banque royale

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banque royale

Years ago, in a class of college in a different world, a young teacher teaches a lesson on European history. A day been the story of John Law, a player economist who has reached celebrity status as being in exile, penniless. The teacher history is fascinating! The swashbuckling word comes to mind and it inspired me to read The Count of Monte Cristo by Alexandre Dumas, the guy who also wrote The Three Musketeers.

The part of the history of economic collapse France and the Mississippi bubble were temporarily stored for fill-in-the-blank test ending, "Is not No unusual tactic in the Middle school history. Dear Madame "Long Gone memory" doing his job. Fast Forward 30 years and the objective of the lesson plan has been completed. I get it now. What John Law did for the economy in France is happening in America. Whoever coined the phrase "history repeats itself" knew of what they were talking once again …

John Law was born in Edinburh, Scotland in a wealthy family of bankers and goldsmiths. When his father died, He took over the family business, but has turned into the ground spending money like a drunken sailor and women continued. His exploits in extravagant luxury has finally led to the game, which does not work so well.

In a dispute over a woman by the name of Elizabeth Villiers, Right to kill a man a duel and was given the death penalty. He escaped and took refuge in Amsterdam where he studied finance. He published a thesis entitled Regarded as money and trade, where he argued that the printing of more paper money and its circulation would expand wealth of a country.

In 1716, King Louis XV of France gave Law the opportunity to implement its strategy to use the money paper. Map of the Act was to create a government-led financial monopoly and use profits to pay the exorbitant national debt incurred by the ongoing wars led by the king.

Is it just me or is this sound familiar?

Law was appointed Controller-General Finance and began the General Bank Privee (General Private Bank) who was eventually replaced by the Royal Bank (Royal Bank). Because the economy was so attached, there was a shortage of precious metals led to a shortage of coins in circulation.

The solution was printing of paper currency as a Fiat or government notes are secured by the faith and credit of the king. The plan was a success at first and Law was rewarded by being given control of the France operations in America, the territory of Louisiana, using the name of the Company Mississippi, which soon became the richest company in France.

With share prices soar, they thought it was a good time to print more currency. Paris was a city booming and many people were living high on the hog.

What happened was then, inflation has started to creep in and the paper money has lost it's purchasing power. Where declining confidence in the economy has begun to raise their heads, people wanted their rooms and there was a run on the bank. Or they bought valuables such as precious stones and jewelry. At the end of 1720 the bubble finally burst and everybody wanted to get rid of them paper money worthless.

John Law was forced to flee France and moved around Europe for the rest of his life. It goes back the game and ultimately a poor man died in Venice in 1729.

ABOUT THE AUTHOR: Nathan BF Gurley is a self-employed real estate appraiser, musician, and blogger. Please visit http://GretnaGold.com

french trailer, BANQUE ROYALe