|
I’ve struggled to find an explanation for tulip mania, but there are some hints at it. It’s important to realize that the Dutch monarchy was spending themselves into incredible debt for these explorations, and the lenders expected them to return with huge amounts of gold and silver like the Spanish. They came up empty on that, so the monarchy and the financiers had to find a way to convince the world that what they did have was even more valuable, and an efficient mechanism to offload the debt. They created the most advanced financial system the world had ever seen, including a futures market that allowed for cash-free asset purchases without violating usury laws of the church. The asset was a new technology by which one could replicate precious minerals in their own garden, and of course selective breeding would eventually discover a way to mass-produce petals of gold. The alchemists had it all wrong, killing themselves with dangerous chemicals. And you didn’t even need any money to participate. All you needed to do was ‘buy’ a lucky bulb future, and then sell it to somebody else before the bill came due. The church blesses it, and the king demands it. I had some early beanie babies. They were cheap, well-made, and safe toys for toddlers, a real hit. Then Ty cut supply and the first free market for collectibles ever, opened on this mysterious technology called the Internet. Normal people sold their baby toys for double (still a shipping loss) to new parents, and then double again to eBay reselling businesses, then speculators and criminals blowing their PayPal, a new self-sovereign internet currency that was air-dropped to any new email address, and only a tiny fraction going to the weirdo collectors featured in magazines. There will always be people that will bet more than they have, if you let them. If casinos started offering loans, would we call it a blackjack chip bubble? |