Now here's a little story about Semper Augustus. You can check the facts on Wikipedia... Semper Augustus is the name the Dutch gave to one of the first tulips they took back to The Netherlands around the year 1550. In Latin Semper Augustus means Always August (the month of August was named after a Roman Emperor) wich of course implies that this flour is so beautiful that it seems like summer never ends.
In these days tulip bulbs took two years to grow and bloom. The thriving city of Amsterdam was back then the heart of world trade of spices, slaves and other commodities (excuse the expression, but history is not always kind for all of us).
So there was plenty of money and there were plenty of women spending their husbands money. Cause some things never change.
Well, this Semper Augustus was so popular amongst the rich and wealthy, that the bulbs as well as the flowers were traded at huge prices. One bulb could easily be traded for a typical Amsterdam canal house.
Trading Futures
But as tulips took time to grow and the voyage with sailing ships to Holland took time, these bulbs were traded before they arrived, and later on even before they were seeded in Turkey - the land of origin. Bulbs were traded on paper while they did not yet exist and there in the Dutch Golden Ages the first trading of Futures was born.
The first Futures Bubble
Over eighty percent of the population in the city of Alkmaar near Amsterdam worked and lived from the trading of Semper Augustus and Futures. When one day a trader finished his day (or week or whatever) he had not sold all of his tulips, so he sold what was left in a bag for a dump price.
Within one week after that unfortunate event tulip prices had dropped and hit rock bottom. Many merchants who had made fortunes by trading spices for decades, lost all of their money and more in less than a week. And there the first Futures Bubble was born.
The mayor of Amsterdam had to intervene and trading something that did not exist was forbidden. The basics of this law still are in our legislation: no contract can be made without 'a cause'. Trading Futures however is permitted as the goods behind the Futures do exist.
As my family name is Augustus and goes back many centuries - even before the time of Napoleon, my parents must have been drunk calling me Semper. Or there is another explanation to my name... However, that is the story of one of the first tulips, the start of trading futures and the first stock market crash.
In these days tulip bulbs took two years to grow and bloom. The thriving city of Amsterdam was back then the heart of world trade of spices, slaves and other commodities (excuse the expression, but history is not always kind for all of us). So there was plenty of money and there were plenty of women spending their husbands money. Cause some things never change.
Well, this Semper Augustus was so popular amongst the rich and wealthy, that the bulbs as well as the flowers were traded at huge prices. One bulb could easily be traded for a typical Amsterdam canal house.
Trading Futures
But as tulips took time to grow and the voyage with sailing ships to Holland took time, these bulbs were traded before they arrived, and later on even before they were seeded in Turkey - the land of origin. Bulbs were traded on paper while they did not yet exist and there in the Dutch Golden Ages the first trading of Futures was born.
The first Futures Bubble
Over eighty percent of the population in the city of Alkmaar near Amsterdam worked and lived from the trading of Semper Augustus and Futures. When one day a trader finished his day (or week or whatever) he had not sold all of his tulips, so he sold what was left in a bag for a dump price.
Within one week after that unfortunate event tulip prices had dropped and hit rock bottom. Many merchants who had made fortunes by trading spices for decades, lost all of their money and more in less than a week. And there the first Futures Bubble was born.
The mayor of Amsterdam had to intervene and trading something that did not exist was forbidden. The basics of this law still are in our legislation: no contract can be made without 'a cause'. Trading Futures however is permitted as the goods behind the Futures do exist.
As my family name is Augustus and goes back many centuries - even before the time of Napoleon, my parents must have been drunk calling me Semper. Or there is another explanation to my name... However, that is the story of one of the first tulips, the start of trading futures and the first stock market crash.