Tulip Mania

1637 CE — Low Countries, Dutch Republic

Today: The Dutch Republic (Amsterdam)

In the wealthy Dutch Republic, contracts for rare tulip bulbs spiraled to insane prices on pure speculation — a single bulb could reportedly cost more than a canal-side house — before the market collapsed almost overnight. Whether or not every lurid detail is true, it became the West's first great cautionary tale of a bubble.

Worth knowing: At the peak of the mania, one prized tulip bulb reportedly traded for the cost of a grand Amsterdam house — and its coveted color-streaks, we now know, were caused by a plant virus.

Pattern: Mania & panic — A speculative belief detaches asset prices from fundamentals; the belief breaks and prices collapse.

Entry 167 of 240 in Precedent, a walk through the whole human story in order.