The Dutch tulip mania of the early 17th century is probably the first recorded example of the modern phenomenon of the bubble economy, where relatively worthless commodities are driven up to insane prices by speculation.
In this case, the commodities in question were tulips, which were first imported into Europe from the east at the beggining of the 17th century. A fad for decorating and gardening with these new flowers quickly sprung up, and demand quickly oustripped supply. This was the beginning of the bubble. People began hoarding tulip bulbs, especially of new varieties, in anticipation that their prices could only increase. This hoarding quickly drove prices even higher, spiraling out of all proportion for what were, after all, only flower bulbs.
When the craze was most intense, in 1630s Holland, people would exchange all of their worldly possessions for just one bulb. Banks would use one bulb as acceptable collateral for loans, whole businesses would be exchanged for single bulbs, people would quit their jobs and sell everything to get in on the ground floor. Sound familiar?
The end came in 1637, when the Dutch government, after a series of warnings, announced that banks would no longer be allowed to use tulip bulbs as collateral for loans. Almost immediately, panic set in, and in a few days, the tulip bulbs returned to their natural price, which was nothing compared to the levels they'd been trading at a few days before. The once-thriving Dutch economy was almost ruined, and took more than twenty years to fully recover.
Of course, this whole phenomenon is entirely familiar by now. The Japanese stock and real estate markets in the late '80s behaved in the same way (at one point, the land in Tokyo was worth more on paper than all of North America), and of course, the dot-com fever more recently, seems to have been exactly the same, though that probably still hasn't bottomed out.
This is similar to pyramid schemes and multi-level marketing schemes, with the critical exception that there's no clever con-artist sitting beside the scenes manipulating everything and reaping the profits. Instead, the positive feedback loop in price comes entirely from hysteria on the part of the investors. Those who don't learn from history are doomed to repeat it.