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http://www.stock-market-crash.net/tulip-mania.htm

Could a mere tulip bulb be worth $76,000? It is if people are willing to pay for it! It may sound preposterous, but this is exactly what happened in Holland in the 1630’s.

The seeds of this craze were planted in 1593. A man by the name of Conrad Guestner imported the first tulip bulb into Holland from Constantinople, in present day Turkey. After a few years, tulip bulbs became a status symbol and a novelty for the rich and famous. Eventually, tulip bulbs became a hot ticket item in neighboring Germany, as well. After some time, a few tulip bulbs contracted a non-harmful plant virus called mosaic. The effects of this mosaic virus were tulip petals with beautiful “flames” of color. This unique effect furthermore increased the value of the already rare and highly exclusive tulip bulb.

Initially, only the true connoisseurs bought tulip bulbs, but the rapidly rising price quickly attracted speculators looking to profit. It didn’t take long before the tulip bulbs were traded on local market exchanges, which were not unlike today’s stock exchanges. By 1634, tulip mania had feverishly spread to the Dutch middle class. Pretty soon everybody was dealing in tulip bulbs, looking to make a quick fortune. The majority of the tulip bulb buyers had no intentions of even planting these bulbs! The name of the game was to buy low and sell high, just like in any other market. The whole Dutch nation was caught in a sweeping mania, as people traded in their land, livestock, farms and life savings all to acquire 1 single tulip bulb!

In less than one month, the price of tulip bulbs went up twenty-fold! To put that into perspective, if you had invested $1,000 and came back on month later, your investment would have ballooned to $20,000! Now you can understand the mad rush to buy tulip bulbs at any cost. Tulip bulb mania affected the public psyche to an extreme. One drunk man in a bar started peeling and eating what he thought was an onion, while it was in fact it was the bar owner's tulip bulb on display. This man was jailed for many months!

tulipomania.gif

History nothing to learn from it.

Apart from where all greedy bar stewards who'll believe any get rich quick scheme.

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Out of interest how long did it take for tulips to get back to peak prices?

Would you have done okay if you were in it for the long term?

Current prices seem to be around £1 per bulb:

http://www.thompson-morgan.com/search.html...mp;search=tulip

I've no idea how that equates to the prices above but I'll bet it's somewhat less!

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The Bernie Cornfelds of the eighteenth century sensed an opportunity.

Noticing how rapidly South Sea Company’s shares were running

up, swindlers formed hundreds of “bubble companies” that had

little or no business purpose other than to peddle their own stock.

One company was set up “for trading in hair.” Another, which was

trying to raise £1 million when it was outlawed, proposed to manufacture

a perpetual-motion machine. A third was established “for the

transmutation of quicksilver into a malleable fine metal.” Since quicksilver,

or mercury, is a liquid at any temperature above –38 degrees

Fahrenheit, turning it into a solid metal would have been quite an

accomplishment.

Perhaps the most remarkable scam was a company with no stated

purpose at all. The prospectus coyly hinted that the company had

been organized “for carrying on an undertaking of great advantage,

but nobody to know what it is.” For every £2 invested, the promoter

declared that subscribers would be entitled to £100 a year in dividends—

a 50 to 1 return. Dazzled by this unsubstantiated promise, a

throng of people showed up at the entrepreneur’s door the morning

after the offering circular was published. In six hours, he collected

£2000.

Having raked in a tidy sum for a day’s work, the promoter,

according to Charles Mackay, “was philosopher enough to be contented

with his venture, and set off the same evening for the Continent.

He was never heard of again.”

:lol:

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Current prices seem to be around £1 per bulb:

http://www.thompson-morgan.com/search.html...mp;search=tulip

I've no idea how that equates to the prices above but I'll bet it's somewhat less!

It would be funny if your link to that site led to it going up in ranking and selling a lot more tulips, with the result that the price went up and then... well you know the rest.

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Perhaps if hyperinflation kicks in those that held onto the bulbs could be making a killing?

No, you can't eat them so, come the Zimbabwean style post-credit crunch dystopia, they won't be worth anything. Maybe a literal killing since they're poisonous IIRC, definitely not a financial one though.

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Current prices seem to be around £1 per bulb:

http://www.thompson-morgan.com/search.html...mp;search=tulip

I've no idea how that equates to the prices above but I'll bet it's somewhat less!

To be fair, that's the price for common varieties. Rare bulbs are considerably more expensive - (check out the Lord Stanley here: http://www.oldhousegardens.com/bulb.asp?Cat=TU&page=5) although admittedly even $26 for 1 bulb is not equivalent to the crazy prices paid during Tulipomania.

UM

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reminds me of this ..

In China, a Million Fall For Ant Farm Ponzi Scheme

http://www.nysun.com/foreign/in-china-a-mi...i-scheme/69460/

reminded me of Japanese poodle scam!

when the news came out last year I fell off laughing!!!

http://www.metro.co.uk/news/article.html?i...p;in_page_id=34

with th right tools, one can sell ice to eskimos.

In case of BTL Housing bubble, its obvious that Fed, BoE, UK/ USA Banks & Governments with help of media carried out the scam! unfortunately most of us will pay the price.

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I have never understood the tulip mania. How was the bubble created? Was there a shortage?

I think you could draw parallels to the housing bubble, everyone wanted one and at any cost. If you didn't join the housing bubble you got left behind whilst everyone appeared to get rich. How many times have you read that people wanted to get onto the housing ladder at any cost, even lying on their loan application forms. Once you have mania it's very hard to stop what's going on. However at some point the bubble bursts and people realised the price being asked isn't what it's worth.

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I think you could draw parallels to the housing bubble, everyone wanted one and at any cost. If you didn't join the housing bubble you got left behind whilst everyone appeared to get rich. How many times have you read that people wanted to get onto the housing ladder at any cost, even lying on their loan application forms. Once you have mania it's very hard to stop what's going on. However at some point the bubble bursts and people realised the price being asked isn't what it's worth.

Yeah but I can understand people wanting to buy a house because you can live in it and people feared they would forever be priced out and renting. But a tulip!?!

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reminded me of Japanese poodle scam!

The one that was a complete invention lazily regurgitated by copypaste masquerading as journalism?

http://www.snopes.com/critters/lurkers/poodlesheep.asp

Aside from its basic implausibility, a number of other details toll the death knell for this version of the legend:

+ This astounding story seems to have completely escaped the notice of the news media in Japan (where it should be receiving the greatest amount of coverage), and police in Sapporo say they have not heard of the scam.

+ The company identified as the outfit behind the sheep-as-poodles swindle, Poodles As Pets, doesn't seem to exist in Sapporo (or anywhere else in Japan).

+ As Cerebral Soup! points out, the very same story was posted as a blog entry (in Japanese) back inFebruary 2006.

Edited by ParticleMan
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Yeah but I can understand people wanting to buy a house because you can live in it and people feared they would forever be priced out and renting. But a tulip!?!

I agree it's insane but the mania generated huge profits for a time as people believed in it. A bit like the fantasy that the poor could afford mortgages.

Completely implausible but enough people believed in it to part with the cash.

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I agree it's insane but the mania generated huge profits for a time as people believed in it. A bit like the fantasy that the poor could afford mortgages.

Completely implausible but enough people believed in it to part with the cash.

Do you know of any good books on it? I fancy reading up on it.

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  • 444 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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