Tulip Fever -

For these newly rich merchants, a social hierarchy was needed. While spices were for cooking and silks for wearing, the tulip became the ultimate status symbol. It was exotic, rare, and difficult to propagate. To own a particularly rare variety was to announce to the world that you had arrived.

Panic spread faster than the tulip mosaic virus. Suddenly, no one showed up to the tavern auctions. Contracts that had been worth a year's salary became worthless overnight. Sellers couldn't find buyers at 10% of the previous day's prices. Tulip Fever

Historical records tell of a single bulb of the 'Semper Augustus' variety being sold for 6,000 guilders. To put this in perspective, the average annual income of a skilled craftsman was about 300 guilders. A well-to-do merchant might earn 1,500 guilders a year. Thus, one bulb was worth the lifetime earnings of several men. For these newly rich merchants, a social hierarchy

The exact catalyst is debated. Some say a buyer defaulted at an auction in Haarlem. Others suggest the market was simply saturated—sellers finally outnumbered buyers. But on February 5, 1637, the bubble burst. To own a particularly rare variety was to

is not just a history lesson; it is a behavioral warning. As long as humans have greed and fear, we will have bubbles.