Tulips were once worth more than gold and diamonds and it all happened during the 100-year Dutch Golden Age in the 17th century.
Tulips, which had been known and cultivated in Holland as a luxury item since at least 1593, suddenly soared in price, fetching breathtaking prices.
None more so than the lovely Semper Augustus, a tulip with a beautiful variegated coloring. In the mania of tulip buying and selling that arose in 1634, until the tulip market crash in 1637, the Augustus reigned and a bulb once sold for the royal price of 3,000 guilders, about $48,000 in today's dollars.
What neither buyers nor sellers knew at the time (and in fact wasn't known until the 1920s), was that the Semper Augustus had red flamed stripes because the bulb was infected with a virus. The virus 'broke' the color, making lovely variations, but it also weakened the bulb, making it difficult, if not impossible, to propagate. Semper Augustus does not exist today, according to GardenOfEden.com.
During the three-year tulip mania in Holland, prices for all tulips skyrocketed. Lots with 40 tulip bulbs are said to have sold for the equivalent of $1 million in today's dollars.
Like most 'speculative bubbles,' one day the mania just ended. In February 1637, a routine bulb auction was set to begin in the Dutch city of Haarlem and no one showed up. Prices crashed and the bubble popped.
Many such bubbles have appeared over time, but one occurred in the 1990s with Ty Warner's $5 Beanie Babies.
This bubble was, according to Zac Bissonnette, author of The Great Beanie Baby Bubble, started by a group of ordinary collectors in Chicago who obsessively haunted the small gift shops where the bears were sold. Their quest to get every Beanie Baby was stymied by scarcity. Ty Warner made very few of some models; just 2,000 of the most famous royal blue baby Peanut the elephant. Other models were 'retired' randomly creating scarcity. When items are hard to find, people are willing to pay more, sometimes increasingly more and a bubble is created. The price of Beanie Babies famously collapsed in 1999 when collectors watched Ebay for prices to rise on newly retired models but no one was buying. Suddenly there was a sell off and the bubble was gone. You can still buy the royal blue Peanut on Ebay for prices ranging from $8 to $2500 but mainly Beanie Babies are worth nothing.
