Basic Details
Location: Holland (Netherlands)
Time: 1610s – 1637
The Incident
It is one of the first and most prominent incidents of an economic bubble.
The Tulipa (Tulipa Gesneriana) was introduced to Holland, which attracts the crowd rush to purchase (Some are actual buyers, but the majority are trying to make money), leading to a price spike, the Tulipa become expensive.
The Tulip Mania could divide into four stages, supply and demand unbalance, speculators get involved in the market, civilians whose lack capital and market blow-up.
- Supply and Demand Unbalance (the 1610s)
- Initially, the price of tulip is in a high price tag, captivate the eyeballs of plant lovers (Low supply and high demand)
- Speculator (1634)
- The speculator discovered the demand would continue to rise, tulip in different cities is getting more and more popular (Demand continues to increase)
- Civilian
- When the rumour and news are spreading between the crowd, they are trying to get into the game, sell out their tools and property, every item that can exchange of money to purchase the tulip.
- At some points, it is hard to purchase the tulips, then the vast majority moving to target the options trading. In which, purchase to receive the tulips in the future.
- Market Blow-up
- February 1637, the price suddenly drops. People who are holding the contract and tulips could not find buyers.
Most people at last found out that the price wasn’t worth their expectations, ending this incident. Some people get richer, but more people get broke and into debt.
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