Market manias

John Law founded Banque Générale Privée, which issued paper notes that customers could redeem for gold with fractional reserves. Law’s paper notes and bank were so successful that the crown gave him a charter for the Banque Royale and custody of all French national debt. The Mississippi Company was chartered by Law. Law and the…

The South Sea Bubble has been referred to as the first financial crisis in history, the first Ponzi scheme in history, a fever for speculation, and a terrible illustration of what may happen when people fall to contagious group believes. The fact that it was a catastrophic financial collapse and that some of the best…