The housing market has collapsed and the economic forecast is grim, but as my partner remarked the other day, it's no different from Tulipomania.
Tulips first caught on in a big way at the start of the 17th century, when French women began wearing them in corsarges. The fashion spread quickly to the Low Countries, and in due course, the Dutch were seized with tulip frenzy. Huge sums of money changed hands for small beds of tulips, and the bulbs themselves became a kind of currency, with many buying them at inflated prices purely to sell them on. People abandoned perfectly good jobs to cultivate the flower and others speculated in tulip shares; fashionable women began wearing fabrics depicting the sought-after flower. Then, in February 1637, the prices skyrocketed beyond all reason, and the bubble burst.
Journalist Charles Mackay later renewed public interest in Tulipomania in his book Extraordinary Popular Delusions and the Madness of Crowds (1841). Another event that Mackay covered was the frenzy of speculation on The South Sea Company in the early years of the 18th century, leading to the famous South Sea Bubble (see above left for an illustration from Mackay's book of headlong fools plunging into South Sea water). At its peak in 1720, people invested in a company that advertised its business as: 'carrying out an undertaking of great advantage, but nobody to know what it is'.
Any of this sound familiar? Rest assured, history does repeat itself...