Tulipmania

Tulipmania

1. Q: When did the Bubble begin and end? A: Began: November 12,1636. Ended: May 1, 1637 2. Q:What was the cause of the Bubble and what broke the Bubble? A: Cause: Tulip prices rose in holland so people began buying tulips to sell in Holland and make money (investments) What broke it: Buyers would not pay the high prices and sellers were left holding the bulbs. 3. Q: What was life like during the Bubble? Be very specific and find specific examples provide some economic indicators to show how great the economy was. A: During tulipmania, "tulips were the center of life", prices rose at such a quick rate that from november 12-December 12 the price rose from $10-$160. 4. Q: What happened after the Bubble? Be very very specific and find specific examples. provide some economic indicators to show how great the economy was. A: After the bubble, people lost confidence in the government, the market, and future investments. 5. Q: What role did credit play in the beginning of the Bubble? A: Sellers sold tulips on credit. "It was the high prices and breaking of contracts that characterized this famous yet puzzling events. 6. Q: What role did the government play before and after the crisis A:"The panicked tulip speculators sought help from the government 7: Q: In your opinion, why was it said that this event/bubble was different? A: We think it was said that this event/bubble was different because it was a specific and random product rather than something like the Roaring 20's. 8: Q: What was done after the bubble burst? What did they do to ensure this would not happen again? A: After the tulipmania burst, a compromise was brokered that let most traders settle their debts for a fraction of their liability. Rules were further set that would prevent buyers from defaulting on their payment as easily.

Tulipmania was a period in the 1630's in which the price of single tuip bulbs was inflated greater than anyone would have predicted. It began on November 12,1636 and ended on May 1, 1637. During the time period, acres of tulips in Europe would sell for up to 100 times their previous value. The whole tulipmania bubble rose in Hollad, where people began buying tulips to sell in Holland to make money. It was their version of a modern day investment. It bubble burst when buyers decided that they didnt want to pay the high prices and sellers were left holding onto the tulip bulbs and accumulated huge inventories. During the bubble, "tulips were the center of life", prices rose at such a quick rate that from november 12- december 12 the prices rose from $10-$160 per bulb. Once the bubble collapsed, people lost confidence in the Dutch government, the market, and future investments. The entire tulipmania bubble caused many economic problems. One cause of the was that sellers sold tulips on credit, and many people were not able to pay back the high prices that were agreed to in the contracts. Because of these problems, the Dutch government intervined many times, and, "the panicked tulip speculators sought help from the government', unfortunately it was to no avail. The tulipmania bubble was different from any other event/bubble because the buying and selling of tulips is such a random event, versus something such as the Roaring 20's. To ensure another bubble would not arise, a compromise was brokered that let most traders settle their debts for a fraction of their liability. Rules were further set that would prevdnt buyers from defaulting on their payment as easily.