happened with the railway bubble. it took the 2nd collapse to end the madness.

At least we got railways though, and canals and a lot of that infrastructure is still in use today.

If someone wants to build a railway now, it has to be a government financed project.

I would even tolerate a housing "bubble" if it err.. actually got lots of housing built.

You know, that is what is supposed to happen under capitalism and free markets, capitalists spot an opportunity, fill the demand, then tend to overdo it and we get the subsequent crash.

"Boom and bust" are part of capitalism and essential to its operation.

Edited by Secure Tenant

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"Boom and bust" are part of capitalism and essential to its operation.

250 years of industrial capitalism meets 950 years of feudal landlordism. Who wins?

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Can anyone recommend a good book that details the various bubbles and subsequent crashes through history...?

Extraordinary popular delusions and the madness of crowds (published 1841, written by Mackay). It shows how this housing bubble is EXACTLY a well repeated tale in history . I read it first in the early 90's.

Edited by Sir Harold m

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Extraordinary popular delusions and the madness of crowds (published 1841, written by Mackay). It shows how this housing bubble is EXACTLY a well repeated tale in history . I read it first in the early 90's.

Agree, I too read it many moons ago - but the difference is that this bubble is looking to be multi-generational in the UK. I woudl class it as starting in the late 70's, with mini crashes or dips along the way, but no real bubble bursting. How does one as an individual avoid falling victim to a multi-generational bubble?

Only emigration or withdrawal from the economy.

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Can anyone recommend a good book that details the various bubbles and subsequent crashes through history...?

This small book was easy to read. ;)

270746.jpg

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The mania phase of the housing bubble has burst.

Mr Ponzi is still in his office offering riches beyond dreams, because, government has decided Mr Ponzi is really on to something, and it would all work out if only the banks would continue to leverage money they dont have into the scheme.

Commenting yesterday, Mr Ponzi added "If the government doesnt force the banks to lend or persuade people that they really will miss this opportunity, there will need to be tanks on the streets to protect my organisation".

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This small book was easy to read. ;)

Also try:

A Very English Deceit: The Secret History of the South Sea Bubble by Malcolm Balen.

It only focuses on one bubble but it is brilliantly written.

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He made one of my favourite quotes

The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness

This small book was easy to read. ;)

270746.jpg

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  • 241 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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