February 3rd - Tulip Mania Collapses

On this day, in 1637, the bottom fell out of the market for tulip bulbs in what is now known as the Netherlands (aka the Nether-regions). This collapse occurred after the price of the bulbs skyrocketed because of market frenzy and a common phenomena known as "a bad idea". This rise and fall of the bulb market is remembered by the name Tulipmania. It was followed by an unsuccessful sequel Tulipmania 2: The Windmills of Crazy.

Tulipmania occurred during the Dutch Golden Age, which is when Dutch art, science and trade were the most renowned in the world. The Dutch have never seen the likes of those days again, and they never will.

Tulipmania (known informally as "the mania") caused tulip bulb prices to reach stupidly high prices. No one is saying the Dutch are stupid but they sure are stupid. At its peak the mania caused people to buy single tulip bulbs for theequivalent of ten times the annual income of a skilled craftsman. Maybe the Dutch didn't pay their skilled craftsmen very well. We may never know the truth as long as we ignore the copious research that has been done into this time of Dutch madness. Dutch madness is also the Dutch name for road rage that occurs on bicycles. Many people have been victims of Dutch madness and have ended up with oily streaks on their trousers and helmet hair.

The tulip was introduced to the Dutch in 1593. It became popular as a luxury item and status symbol. It supplanted the coveted position held by the bicycle and the much desired golden bicycle. However, no amount of desire can justify the whacky behaviour of the Dutch.

Some of the items exchanged for a single tulip bulb were, two tons of butter, a suit of clothes, twelve fat sheep, one thousand golden bicycles, and one windmill stacked on top of another windmill.

Until recently the explanation of the mania has been that of speculative madness. The market got caught up in the moment like a kid in a candy store and went a bit mad. They should try to be more rational like a kid in a tulip store. This speculative madness explanation is now challenged by modern market analysis.

Modern researchers think that the prices paid for tulip bulbs weren't really crazy (also known as Dutch crazy). The market was alreadybuoyant due to a lull in the Thirty Years war, and the hyacinth market also experienced the same pattern of extreme rise and fall. Even today flower bulbs can command Dutch crazy prices because of their beauty, rarity, and effective marketing campaign. In this century, bulbs have sold for hundreds of thousands of dollars, which would equate to a little over twelve fat sheep or a thousand golden bicycles.

Tulipmania has been cited as the first instance of a speculative bubble and the term is used to describe any modern speculative bubble. So even if the Dutch have never achievedanything else, and they haven't, they achieved that.