Fiat money inflation in France - Part 1: John Law

Max Keiser, of maxkeiser.com, James Turk, Director of The GoldMoney Foundation and Pierre Jovanovic, jovanovic.com, tell the story of the introduction of Fiat Money to France.

They discuss John Law and how his money printing fix was seen by the French Regent as a way out of the kingdom's debt troubles -- accumulated by past wars and royal extravegence -- a way to avoid the harsh spending cuts that were unavoidable given the difference between income and spending.

Keiser, Turk and Jovanovic talk about the Mississippi Bubble and how speculation in stocks became rampant as banknotes were printed to drive up the value of paper assets, how the French public was caught up in the speculative mania with dreams of untold riches from Louisiana.

They explain how John Law's success and the riches that he brought the crown ensured his promotion to Minister of Finance.

The trio also discuss how the bubble popped, how all manner of coercive and increasingly desperate steps were taken to prop up the value of shares in the Mississippi Company, including the printing of increasing amount of banknotes. When the banknotes themselves started to depreciate, gold and silver coin were outlawed in an attempt to force the French to use only paper money. The consequences were disastrous, with commerce paralysed and the economy brought to its knees.

Further reading:

La Banqueroute De Law, Edgar Faure

Early Speculative Bubbles and Increases in the Supply of Money, Douglas E. French

Extraordinary Popular Delusions and the Madness of Crowds, Charles Mackay

• Category

  Education

[Frank Knopers]

History is awesome :P

[cankorgbr]

Monetary history in a digestable format for the masses, BRILLIANT!

[Flix Moreno]

John Law, Jack Lew...

[Flix Moreno]

John Law, Jack Lew...

[verdun2003]

I am French, and they never taught me this in history classes. Maybe we should just replace our teachers by youtube - we eventually will, there is no more money left in my country.

[G Law]

"the guillotine started to work OVERTIME!" awesome narration

[G Law]

Max could definately make a monster truck commercial or narrate a scary movie! LOL

[Michiel1972]

This is a fantastic production. Wish though the Gold Money Foundation would do a documentary about (hyper)inflation through out history, from the Roman Empire to the most recent ones like Zimbabwe and Argentina. And ofcourse the big ones in between, like Genghis Khan's empire, the French Revolution and the Weimar Republic (Germany, 1923). On the wikipedia Hyperinflation page are many examples.

[hinno95]

At 3:00

The text is not french, it's dutch...

I take GoldMoneyNews in question now..

[truthsabre7]

Great video. How much longer can this ruse go on?

[vanityrose12]

things don't happen overnight.....