Quote: (09-06-2013 05:30 PM)emuelle1 Wrote:
A book I read recently that was hard to get through is Early Speculative Bubbles by Douglas French. The writing was easy enough, but it dealt with some technical economics information that I had trouble getting my mind around. I still don't quite understand why so many people lost their shit over tulip bulbs or how such things got to be as comparatively valuable as a McMansion in 2006 or a .com stock in 1999. Somehow Holland's bank was a hard money bank, so it's not like they could expand credit the way banks today do.
I finally decided since I'm studying Austrian Economics anyway, I'd just plow through the book and keep studying, and something I read later will help pull it together.
The following book has a chapter on the tulip bubble which took place in Holland. It is the clearest explanation I have seen.
http://www.amazon.com/Red-Blooded-Risk-S...149&sr=1-1
Most authors mess up the explanation, since they are lazily rehashing inaccurate descriptions. As opposed to checking to see what really happened. The blame lies with writers repeating the misinformation from Extraordinary Popular Delusions and the Madness of Crowds by the Scottish journalist Charles Mackay, which was first published in 1841.
So - to make it clear - people were not paying vast sums of money for single tulip bulbs. They were paying those sums for the rights to breed a particular variety of tulip.
So - to give an analogy - they were buying the 'patent' for a particular variety of tulip, as opposed to just buying a single tulip bulb.
Anyway - the above is a great book. Aaron Brown is super smart. It is one of the most interesting books I have ever read. I have read alot of books to do with finance, and this book contained more novel insights than any other finance book I have read.