QUICK SUMMARY FORMAT

BUBBLE SPOTTING SERIES - 2014

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.

Semper Augustus – the most

expensive bulb sold during

the height of the mania

wikicommons

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.

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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.