1 00:00:00,120 --> 00:00:03,760 Speaker 1: Fellow Ridiculous historians, we are on the high seas, and 2 00:00:04,160 --> 00:00:09,160 Speaker 1: as a result, we are doing a run of classics here. Guys, 3 00:00:09,440 --> 00:00:12,560 Speaker 1: remember cryptocurrency back when it was tulips. 4 00:00:12,920 --> 00:00:15,440 Speaker 2: Well that's very meta, man, I'm having to parse that 5 00:00:15,520 --> 00:00:17,840 Speaker 2: one out. Yeah, it's still around, but it certainly was 6 00:00:17,880 --> 00:00:21,239 Speaker 2: a time where it was the beanie baby of our era. 7 00:00:21,360 --> 00:00:23,680 Speaker 2: And now the beanie baby of our era is la 8 00:00:23,760 --> 00:00:25,600 Speaker 2: Boo boo. So I don't even know where to start 9 00:00:25,600 --> 00:00:26,480 Speaker 2: with all of this stuff. 10 00:00:26,680 --> 00:00:30,760 Speaker 1: Oh my gosh, yeah, yeah, Noel. Back in twenty eighteen, 11 00:00:31,080 --> 00:00:34,519 Speaker 1: you and I asked each other what happened with the 12 00:00:34,640 --> 00:00:40,640 Speaker 1: Dutch Republic and tulips. It's often used as a textbookcase 13 00:00:41,040 --> 00:00:45,839 Speaker 1: in marketing classes the world round. But is this tulip 14 00:00:45,960 --> 00:00:50,560 Speaker 1: mania truly an economic boom and bust? We're gonna find out. 15 00:00:50,840 --> 00:00:51,760 Speaker 1: Mm hmm yep. 16 00:00:51,920 --> 00:00:55,920 Speaker 2: Let's talk about speculative flowers on Ridiculous History. 17 00:00:59,200 --> 00:01:27,200 Speaker 1: Ridiculous History is a production of iHeartRadio. Originally it was 18 00:01:27,280 --> 00:01:31,200 Speaker 1: called the Dull Band because of it's so called resemblance 19 00:01:31,280 --> 00:01:34,319 Speaker 1: to a turban, and then it was called the Tulbent 20 00:01:34,600 --> 00:01:38,200 Speaker 1: in Turkey, and then it was called the Tulip in France. 21 00:01:38,360 --> 00:01:41,640 Speaker 1: And then in the fifteen seventies it was called the 22 00:01:41,720 --> 00:01:45,160 Speaker 1: tulbe Today we call it the tulip ben. So you're 23 00:01:45,160 --> 00:01:50,360 Speaker 1: telling me it's not because it resembles tulips pairs together. Apparently, 24 00:01:50,520 --> 00:01:52,720 Speaker 1: you know, all this is in the eye of the beholder, Noll. 25 00:01:52,800 --> 00:01:56,360 Speaker 1: But in this case, the name comes from the resemblance 26 00:01:56,400 --> 00:01:59,520 Speaker 1: to a turban. That's right, because it came from the 27 00:01:59,560 --> 00:02:03,480 Speaker 1: continent of Asia, right it did. It came from Western Asia, 28 00:02:03,560 --> 00:02:08,360 Speaker 1: from Turkey. And the earliest known instance of a tulip 29 00:02:08,560 --> 00:02:13,120 Speaker 1: flowering in cultivation they were just growing wild beforehand, is 30 00:02:13,160 --> 00:02:18,800 Speaker 1: in fifteen fifty nine a guy named Johann Heinrich Herwart 31 00:02:19,200 --> 00:02:22,359 Speaker 1: grew the tulip. I don't know if you're a fan 32 00:02:22,400 --> 00:02:26,000 Speaker 1: of flowers or if our super producer, Casey Pegram is 33 00:02:26,040 --> 00:02:27,040 Speaker 1: a fan himself. 34 00:02:28,520 --> 00:02:32,000 Speaker 2: Well, Casey Pegrim is a flower in the desert, as 35 00:02:32,040 --> 00:02:33,520 Speaker 2: far as I'm concerned. 36 00:02:33,120 --> 00:02:36,680 Speaker 1: A rose in the concrete, Yes, exactly exactly. So what 37 00:02:36,760 --> 00:02:39,400 Speaker 1: about you, Noel are you? Would you say you're pro flower? 38 00:02:39,680 --> 00:02:43,639 Speaker 2: Well I am, but I kill them so I am 39 00:02:43,680 --> 00:02:46,280 Speaker 2: more of a succulent guy, because they're a little more, 40 00:02:47,280 --> 00:02:50,480 Speaker 2: a little more sturdy, shall we say, aka, a little 41 00:02:50,480 --> 00:02:53,200 Speaker 2: more resilient, and I don't kill them quite as often, 42 00:02:53,280 --> 00:02:54,920 Speaker 2: but I still manage. I still manage. 43 00:02:55,240 --> 00:02:58,760 Speaker 1: Yeah, succulents will be more hearty, for sure. I always 44 00:02:58,760 --> 00:03:01,520 Speaker 1: thought one of the toughest flowers grow was the orchid. 45 00:03:01,760 --> 00:03:04,120 Speaker 1: I only know one person who has a magic touch 46 00:03:04,120 --> 00:03:05,960 Speaker 1: with orchids, and that's my mother. I don't know how 47 00:03:06,000 --> 00:03:06,760 Speaker 1: she does it. 48 00:03:06,760 --> 00:03:08,200 Speaker 2: It's cause she's made a magic bend. 49 00:03:08,280 --> 00:03:12,600 Speaker 1: She's made of magic perhaps, and she would be making 50 00:03:12,680 --> 00:03:16,920 Speaker 1: a mint allegedly had she gone into the tulip game 51 00:03:17,160 --> 00:03:20,360 Speaker 1: at a certain point in time. Because nowadays, it's pretty 52 00:03:20,360 --> 00:03:23,160 Speaker 1: easy to buy tulips. You could go to your local nursery, 53 00:03:23,200 --> 00:03:26,840 Speaker 1: you can go to your local even a hardware store 54 00:03:26,880 --> 00:03:29,000 Speaker 1: will have some tulips for sale often. 55 00:03:29,080 --> 00:03:32,040 Speaker 2: Yeah, Like I think a dozen or so bulbs I 56 00:03:32,120 --> 00:03:35,560 Speaker 2: found online for about eighteen dollars or something. And you 57 00:03:35,600 --> 00:03:38,760 Speaker 2: know that's for every possible type of variety you could 58 00:03:38,800 --> 00:03:42,680 Speaker 2: think of. We're talking about a time where the price 59 00:03:42,720 --> 00:03:48,760 Speaker 2: of tulip bulbs just went completely bonkers, absolutely bananas. 60 00:03:49,040 --> 00:03:52,760 Speaker 1: So I propose we tackled today's episode in the following way. 61 00:03:53,560 --> 00:03:57,880 Speaker 1: Let's tell the story that's most familiar to everyone, and 62 00:03:57,920 --> 00:04:01,560 Speaker 1: then let's after that see how much of this stacks up. 63 00:04:01,720 --> 00:04:03,920 Speaker 1: You know what the fact and the fiction actually are. 64 00:04:04,160 --> 00:04:05,560 Speaker 2: That's the only way to do it, ben. 65 00:04:05,400 --> 00:04:09,680 Speaker 1: Yeah, all right. So, in the early seventeenth century, the 66 00:04:09,800 --> 00:04:12,840 Speaker 1: Dutch Republic experienced what a lot of people will tell 67 00:04:12,840 --> 00:04:18,039 Speaker 1: you was the first example of an economic boom and bust. Right, 68 00:04:18,120 --> 00:04:20,279 Speaker 1: we know about this kind of stuff here in the 69 00:04:20,360 --> 00:04:23,440 Speaker 1: US today with the housing bubble that burst in two 70 00:04:23,520 --> 00:04:27,320 Speaker 1: thousand and eight. We know about this in various other 71 00:04:27,480 --> 00:04:31,120 Speaker 1: points in time, but people will tell you that the 72 00:04:31,240 --> 00:04:35,479 Speaker 1: Dutch Republic in the early seventeenth century, the sixteen hundreds 73 00:04:35,680 --> 00:04:40,800 Speaker 1: experienced the very first recorded economic bust and it was 74 00:04:40,920 --> 00:04:47,560 Speaker 1: called toulip Mania to lipmania to Lipmania. So what happens exactly. 75 00:04:47,440 --> 00:04:51,520 Speaker 2: Well, it all revolves around the idea of speculation. Speculation 76 00:04:51,760 --> 00:04:55,400 Speaker 2: being predicting what something will be worth in the future 77 00:04:55,640 --> 00:04:57,960 Speaker 2: and placing your bets that it will be worth that 78 00:04:58,320 --> 00:05:01,720 Speaker 2: or more, and then the bottom out potentially when that 79 00:05:01,880 --> 00:05:09,920 Speaker 2: speculative price reaches completely disproportionate heights with the thing itself. 80 00:05:10,120 --> 00:05:12,120 Speaker 1: Does that make sense, Yeah, yeah, and all of a 81 00:05:12,160 --> 00:05:16,839 Speaker 1: sudden becomes overvalued or people realize it's overvalued for a 82 00:05:16,880 --> 00:05:18,960 Speaker 1: series of reasons that we'll get into yes, yeah, for 83 00:05:18,960 --> 00:05:22,560 Speaker 1: a series of reasons that can vary depending on the 84 00:05:23,000 --> 00:05:29,039 Speaker 1: specific cases. In the case of tulips, essentially, the way 85 00:05:29,080 --> 00:05:31,200 Speaker 1: you'll hear this story pitch is that people in the 86 00:05:31,279 --> 00:05:36,360 Speaker 1: Dutch Republic went absolutely bonkers for tulips, began paying exorbitant 87 00:05:36,560 --> 00:05:39,480 Speaker 1: rates for them, that it gripped the country and then 88 00:05:39,520 --> 00:05:44,720 Speaker 1: eventually that's the sound of a bubble popping. But how 89 00:05:44,720 --> 00:05:47,320 Speaker 1: do we get here? What made tulip so popular? 90 00:05:47,600 --> 00:05:49,600 Speaker 2: Let it starts earlier than this fellow, but he's kind 91 00:05:49,640 --> 00:05:53,440 Speaker 2: of the main dude that really introduced tulip culture into 92 00:05:53,760 --> 00:05:57,640 Speaker 2: the Netherlands. His name was corlus Clusius, and he created 93 00:05:57,680 --> 00:06:01,960 Speaker 2: a very very influential guard and at the University of Leiden, 94 00:06:02,000 --> 00:06:06,040 Speaker 2: and that was in the late fifteen hundreds. He started 95 00:06:06,080 --> 00:06:10,359 Speaker 2: this kind of tradition among horticulturists which became kind of 96 00:06:10,360 --> 00:06:14,919 Speaker 2: a gentlemanly pursuit of trading, you know, clippings and seeds 97 00:06:15,240 --> 00:06:18,520 Speaker 2: and all kinds of tulip related things bulbs between each 98 00:06:18,560 --> 00:06:22,600 Speaker 2: other in the interest of kind of spreading this tradition around. 99 00:06:22,760 --> 00:06:25,000 Speaker 2: But it was within a very small set of very 100 00:06:25,000 --> 00:06:29,360 Speaker 2: particular types of learned individuals, right. But then it kind 101 00:06:29,400 --> 00:06:32,279 Speaker 2: of started getting a little bit out of control, and 102 00:06:32,480 --> 00:06:36,360 Speaker 2: instead of just doing trades, these folks who had the 103 00:06:36,400 --> 00:06:40,240 Speaker 2: tulip bulbs started charging money for them, and then members 104 00:06:40,279 --> 00:06:42,719 Speaker 2: of the merchant class, for example, who wanted to flaunt 105 00:06:42,920 --> 00:06:45,480 Speaker 2: their newfound wealth. Because this was kind of a relatively 106 00:06:45,520 --> 00:06:48,400 Speaker 2: new class of people that could afford the finer things 107 00:06:48,440 --> 00:06:50,120 Speaker 2: in life. In this part of the country, they were 108 00:06:50,160 --> 00:06:55,000 Speaker 2: experiencing boom times, they decided they wanted to get in 109 00:06:55,080 --> 00:06:59,240 Speaker 2: on this craze because these flowers were very beautiful, and 110 00:06:59,320 --> 00:07:04,119 Speaker 2: some of them, particular that had kind of miscolored discolorations 111 00:07:04,160 --> 00:07:06,480 Speaker 2: almost they were even more desirable. 112 00:07:06,560 --> 00:07:09,560 Speaker 1: They were like rare POGs or pokemon exactly, and you 113 00:07:09,600 --> 00:07:12,320 Speaker 1: have to catch them all. Yes. So this this guy, 114 00:07:12,520 --> 00:07:18,760 Speaker 1: Carolus Clusius, got this whole craze going around fifteen ninety three. 115 00:07:18,920 --> 00:07:22,840 Speaker 1: And tulips had several strong advantages that made that set 116 00:07:22,880 --> 00:07:26,120 Speaker 1: them apart from other flowers of the time. First, and 117 00:07:26,160 --> 00:07:28,200 Speaker 1: we need to emphasize this, as you said earlier in 118 00:07:28,240 --> 00:07:32,320 Speaker 1: nol they had these intense colors that other plants in 119 00:07:32,360 --> 00:07:36,640 Speaker 1: the area just didn't have. Secondly, and perhaps even more importantly, 120 00:07:37,360 --> 00:07:40,480 Speaker 1: it turns out that tulips can grow pretty well in 121 00:07:40,560 --> 00:07:45,080 Speaker 1: this climate. This area the Dutch Republic doesn't have very 122 00:07:45,120 --> 00:07:48,160 Speaker 1: good soil for you know, most of the country. And 123 00:07:48,240 --> 00:07:51,360 Speaker 1: it turns out that tulips love what is called poor soil. 124 00:07:51,880 --> 00:07:55,880 Speaker 1: So not only can you have these beautiful, striking flowers, 125 00:07:56,280 --> 00:07:59,960 Speaker 1: but you can actually grow them in a successful man 126 00:08:00,160 --> 00:08:01,920 Speaker 1: in a place where you know, a lot of other 127 00:08:01,920 --> 00:08:03,119 Speaker 1: flowers wouldn't grow. 128 00:08:03,440 --> 00:08:05,160 Speaker 2: Here's the thing, though, Ben, and I didn't know this 129 00:08:05,240 --> 00:08:08,600 Speaker 2: at all. Tulips take a really long time to grow. 130 00:08:08,680 --> 00:08:11,280 Speaker 2: It's true. Yeah, so you can do it with seeds, 131 00:08:11,680 --> 00:08:15,280 Speaker 2: but seeds. Tulips grown from seeds take like up to 132 00:08:15,480 --> 00:08:18,320 Speaker 2: six or seven years to grow. And then you have 133 00:08:18,400 --> 00:08:20,800 Speaker 2: I guess what would be the same as like making 134 00:08:20,800 --> 00:08:23,160 Speaker 2: a clone of any other type of plant, but it's 135 00:08:23,200 --> 00:08:25,800 Speaker 2: a bulb. I guess it's called an offshoot, I believe, Ben, 136 00:08:26,480 --> 00:08:29,680 Speaker 2: and those only take three or four years, maybe even 137 00:08:29,680 --> 00:08:32,440 Speaker 2: two years if I'm not mistaken. And that was what 138 00:08:32,800 --> 00:08:35,360 Speaker 2: people wanted. And here's the thing that's also interesting about 139 00:08:35,400 --> 00:08:38,080 Speaker 2: this whole story is that it kind of introduced some 140 00:08:38,120 --> 00:08:41,960 Speaker 2: of the concepts surrounding futures trading, right because you're not 141 00:08:42,160 --> 00:08:46,360 Speaker 2: buying a full grown tulip, because you can't uproot a 142 00:08:46,400 --> 00:08:49,120 Speaker 2: full grown tulip or it will die. You have to 143 00:08:49,160 --> 00:08:52,840 Speaker 2: wait until the summer. When they go dormant, they literally 144 00:08:52,880 --> 00:08:56,080 Speaker 2: go back down into these bulbs, and only then can 145 00:08:56,120 --> 00:08:59,360 Speaker 2: you dig them up. So people, these merchants, these aristocrats, 146 00:08:59,400 --> 00:09:02,319 Speaker 2: these whomever that were just going wild for these tulips 147 00:09:03,320 --> 00:09:06,920 Speaker 2: had to buy the promise of a future tulip right. 148 00:09:07,200 --> 00:09:11,720 Speaker 1: They would sign contracts before a notary to buy tulips 149 00:09:11,760 --> 00:09:14,120 Speaker 1: at the end of the dormant season, which was from 150 00:09:14,200 --> 00:09:17,920 Speaker 1: June to roughly September, that's when you could actually pull 151 00:09:17,960 --> 00:09:23,559 Speaker 1: them out of the ground. And because of this, the Dutch, 152 00:09:23,559 --> 00:09:26,920 Speaker 1: who had already developed a lot of techniques of modern finance, 153 00:09:27,520 --> 00:09:33,080 Speaker 1: created this durable goods futures market for tulip bulbs. And 154 00:09:34,200 --> 00:09:40,080 Speaker 1: it went insane pretty quickly, you know, because you're not 155 00:09:40,120 --> 00:09:42,959 Speaker 1: buying tulips today, you're buying tulips tomorrow. 156 00:09:42,679 --> 00:09:45,839 Speaker 2: Now glad they pay you tuesday for a hamburger today, 157 00:09:45,880 --> 00:09:46,880 Speaker 2: only the other way around. 158 00:09:47,360 --> 00:09:50,040 Speaker 1: And then when you hear that other people in the 159 00:09:50,080 --> 00:09:55,520 Speaker 1: market are paying increasingly extravagant prices, then you start to 160 00:09:55,600 --> 00:09:58,440 Speaker 1: move with the market as well, whether you are selling, 161 00:09:58,480 --> 00:10:02,560 Speaker 1: whether you are buying, whether you are just trading tulip futures. 162 00:10:02,840 --> 00:10:05,480 Speaker 2: Yeah, and let's remember too that these were not native 163 00:10:05,640 --> 00:10:09,600 Speaker 2: to the Netherlands, and so they were already relatively scarce 164 00:10:09,880 --> 00:10:14,120 Speaker 2: because they take so long to grow. They weren't just overflowing, right. 165 00:10:14,240 --> 00:10:17,400 Speaker 2: There was a scarcity and a rare quality to them, 166 00:10:17,640 --> 00:10:20,400 Speaker 2: and that is what drives that kind of gotta have 167 00:10:20,480 --> 00:10:23,280 Speaker 2: them all mentality. Right, Yeah, if anyone could have them, 168 00:10:23,280 --> 00:10:24,120 Speaker 2: no one would care. 169 00:10:24,200 --> 00:10:29,600 Speaker 1: Right exactly, kind of like hammer Pants in the nineteen eighties. 170 00:10:29,840 --> 00:10:31,640 Speaker 1: I don't know, I think we're both too young to 171 00:10:31,720 --> 00:10:35,560 Speaker 1: really deliver that reference. I just remember him, see hammer 172 00:10:35,920 --> 00:10:38,760 Speaker 1: So we said fifteen ninety three, this is when it 173 00:10:38,800 --> 00:10:43,079 Speaker 1: starts catching on the early adopters, right, the learned fans 174 00:10:43,120 --> 00:10:48,160 Speaker 1: of flowerdom and horticulture start buying up tulips. By sixteen 175 00:10:48,480 --> 00:10:54,560 Speaker 1: thirty three. In some transactions, tulip bulbs actually replace currency. 176 00:10:55,160 --> 00:11:01,080 Speaker 1: History Mike Dash found documentation of actual properties being sold 177 00:11:01,120 --> 00:11:04,840 Speaker 1: for what he said were handfuls of tulip bulbs. And 178 00:11:04,880 --> 00:11:08,040 Speaker 1: then more and more people heard the sort of friend 179 00:11:08,120 --> 00:11:12,040 Speaker 1: of a friend of a friend's stories about someone who 180 00:11:12,080 --> 00:11:14,880 Speaker 1: got into the market, bought and sold tulips, and now 181 00:11:14,880 --> 00:11:18,040 Speaker 1: they're set for life. And by that same year, sixteen 182 00:11:18,120 --> 00:11:21,000 Speaker 1: thirty three, when this stuff is really escalating, a single 183 00:11:21,120 --> 00:11:25,360 Speaker 1: bulb of a tulip variety called Simper Augustus was already 184 00:11:25,400 --> 00:11:28,079 Speaker 1: worth five five hundred guilders. 185 00:11:28,840 --> 00:11:31,920 Speaker 2: Yeah, and Simper Augustus is that one with the with 186 00:11:31,960 --> 00:11:34,840 Speaker 2: the stripes. It's got kind of red flame like stripes 187 00:11:34,880 --> 00:11:37,880 Speaker 2: on it. And this is super interesting. It turns out 188 00:11:37,880 --> 00:11:42,760 Speaker 2: that what causes that condition is actually a virus. Yes, yeah, 189 00:11:42,760 --> 00:11:45,560 Speaker 2: it's correct. And no one knew how to breed them 190 00:11:45,600 --> 00:11:47,439 Speaker 2: to I mean, I've known breeds not the right word 191 00:11:47,440 --> 00:11:49,960 Speaker 2: to cultivate them to look like that. So they tried 192 00:11:50,000 --> 00:11:51,800 Speaker 2: all kinds of crazy stuff, didn't they then. 193 00:11:51,880 --> 00:11:57,040 Speaker 1: Yeah, they tried. They tried a ton of very strange things. 194 00:11:57,080 --> 00:11:59,319 Speaker 1: They would let's see what was one of them. They 195 00:11:59,360 --> 00:12:01,760 Speaker 1: buried it in a certain type of mud. 196 00:12:01,960 --> 00:12:04,959 Speaker 2: Yeah, there was a pigeon dung i believe, or pigeon 197 00:12:05,280 --> 00:12:07,679 Speaker 2: iguana or whatever you want to call it. Pigeon poop poop. 198 00:12:07,720 --> 00:12:09,319 Speaker 2: There you go, that's the right word. That's the science. 199 00:12:09,360 --> 00:12:12,360 Speaker 2: That's the science word. They also would even tie like 200 00:12:12,440 --> 00:12:15,280 Speaker 2: a red and a white together and then bury them 201 00:12:15,440 --> 00:12:18,000 Speaker 2: in the hopes that they would somehow commingle and create 202 00:12:18,240 --> 00:12:21,280 Speaker 2: yea tulip b osmosis very much so. My favorite is 203 00:12:21,320 --> 00:12:24,280 Speaker 2: they would sprinkle the soil with pigments that they would 204 00:12:24,320 --> 00:12:26,800 Speaker 2: hope would somehow seep into the soil, and you know, 205 00:12:26,800 --> 00:12:28,960 Speaker 2: there was they didn't know what they were doing, no. 206 00:12:29,000 --> 00:12:31,520 Speaker 1: But they were just trying different things exactly. I think 207 00:12:31,600 --> 00:12:35,760 Speaker 1: most people at the time would have made similar attempts. 208 00:12:36,320 --> 00:12:38,040 Speaker 1: Those are just a few examples we know of, but 209 00:12:38,120 --> 00:12:41,360 Speaker 1: we know that there were many other techniques, most of 210 00:12:41,400 --> 00:12:46,319 Speaker 1: which were cartoonish failures. And this just made these failures 211 00:12:46,400 --> 00:12:50,000 Speaker 1: just made the specific types of high end tulips even 212 00:12:50,200 --> 00:13:00,760 Speaker 1: more appealing. Now we see the market explodeving. You would 213 00:13:00,800 --> 00:13:03,920 Speaker 1: think maybe that by sixteen thirty three someone would have 214 00:13:03,960 --> 00:13:06,880 Speaker 1: looked around, seen a Simper Augustus bulb and said, I 215 00:13:06,920 --> 00:13:10,680 Speaker 1: don't think this is really worth five thousand, five hundred guilders. 216 00:13:10,960 --> 00:13:13,200 Speaker 1: But no, the bubble kept growing. 217 00:13:13,760 --> 00:13:18,840 Speaker 2: Yeah, and we actually had situations where these deals were 218 00:13:18,840 --> 00:13:22,600 Speaker 2: being made in back rooms of like inns and pubs 219 00:13:22,600 --> 00:13:25,520 Speaker 2: and stuff, and it was all pretty organized. They apparently 220 00:13:25,520 --> 00:13:28,600 Speaker 2: are these smoke filled rooms where people were getting their 221 00:13:28,679 --> 00:13:32,679 Speaker 2: drink on and their smoke on, and they had like 222 00:13:32,720 --> 00:13:35,280 Speaker 2: these pieces of wood that they would write they would 223 00:13:35,400 --> 00:13:39,839 Speaker 2: essentially bid on these tulip lots, and it was like, 224 00:13:39,920 --> 00:13:42,400 Speaker 2: I don't know. I saw this fantastic video series on 225 00:13:42,480 --> 00:13:44,280 Speaker 2: YouTube that I was telling you about Ben that I 226 00:13:44,320 --> 00:13:47,640 Speaker 2: think you had seen two on a channel called Economics Decoded. 227 00:13:48,080 --> 00:13:50,679 Speaker 2: And the guy I don't see his name here, he 228 00:13:50,679 --> 00:13:52,839 Speaker 2: doesn't really announce himself for lower third himself, but he 229 00:13:52,880 --> 00:13:55,679 Speaker 2: does a fantastic job with illustrations and sound effects, and 230 00:13:55,679 --> 00:13:57,040 Speaker 2: I really recommend checking it out. It is a three 231 00:13:57,040 --> 00:14:01,360 Speaker 2: part series on tulimania, and he liked it to if 232 00:14:01,400 --> 00:14:04,640 Speaker 2: when we had to go and buy a stock, if 233 00:14:04,640 --> 00:14:07,079 Speaker 2: we had to literally have a conversation with a bunch 234 00:14:07,080 --> 00:14:10,439 Speaker 2: of dudes in a smoky room and arrive at an 235 00:14:10,440 --> 00:14:13,400 Speaker 2: agreed upon price, because we take for granted how quickly 236 00:14:13,440 --> 00:14:17,000 Speaker 2: information travels these days, and how the price of things 237 00:14:17,000 --> 00:14:20,160 Speaker 2: are just set, it's understood by algorithm. 238 00:14:19,760 --> 00:14:22,240 Speaker 1: Or they change it in almost uniform manner. 239 00:14:21,920 --> 00:14:25,080 Speaker 2: Totally uniform, Whereas this was like a series of mini 240 00:14:25,160 --> 00:14:28,000 Speaker 2: markets in different parts of the country that were pretty 241 00:14:28,000 --> 00:14:31,000 Speaker 2: isolated because you could only get information to another part 242 00:14:31,240 --> 00:14:33,560 Speaker 2: as fast as a guy could ride there on a horse, 243 00:14:33,640 --> 00:14:38,160 Speaker 2: right exactly. That's that's true. That's that's something that we 244 00:14:38,360 --> 00:14:43,120 Speaker 2: can easily forget in the modern age of microsecond transactions 245 00:14:43,160 --> 00:14:48,280 Speaker 2: and AI quote unquote helping people trade stocks. So the 246 00:14:48,320 --> 00:14:53,840 Speaker 2: way the story goes is that this craze continues. By 247 00:14:53,920 --> 00:14:58,800 Speaker 2: sixteen thirty five, you could see records of forty bulbs, 248 00:14:58,840 --> 00:15:03,360 Speaker 2: just forty bulbs sold for one hundred thousand guilders or florins, 249 00:15:03,920 --> 00:15:06,360 Speaker 2: and by way of comparison at that time, in the 250 00:15:06,400 --> 00:15:11,600 Speaker 2: same year, one ton of butter costs around one hundred guilders, 251 00:15:12,040 --> 00:15:15,920 Speaker 2: and someone who was a pretty skilled laborer, someone who 252 00:15:15,960 --> 00:15:19,000 Speaker 2: practiced a trade of some sort, like a blacksmith or 253 00:15:19,080 --> 00:15:21,840 Speaker 2: a ferrier or something, they might earn as much as 254 00:15:21,880 --> 00:15:25,080 Speaker 2: one hundred and fifty to three hundred and fifty guilders 255 00:15:25,240 --> 00:15:29,440 Speaker 2: a year. So this is a massive amount of money involved. 256 00:15:29,760 --> 00:15:34,920 Speaker 2: And I really enjoy the part in the Tulipmania series 257 00:15:35,000 --> 00:15:40,119 Speaker 2: on Economics Decoded where he walks us through the strange 258 00:15:40,280 --> 00:15:47,160 Speaker 2: occurrence of February sixteen thirty seven. At this point, the 259 00:15:47,280 --> 00:15:50,680 Speaker 2: price of a single Simper Augustus bulb that was worth 260 00:15:50,720 --> 00:15:54,360 Speaker 2: five thy five hundred gilders in sixteen thirty three is 261 00:15:54,920 --> 00:16:01,440 Speaker 2: easily worth ten thousand guilders. The center cannot hold. Things 262 00:16:01,480 --> 00:16:04,760 Speaker 2: are going to fall apart. Right, That's not what shinua 263 00:16:04,800 --> 00:16:07,760 Speaker 2: Achebe was talking about in his book, but you can 264 00:16:07,800 --> 00:16:11,320 Speaker 2: see how this applies. And so according to the story, 265 00:16:11,640 --> 00:16:17,680 Speaker 2: the tulip market crashes very very quickly, and people start 266 00:16:17,760 --> 00:16:21,880 Speaker 2: to reneg on those contracts that they had signed. So 267 00:16:22,240 --> 00:16:26,520 Speaker 2: someone would say, look, you owe me this much money 268 00:16:26,560 --> 00:16:29,400 Speaker 2: for these tulips, and they would just refuse to pay. Yeah, 269 00:16:29,400 --> 00:16:32,040 Speaker 2: And they got into a real sticky situation where the 270 00:16:32,240 --> 00:16:35,920 Speaker 2: sellers had the tulips now at that delivery period where 271 00:16:35,920 --> 00:16:37,960 Speaker 2: they'd gotten out of the ground, and there's only a 272 00:16:37,960 --> 00:16:40,600 Speaker 2: limited amount of time before they are going to not 273 00:16:40,680 --> 00:16:43,680 Speaker 2: be viable anymore, that they have to rebury them. But 274 00:16:44,360 --> 00:16:46,840 Speaker 2: nobody's like accepting them. People are like, no, I don't 275 00:16:46,840 --> 00:16:48,840 Speaker 2: want them, I'm not going to pay you. And I 276 00:16:48,880 --> 00:16:51,920 Speaker 2: think small claims court got involved where they they had 277 00:16:51,920 --> 00:16:55,280 Speaker 2: to essentially get the courts to help them come up 278 00:16:55,320 --> 00:16:59,960 Speaker 2: with a system of you know, repayment that was agreeable 279 00:17:00,600 --> 00:17:03,160 Speaker 2: by both parties and ended up being a small percentage 280 00:17:03,240 --> 00:17:06,200 Speaker 2: of three percent of the price promised or where. Because 281 00:17:06,200 --> 00:17:09,880 Speaker 2: again these futures and again this wasn't really exactly futures 282 00:17:09,920 --> 00:17:11,639 Speaker 2: trading It was sort of like some of the same 283 00:17:12,280 --> 00:17:15,320 Speaker 2: style of economics as futures trading, but future trading has 284 00:17:15,560 --> 00:17:18,280 Speaker 2: protections built in that this just didn't. And this is 285 00:17:18,359 --> 00:17:20,240 Speaker 2: kind of just like the wild West, and so you 286 00:17:20,240 --> 00:17:22,520 Speaker 2: wouldn't pay full price and you'd get like a you 287 00:17:22,520 --> 00:17:27,040 Speaker 2: would get a deal because you're taking on risk your 288 00:17:27,440 --> 00:17:29,800 Speaker 2: tulip might not turn out, and you don't get to 289 00:17:29,800 --> 00:17:31,720 Speaker 2: just say, oh, my tulip didn't turn out, I'm not 290 00:17:31,760 --> 00:17:35,840 Speaker 2: going to pay for it. That's technically not allowed, even 291 00:17:35,880 --> 00:17:37,439 Speaker 2: though that's kind of what these people were doing. But 292 00:17:37,480 --> 00:17:39,119 Speaker 2: it wasn't about the tulip not turning out. It was 293 00:17:39,119 --> 00:17:42,080 Speaker 2: more about the whole system kind of falling. Yeah, well, 294 00:17:42,119 --> 00:17:44,040 Speaker 2: you don't pay full price, you pay a little bit 295 00:17:44,119 --> 00:17:47,000 Speaker 2: less because you're soaking up some of that risk for 296 00:17:47,240 --> 00:17:47,960 Speaker 2: the grower. 297 00:17:48,440 --> 00:17:48,680 Speaker 3: Yeah. 298 00:17:48,840 --> 00:17:51,760 Speaker 1: Yeah, And there's an interesting step here that I want 299 00:17:51,800 --> 00:17:55,960 Speaker 1: to make sure we don't miss. Because of the precipitous 300 00:17:56,080 --> 00:18:01,520 Speaker 1: rise the price of tulip's, most speculators by sixteen thirty 301 00:18:01,560 --> 00:18:05,399 Speaker 1: seven couldn't afford to buy even the cheapest tulips, and 302 00:18:05,560 --> 00:18:09,320 Speaker 1: this is what triggered the collapse in demand. And then 303 00:18:09,359 --> 00:18:13,719 Speaker 1: when the demand disappeared, the flowers quickly became worth maybe 304 00:18:13,880 --> 00:18:16,720 Speaker 1: ten percent of what they had been worth the day 305 00:18:16,920 --> 00:18:21,480 Speaker 1: or the week before. And this sounds funny, this sounds 306 00:18:21,480 --> 00:18:24,920 Speaker 1: like some sort of Doctor Seus's parable, But the real 307 00:18:24,960 --> 00:18:27,320 Speaker 1: time effect and the real life effect of this is 308 00:18:27,359 --> 00:18:32,400 Speaker 1: that people encountered financial catastrophe. People's lives were ruined when 309 00:18:32,400 --> 00:18:35,840 Speaker 1: the tulip trade collapsed, and as you said, with the 310 00:18:36,240 --> 00:18:42,119 Speaker 1: courts getting involved, these vicious fights over debt continued for 311 00:18:42,240 --> 00:18:46,200 Speaker 1: years and years and years, and thus the Tulip Boom 312 00:18:46,240 --> 00:18:49,280 Speaker 1: and Bust of the Dutch Republic became one of the 313 00:18:49,320 --> 00:18:53,719 Speaker 1: most well known financial cautionary tales in the Western world 314 00:18:54,320 --> 00:18:59,920 Speaker 1: until about nineteen eighty when people realized that there might 315 00:18:59,920 --> 00:19:03,600 Speaker 1: be bored to the story, because it turns out that 316 00:19:04,359 --> 00:19:09,119 Speaker 1: the story we just related to you, ridiculous historians is 317 00:19:09,240 --> 00:19:14,240 Speaker 1: primarily based on a work of a Scottish journalist named 318 00:19:14,320 --> 00:19:17,840 Speaker 1: Charles McKay. In eighteen forty one, he wrote a book 319 00:19:17,880 --> 00:19:23,000 Speaker 1: called Extraordinary Popular Delusions and the Madness of Crowds. He 320 00:19:23,240 --> 00:19:27,680 Speaker 1: sourced his story about this tulip Boom and Bust from 321 00:19:27,720 --> 00:19:31,280 Speaker 1: a guy named Johann Beckman, who in seventeen ninety seven 322 00:19:31,320 --> 00:19:35,680 Speaker 1: wrote a book called A History of inventions, discoveries and origins. 323 00:19:36,280 --> 00:19:40,560 Speaker 1: And then Beckmann's story when we trace this back, comes 324 00:19:40,600 --> 00:19:45,760 Speaker 1: from three anonymous pamphlets that were published in sixteen thirty seven, 325 00:19:46,080 --> 00:19:48,280 Speaker 1: the same year Everything went to pot and they were 326 00:19:48,359 --> 00:19:48,919 Speaker 1: hit pieces. 327 00:19:49,000 --> 00:19:51,320 Speaker 2: Bennis slicing the air like a knife with his hand 328 00:19:51,359 --> 00:19:53,359 Speaker 2: right now, because he feels very strongly about this, and 329 00:19:53,400 --> 00:19:56,399 Speaker 2: I agree for a good reason, hit pieces. Indeed, because 330 00:19:56,440 --> 00:19:59,000 Speaker 2: he had an axe to grind. He did not like 331 00:19:59,080 --> 00:20:02,199 Speaker 2: the practice of spec at all, and neither did McKay. 332 00:20:02,960 --> 00:20:07,040 Speaker 2: And even today, this idea of futures is considered a 333 00:20:07,200 --> 00:20:10,119 Speaker 2: moral by many, and it's a lot of it is 334 00:20:10,560 --> 00:20:14,040 Speaker 2: felt to be a type of gambling because you're making 335 00:20:14,119 --> 00:20:16,360 Speaker 2: bets on things that you don't actually own. 336 00:20:16,720 --> 00:20:17,520 Speaker 1: Right, you know what I mean. 337 00:20:17,680 --> 00:20:20,359 Speaker 2: Right, You're taking this piece of paper it says I 338 00:20:20,480 --> 00:20:24,000 Speaker 2: own the idea of this thing what does not yet exist, 339 00:20:24,280 --> 00:20:26,320 Speaker 2: and then you're selling it to somebody else for an 340 00:20:26,359 --> 00:20:31,600 Speaker 2: inflated price based on this imaginary number that keeps getting 341 00:20:31,680 --> 00:20:34,080 Speaker 2: higher and higher and higher. It's sort of like subprime mortgages, 342 00:20:34,119 --> 00:20:38,680 Speaker 2: for example, where you keep betting on something and people 343 00:20:38,720 --> 00:20:41,760 Speaker 2: don't fully understand you know, what the market is going 344 00:20:41,800 --> 00:20:44,080 Speaker 2: to do, and then it does a thing that no 345 00:20:44,119 --> 00:20:46,080 Speaker 2: one quite saw coming. And then all of a sudden, 346 00:20:46,200 --> 00:20:48,240 Speaker 2: all those bets you made you got to pay them, 347 00:20:48,240 --> 00:20:49,920 Speaker 2: but nobody has the money to pay them. 348 00:20:50,000 --> 00:20:53,639 Speaker 1: Yeah, the research was not done, and at least in 349 00:20:53,680 --> 00:20:58,280 Speaker 1: the subprime mortgage crisis, there is overwhelming evidence that several 350 00:20:58,320 --> 00:21:01,399 Speaker 1: people knew exactly what was happening and just decided to 351 00:21:01,480 --> 00:21:02,040 Speaker 1: let it happen. 352 00:21:02,080 --> 00:21:04,640 Speaker 2: Well, because you can make money. That's the thing about bubbles, right, 353 00:21:04,880 --> 00:21:06,679 Speaker 2: if you ride it out at the right time, you 354 00:21:06,760 --> 00:21:09,040 Speaker 2: ride that wave correctly, you can make a lot of money. 355 00:21:09,240 --> 00:21:12,520 Speaker 1: And we see other examples of this, Beanie babies, that's 356 00:21:12,520 --> 00:21:16,160 Speaker 1: an example, POGs. I was talking off air a while 357 00:21:16,200 --> 00:21:20,920 Speaker 1: back with Casey about bitcoin. Casey, do you remember Do 358 00:21:20,960 --> 00:21:21,920 Speaker 1: you remember bitcoin? 359 00:21:22,359 --> 00:21:23,880 Speaker 3: I do remember bitcoin? Yes? 360 00:21:24,520 --> 00:21:24,879 Speaker 2: Are you? 361 00:21:25,119 --> 00:21:27,679 Speaker 1: Are you involved? Are you a bitcoiner? No? 362 00:21:27,680 --> 00:21:29,880 Speaker 3: No, I got out of bitcoin a long time ago, 363 00:21:30,040 --> 00:21:32,520 Speaker 3: So no, I don't have a stake in bitcoin anymore. 364 00:21:32,600 --> 00:21:35,560 Speaker 1: But didn't you get out like a little too early? 365 00:21:35,920 --> 00:21:38,840 Speaker 3: I did? Indeed, Yeah, I bought when it was like 366 00:21:39,400 --> 00:21:42,560 Speaker 3: maybe like a dollar or something per bitcoin, and then 367 00:21:42,600 --> 00:21:45,000 Speaker 3: at its height it was worth some crazy amount like 368 00:21:45,040 --> 00:21:48,159 Speaker 3: maybe close to twenty thousand dollars a bitcoin. But I 369 00:21:48,200 --> 00:21:50,040 Speaker 3: sold when it was far less than that. There's like 370 00:21:50,080 --> 00:21:52,160 Speaker 3: a lot of people who have parked way too much 371 00:21:52,200 --> 00:21:54,119 Speaker 3: money in bitcoin who have lost a lot over the 372 00:21:54,200 --> 00:21:55,359 Speaker 3: last several months. 373 00:21:55,480 --> 00:21:58,879 Speaker 2: Yes, it's really interesting. It's a really interesting kind of comparison. 374 00:21:58,960 --> 00:22:01,640 Speaker 1: And they're more bitcoins on the market, right. 375 00:22:01,800 --> 00:22:04,639 Speaker 3: Oh yeah, there's like Ethereum, there's there's a bunch, Yeah. 376 00:22:04,520 --> 00:22:05,840 Speaker 1: There's there's doge coin. 377 00:22:06,000 --> 00:22:08,360 Speaker 3: Yeah yeah, there's there's all these weird like meme coins. 378 00:22:08,400 --> 00:22:11,639 Speaker 3: And there's one I was reading about called stable coin, 379 00:22:12,080 --> 00:22:14,879 Speaker 3: which is literally just peg to the US dollar. So 380 00:22:14,920 --> 00:22:16,879 Speaker 3: it's kind of like, what's even the point, But apparently 381 00:22:17,440 --> 00:22:20,320 Speaker 3: the ideas you can kind of I don't know, longer 382 00:22:20,359 --> 00:22:23,000 Speaker 3: money with it or something. So you know, oh good 383 00:22:23,040 --> 00:22:25,480 Speaker 3: the world of crypto. Yeah, so so. 384 00:22:25,520 --> 00:22:34,240 Speaker 1: We do see an interesting comparison there. We also know 385 00:22:34,480 --> 00:22:39,360 Speaker 1: that the tulip story itself, the story of tulip mania, 386 00:22:39,800 --> 00:22:44,520 Speaker 1: may have been a case of people playing telephone throughout 387 00:22:44,560 --> 00:22:49,960 Speaker 1: history based on essentially works of propaganda that were anti speculative, 388 00:22:50,280 --> 00:22:55,280 Speaker 1: anonymously published pamphlets, and this means that this means that 389 00:22:55,320 --> 00:22:58,119 Speaker 1: we have more research ahead of us. There are some 390 00:22:58,720 --> 00:23:02,840 Speaker 1: wonderful books about tulipmania. There are two that are both 391 00:23:02,880 --> 00:23:08,399 Speaker 1: called tulipmania, right, and the authors of these books will 392 00:23:08,560 --> 00:23:14,040 Speaker 1: assure you and assure us that the phenomenon was actually exaggerated, 393 00:23:14,080 --> 00:23:17,280 Speaker 1: that contrary to what McKay says, it was not a 394 00:23:17,320 --> 00:23:22,080 Speaker 1: situation wherein every single person in the nation, from paupers 395 00:23:22,119 --> 00:23:25,639 Speaker 1: to royalty, were losing their minds and gouging their eyes 396 00:23:25,680 --> 00:23:26,920 Speaker 1: out to buy more tulips. 397 00:23:27,200 --> 00:23:29,280 Speaker 2: Because I learned something in this research is that the 398 00:23:29,400 --> 00:23:33,200 Speaker 2: Dutch more or less invented the model for the modern 399 00:23:33,240 --> 00:23:36,040 Speaker 2: stock exchange. So it would certainly make sense that this 400 00:23:36,359 --> 00:23:37,960 Speaker 2: was something that happened in their neck of the woods. 401 00:23:37,960 --> 00:23:40,960 Speaker 2: And they also, you know, were a huge trading empire, 402 00:23:41,440 --> 00:23:44,359 Speaker 2: and they established New York City and all of you know, 403 00:23:44,440 --> 00:23:46,879 Speaker 2: the Dutch East India Trading Company and all of that. 404 00:23:46,920 --> 00:23:49,920 Speaker 2: I mean, it was definitely in their national identity. 405 00:23:50,560 --> 00:23:53,960 Speaker 1: Right. Harlem is originally a town in the Netherlands. 406 00:23:54,000 --> 00:24:00,000 Speaker 2: Harlem is where the infamous collapse of the market supposedly 407 00:24:00,080 --> 00:24:03,680 Speaker 2: happened during that auction where nobody bid. 408 00:24:03,800 --> 00:24:05,800 Speaker 1: Yeah, that's Harlem with two eights, that's right. 409 00:24:06,040 --> 00:24:07,840 Speaker 2: And another thing that I want to point out too, 410 00:24:07,840 --> 00:24:11,560 Speaker 2: from that video series. We mentioned the guy in that 411 00:24:11,640 --> 00:24:13,960 Speaker 2: video series points out something that I think should not 412 00:24:14,000 --> 00:24:18,879 Speaker 2: be ignored is that gambling was a huge, another huge 413 00:24:18,960 --> 00:24:23,040 Speaker 2: part of their public, their national consciousness. People would make 414 00:24:23,119 --> 00:24:24,960 Speaker 2: bets on the craziest things. 415 00:24:25,000 --> 00:24:25,240 Speaker 1: I think. 416 00:24:25,240 --> 00:24:27,800 Speaker 2: He points out one about a guy who bet that 417 00:24:27,880 --> 00:24:32,520 Speaker 2: he could ford a river in a tiny wooden barrel 418 00:24:32,680 --> 00:24:35,479 Speaker 2: or like a trough or something like that, and I 419 00:24:35,480 --> 00:24:38,919 Speaker 2: believe it was Rembrandt, the famous painter, who bet on 420 00:24:38,960 --> 00:24:41,520 Speaker 2: whether he'd be alive the next year or not. So, 421 00:24:41,680 --> 00:24:44,320 Speaker 2: I mean, it was definitely a thing that was very popular. 422 00:24:44,359 --> 00:24:47,160 Speaker 2: So it's almost like, you know, why not, let's bet 423 00:24:47,160 --> 00:24:49,639 Speaker 2: on tulips. And also we haven't mentioned the fact that 424 00:24:49,680 --> 00:24:52,000 Speaker 2: the plague was a big part of this, and people's 425 00:24:52,040 --> 00:24:55,439 Speaker 2: life expectancy was very short. Yeah, it was kind of like, yolo, 426 00:24:55,720 --> 00:24:56,960 Speaker 2: let's do this, you know. 427 00:24:57,480 --> 00:25:02,359 Speaker 1: Yeah. And with these important instrumental pieces of context, we 428 00:25:02,480 --> 00:25:06,040 Speaker 1: can unpack a little bit of the fact versus fiction 429 00:25:06,359 --> 00:25:11,560 Speaker 1: around tulip Mania. We mentioned people did have their lives 430 00:25:11,640 --> 00:25:14,800 Speaker 1: ruined financially at the time. That is true, but it 431 00:25:14,840 --> 00:25:18,560 Speaker 1: may have been far fewer people than McKay would have 432 00:25:18,760 --> 00:25:23,160 Speaker 1: us believe. In fact, some researchers have found fewer than 433 00:25:23,359 --> 00:25:26,359 Speaker 1: half a dozen people who experienced financial trouble in that 434 00:25:26,440 --> 00:25:31,680 Speaker 1: time period during the tulip boom and bust, and hear 435 00:25:31,720 --> 00:25:35,359 Speaker 1: people argue that although prices had risen, money had not 436 00:25:35,600 --> 00:25:39,080 Speaker 1: actually changed hands between buyers and sellers, so the profits 437 00:25:39,080 --> 00:25:42,520 Speaker 1: were never realized for the sellers unless they had made 438 00:25:42,640 --> 00:25:46,680 Speaker 1: other purchases on credit expecting their tulip money to come 439 00:25:46,720 --> 00:25:50,720 Speaker 1: in sometime between June and September. So the collapse and prices, 440 00:25:50,760 --> 00:25:53,760 Speaker 1: the argument goes, did not actually cause a ton of 441 00:25:53,760 --> 00:25:58,320 Speaker 1: people to lose real tangible money, just had a series 442 00:25:58,359 --> 00:26:00,720 Speaker 1: of interesting, increasingly desperate conversations. 443 00:26:01,119 --> 00:26:04,159 Speaker 2: Yeah, it's actually really cool that we got to do 444 00:26:04,240 --> 00:26:06,399 Speaker 2: this story because I just the other day was asking 445 00:26:06,440 --> 00:26:11,639 Speaker 2: my girlfriend's stepdad. He's a big Scotch fan, and I 446 00:26:11,800 --> 00:26:15,639 Speaker 2: was something I've always wondered. I asked him, was how 447 00:26:15,760 --> 00:26:18,760 Speaker 2: is it sustainable to have these Scotches that you age 448 00:26:18,800 --> 00:26:21,679 Speaker 2: for twenty thirty years or whatever and have that be 449 00:26:21,800 --> 00:26:24,159 Speaker 2: viable when you need to be selling stuff selling product 450 00:26:24,280 --> 00:26:27,159 Speaker 2: right away? And I think I'm explaining this right, But 451 00:26:27,200 --> 00:26:29,639 Speaker 2: it was another form of futures where you have a 452 00:26:29,680 --> 00:26:33,879 Speaker 2: certain elite that are investing in barrels, investing in particular 453 00:26:33,960 --> 00:26:36,320 Speaker 2: lots or whatever, of the good stuff, the really long 454 00:26:36,400 --> 00:26:38,760 Speaker 2: aged kind of fancy stuff that they do in smaller 455 00:26:38,760 --> 00:26:43,679 Speaker 2: batches in order to finance the quicker turnaround product. And 456 00:26:43,760 --> 00:26:45,359 Speaker 2: I just thought that was really interesting that this is 457 00:26:45,400 --> 00:26:47,320 Speaker 2: a very similar example to that, Like, how do you 458 00:26:47,359 --> 00:26:51,400 Speaker 2: take something that requires years to actually generate a tangible 459 00:26:51,480 --> 00:26:54,359 Speaker 2: thing and make that a market where people are actually 460 00:26:54,359 --> 00:26:56,480 Speaker 2: going to pay into it? And that's how you do 461 00:26:56,520 --> 00:26:57,920 Speaker 2: It's very similar to with whiskey. 462 00:26:58,240 --> 00:27:03,200 Speaker 1: Yeah, wine would be another great comparison. I believe this story, 463 00:27:03,600 --> 00:27:07,119 Speaker 1: while it does seem to have a cautionary aspect to it, 464 00:27:07,200 --> 00:27:09,280 Speaker 1: and while it does seem to be sort of a 465 00:27:10,119 --> 00:27:14,960 Speaker 1: morality tale, we know that it's been exaggerated. It hasn't 466 00:27:15,000 --> 00:27:18,840 Speaker 1: been completely made up. This really did happen, And I 467 00:27:18,880 --> 00:27:23,120 Speaker 1: would say that this means it still functions as a 468 00:27:23,280 --> 00:27:27,240 Speaker 1: crucial lesson in these our modern days. Don't buy tulips 469 00:27:27,280 --> 00:27:29,359 Speaker 1: for too much money, you know what I mean? And 470 00:27:29,440 --> 00:27:32,120 Speaker 1: don't we have to be we have to be very 471 00:27:32,240 --> 00:27:37,800 Speaker 1: cognizant and very self aware of group think and group panics. 472 00:27:38,200 --> 00:27:40,600 Speaker 1: Something like this will come along every so often. 473 00:27:40,600 --> 00:27:42,600 Speaker 2: Oh and another interesting little tidbit I picked up along 474 00:27:42,640 --> 00:27:46,720 Speaker 2: the way is that what happens when you start increasing 475 00:27:46,840 --> 00:27:51,359 Speaker 2: supply over years in a market that relies on scarcity 476 00:27:52,040 --> 00:27:54,840 Speaker 2: right to create the actual value of the thing itself, 477 00:27:54,960 --> 00:27:57,400 Speaker 2: all of a sudden it ain't so scarce anymore. 478 00:27:57,800 --> 00:28:01,280 Speaker 1: And then people are like, well, well, here's another example 479 00:28:01,280 --> 00:28:05,280 Speaker 1: that's tangentially related. And that's a good point in Opek 480 00:28:05,560 --> 00:28:12,240 Speaker 1: recently met to reduce production of petroleum, and they did 481 00:28:12,320 --> 00:28:15,280 Speaker 1: that not because they're worried about running out of reserves, 482 00:28:15,480 --> 00:28:20,359 Speaker 1: but because the price globally of oil fell too low 483 00:28:20,400 --> 00:28:24,679 Speaker 1: for their liking. And now, technically speaking, the US is 484 00:28:25,480 --> 00:28:28,200 Speaker 1: how you measured out. The US is the world's largest producer. 485 00:28:28,800 --> 00:28:31,359 Speaker 2: Interesting, right, and that's where future is really coming to 486 00:28:31,440 --> 00:28:35,679 Speaker 2: play today, is with things like oil, like absolutely necessary 487 00:28:35,800 --> 00:28:39,840 Speaker 2: tangible goods. Yeah, yeah, it's supposed to tulips, which are 488 00:28:39,880 --> 00:28:42,000 Speaker 2: kind of like frivolous. And if if you heard that 489 00:28:42,000 --> 00:28:44,440 Speaker 2: that mighty Python sketch about the loopins. 490 00:28:44,440 --> 00:28:48,600 Speaker 1: Oh yes, I think Gabe reminded me of that one too. 491 00:28:48,680 --> 00:28:50,920 Speaker 2: Maybe we should go out on that because it's such 492 00:28:50,960 --> 00:28:53,640 Speaker 2: a fun reminder of how absurd this whole story really is. 493 00:28:53,840 --> 00:28:55,960 Speaker 1: Let's do that. That's a good idea. Thank you so 494 00:28:56,080 --> 00:28:59,360 Speaker 1: much for tuning in. Everyone, We hope that you enjoyed 495 00:28:59,400 --> 00:29:02,760 Speaker 1: this episode. We want to hear your opinions on other 496 00:29:03,160 --> 00:29:07,239 Speaker 1: economic crazes and if you had fun listening, let us 497 00:29:07,280 --> 00:29:10,200 Speaker 1: know in lieu of sending us tulips. Why not head 498 00:29:10,240 --> 00:29:14,160 Speaker 1: over to our Facebook page Ridiculous Historians, or drop by 499 00:29:14,320 --> 00:29:19,240 Speaker 1: Apple podcast and give us a rating. My fine friends, 500 00:29:20,320 --> 00:29:21,680 Speaker 1: now false moves. 501 00:29:21,720 --> 00:29:24,480 Speaker 3: Please, I want you to hand over all the loopins. 502 00:29:24,520 --> 00:29:26,240 Speaker 1: You've got loopins? 503 00:29:26,800 --> 00:29:27,800 Speaker 3: Yes, loopins? 504 00:29:27,840 --> 00:29:31,440 Speaker 1: Come on, come on, what do you mean lupins? Don't 505 00:29:31,480 --> 00:29:34,120 Speaker 1: try and play for time? I'm not you mean the 506 00:29:34,160 --> 00:29:35,200 Speaker 1: flower loopins. 507 00:29:35,320 --> 00:29:35,920 Speaker 3: That's right. 508 00:29:36,560 --> 00:29:40,040 Speaker 1: Oh, we haven't got any loopins. Not, my fine friends, 509 00:29:40,080 --> 00:29:42,760 Speaker 1: I happen to know that this is the loop in. 510 00:29:42,880 --> 00:29:45,760 Speaker 1: Express your tiny mind. 511 00:29:46,320 --> 00:29:47,120 Speaker 3: Get out of the coach. 512 00:29:48,360 --> 00:29:54,880 Speaker 1: Oh so much of the lupins. Denis mores More galloping 513 00:29:55,000 --> 00:29:59,800 Speaker 1: cruits more, Dennis More, Denis More at his horse concord. 514 00:30:00,280 --> 00:30:03,480 Speaker 1: He steals from the ridge packets. 515 00:30:03,040 --> 00:30:06,600 Speaker 3: To the board, mister bools. 516 00:30:08,160 --> 00:30:16,160 Speaker 1: I'll be back for more podcasts from iHeartRadio. 517 00:30:16,240 --> 00:30:19,480 Speaker 2: Visit the iHeartRadio app, Apple Podcasts, or wherever you listen 518 00:30:19,520 --> 00:30:20,560 Speaker 2: to your favorite shows.