Tulipmania chronicles one of the first major market manias. Since the tulip bulb trading bubble in the 17th century there have been numerous market bubbles, and it is a product of human nature. One of the most memorable recent examples is the internet stock bubble of the late 1990's, which saw the Nasdaq run up to giddy heights before crashing back down to reality. The recent US housing bubble is also called to mind, likewise the astronomical Chinese stock market bubble in 2007. So given the recurrence and poignancy of market bubbles and crowd psychology it pays to look back in time to one of the first major market bubbles to both marvel and learn. This is a great markets/economic history documentary.
Imagine a craze as potent as the wildest stock market boom, a commodity as precious as gold. This was Tulipmania which gripped 17th century Amsterdam. The tulip appeared in Europe in the mid-16th century, and imported luxury from turkey – a delicately formed and vividly coloured flower that was viewed as exotic and alluring. ‘Tulip Mania’ was a rapid rise in the price of tulip bulbs notably between 1634 and 1637. The frantic trading of the tulip bulb was triggered when a market in tulip futures was opened to speculate on bulbs not yet reared. This was initially restricted to professional growers and experts but slowly engulfed ordinary middle class and poorer families. Everyone wanted a part of the excitement and eventually Tulipmania turned the entire economy of a rich and prosperous nation upside down. Men murdered for them and the Amsterdam stock exchange began dealing in tulips instead of stock and shares. In 1637 when doubts arose whether prices could possibly continue to climb, the market collapsed, sweeping away fortunes. The tulip rush was over and never again has anything so frenzied and potent been witnessed. As quickly as it arrived, Tulipmania disappeared – almost overnight.
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Finance Documentaries: http://www.financedocumentaries.com/2011/11/tulipmania.html