Bullish on Bulbs

Tulipmania
Tanvi gupta

The Year 1593.no one in Holland has ever heard of the tulip. Early 1630sdestinies
get rewritten, fortunes exchange hands, the rich get richer, the Smiths catch up with the
Jonesall for the want of a tulip.
Introduced in the first decade of the 17th century, very soon, horticultural experimenting
created many new breeds of tulips in Holland. Clusius tulips caused a sensation with
their beauty and rarity. Very soon these exotic flowers became the symbols of power and
prestige in the country.
When the middle-income groups realized that this was actually an easy-money scheme
how much the rich spent on the flowers and how high the margins were in the trade was
when the idea germinated in their minds. All they had to do was plant the bulb, nurture it
and soon enough they could reap the benefits of their toilliterally.
The trade was so successful that, that soon enough the entire Dutch society was in the
tulip-trade. There were even futures and options for bulbs not yet sown. Bulbs were sold
by weight, usually while they were still in the ground. The buying and selling of a
product as invisible as un-sprouted flowers came to be called the "wind trade." as the
speculative prices were being made up out of thin air. People were desperate to cash in on
the bulb-trading frenzy! Small businesses were sold and family jewels were traded.
People sold their homes, their property, everything they had to cash in on the frenzy.
Local governments tried unsuccessfully to outlaw this commerce. The bottom fell out of
the market during 1637, when a gathering of bulb merchants could not get the usual
inflated prices for their bulbs. Word quickly spread, and the market crashed. Thousands
of Dutch businessmen, many among the country's leading economic agents, were ruined
in less than two months' time! After the market crashed in 1637, bankrupting many, the
era came to be known as "Tulipmania" or "Tulipomania."
While the frenzy lasted the prices of the bulbs actually hit a $14,000 (current market
price). But that is not to say that the Dutch love story with the flower is overfar from it.
Though the margins have come back to ground level, the saga continues. The flower
originally brought to the country by Carolus Clusius, director of the Royal Medicinal
Garden in Vienna, who successfully raised the first European tulips during the 16th
century, tulips are still a b(l)ooming industry in Holland.