They taught us a valuable lesson. Scarcity inflates prices. When the prices get high enough, economic viability changes. This enables us to plant tulips in fields that are not even developed yet.

I can plant in my garden, on my rooftop, strip down my house, convert my grain fields to tulips. All these become possible at different price points. As more and more of them become possible, even if demand remains constant, supply soon outstrips the demand, and prices plummet.

Those who leveraged themselves to get in on the action blow the bank. (Most of us do because the market is exploding.)

Understanding the drivers and constraints that create demand is useful before asking for a big investment. It’s critical before taking it.

Andres Bartelsman

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