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.
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