John Law

April 21st is the birthday of John Law (1671 - 1729) who came from a wealthy Scottish banking family. Having a great grasp on economics yet allowing vice to bankrupt him, Law figured out a way out of his situation by pairing up with the French royalty who likewise had bankrupted themselves with the king's past war endeavors.

We may recall the 2001 Dot Com Bubble in computer stock trading but stock bubbles are at least 300 years old.  Mr. Law tied the French money supply to a central bank and then used stock as paper money which created an investment boom.  This scheme came complete with speculation, deflation, stock splits and finally a bust - all in only four years!

"The most sensational get-rich-quick scheme in history" courtesy of a central bank and nefarious government leaders.

This 1978 video about John Law and the "Mississippi Bubble" from Richard Condie details the problems found with compulsive people, irrational behavior, fractional reserve, using law to manipulate the money supply and finally the tendency for underground trade in response to poor central policy.

Law's royal central bank of France, the Banque Générale, still survives today in another form.  Some of his economic theories are well noted but one should keep in mind the nature of man when he has control of monetary supply.