The Dutch Tulip Mania was one of the very first market manias (bubbles) based on speculation.
New forms of tulips were spontaneously popping up in fields and people with wealth were bidding the prices of these novel tulips to astronomical levels.
It was a time of great optimism and discovery. New species of plants were being found and identified as explorers opened up the Orient. Everything seemed possible, even tea plantations in Ireland!
For whatever reason, the Dutch (a great maritime nation at the time) seized upon tulips as a source of wealth. It was the bit-coin of the day. Tulips automatically reproduce but they do it at a slow, controlled, finite rate (maybe the crypto analogy wasn't that far off!). Demand for the newest types of tulips vastly exceeded the natural rate of reproduction.
The way to prove your status and coolness in Holland in 1635-1637 was to be a "player" in tulips. The "market cap" of tulips exceeded the market cap of all other forms of wealth in Holland at one time. The value of the buildings and farm land and cattle and gold...in sum, were less than the "extended" value of all the tulip bulbs in Holland in 1637. By "extended" I mean the daily selling price at auction extended over the entire crop.
People borrowed prodigiously to buy into a piece of the action.
The gravy-train crashed when it was realized that the fanciful colors and twisted petals and other novel presentations were due to a disease. It was due to virus although viruses were not understood at the time...but the idea of something being sick and contagious was.
Today's prosperity
Crypto is valuable because people think it is.
Healthcare is considered a source of wealth because people think being pregnant is a disease that needs to be corrected with surgery or a pill.
Additionally, Healthcare is profitable because people have been trained to think that angst-y teens' and pre-teens' fantasies must be acted on and it is profitable to cut off their body-parts, sort of like the beggar in Life of Brian.
Social media is valuable because people think that knowing what all 537 of their "friends" are doing on a second-by-second basis is more important than paying attention to the task in front of them. Young women passed young men as the least safe drivers in recent years suggesting that distracted-driving is a bigger problem than drunk-driving.
When you start scratching around, there are many more examples of activities that we were sold are "generators of wealth" might in fact be nothing more than mind-viruses.
I don't think it's a mind-virus so much as it is an attempt at re-calibration of what constitutes value... though I see the similarities (tulips = latest iPhone). Mind you, I'm not in agreement with this, nor is a large swath of the population, but at the center of the debate is what is more valuable, and I feel we are deliberately being forced into making a choice? Today the media seems to be more interested in changing society than merely reporting on it. It feels though there is some force or coercion at the end of the stick? Freedom or Safety comes to mind...
ReplyDelete1 or 2 generations ago, box-wine cat lady's were shamed, today they are lauded while traditional marriage is shunned as as 'waste' for wimmens... in my father's time, the ultimate "life" was to date a couple girls while in HS, get a real job, bag some skirt, raise a litter of kids in suburbia, retire to the beach at 55 and take up golf? Today media suggests you won't be happy unless you're an androgenous 65 year old entrepreneur working 7 jobs, die your hair un-natural combinations, hang fishing lures off your face, and take multiple non-committal partners.
The dichotomy could not be more stark. It's as if someone took every norm of traditional society and inverted it... which ironically is exactly what Cloward-Piven strategy suggests you do to destroy a nation.
What's happening? It's not accidental.
Now watch as people defend the practice, even arguing that you've got it all wrong.
ReplyDeleteEx: I say every run in the market was the result of someone whispering to another. Every sell off, every buy in started with a whisper, a hunch shared. By the time of news stories of possible runs, the trend is in full swing.
Naw, others will say. Its just market corrections, and other pablum.
The widespread availability of mobile phones has had a monumental negative effect on society.
ReplyDelete9,000 kids got messed up. 5,000 of those got chopped up. These are all individual tradegies, but orders of magnitude less than I expected. The aggregate amount of money sounds big, until you realize that healthcare (wow, is that a B.S. word) is almost 1/4 of our multi trillion dollar Ponzi scam of an economy.
ReplyDeleteCrypto will crash but not before a few get insanely rich. Those riches will become meaningless, however, when Weimar-style inflation makes a million dollars a down payment on a used car. It's trite to suggest gold and silver but I would add ammo to that list if I had to make a prediction of what will retain value. We're screwed.
ReplyDeleteERJ, having seen the tulip gardens of Istanbul (which preceded the West by a few years, called "The Tulip Years" in Turkish History), they were rather lovely - although certainly not the basis of actual wealth.
ReplyDeleteBust and boom cycles are nothing new or strange to humanity, although the manifestations of them are. Crypto falls into that category that, if there are historians years from now, they will raise their eyebrows and wonder what the heck we were thinking.
More and more, it becomes readily apparent that the first line of defense for health and healthcare is the individual - not just because of the facts of expense or personal responsibility, but because of how long it can take to actually get the problem resolved.
Between my parents and father in law, all now deceased and all having spent the last years of their lives partially or full in long term care solutions with periodic hospital visits, a rather large sum of money was spent. They had all planned for this; I cannot imagine what upcoming generations who are/have not and seem to be on track for a bevy of health related issues, will do so.