Courting Catastrophe: Tulip Mania and Diamond Mania

(n-rothmann.com) - In 1554 Ogier de Busbecq, the ambassador of Holy Roman Emperor Ferdinand I to the court of Suleiman the Magnificent, the Sultan of the Ottoman Empire, returned to Vienna from Constantinople carrying the first tulip bulbs ever seen in Western Europe. Little did he know that this simple act would set off a chain of events resulting in the first speculative bubble in recorded history. It would become known as Tulip Mania.The popularity of a diamond as a means of investment in the late 1970s coincided with general growth in the commodity investment market. But the fact is that diamonds have always had difficulty in conforming to the profile of a typical commodity. But despite both this and also the trauma of the investment bubble of the 1970s and 1980s, many diamond dealers still fantasize about selling their products as they would a commodity, believing that this will open another sales avenue.