What was the Tulip mania?
In 1593 tulips started being imported to Holand and soon became a symbol of royality and wealth. This developed into a so called tulip mania and a tulip exchange was established in Amsterdam.
In 1636 single tulip bulb (Viceroy variety) was worth 8000lbs of wheat, 16 000lbs of rye, 4 oxen, 8 swine, 12 sheep, 2 hogsheads of wine, 4 tons of beer, 2 tons of butter, 1000 lbs of cheese, bed, suit and s silver goblet.
The highest price was reached in 1637 when a single tulip bulb (Semper Augustus variety) cost 6 000 florins. At that time average yearly wage in Holland was 150 florins. This means that one bulb was worth 40 times more than a regular yearly income. If we wanted to measure it in dollars, today it would be about $1.8 million!!
Tulip mania is the first ecnomic bubble in history. It is great example of how the psychology in market works and that if lot of people believe in something th price can reach insane values.