Even the infamous “tulip mania” of 1630—considered the greatest bubble in history—when Hollanders were gripped in a craze of speculation over tulip bulbs, was caused by monetary distortion, even though there was no central bank behind the scenes. At the time, the Netherlands had a “free coinage” policy that allowed those who had silver and gold bullion from the Americas to mint their own coins. By 1630, a large increase in the supply of coins and bullion in Amsterdam far exceeded the market demand, and led to malinvestment and speculation.19
