Informational Tidbits from my Historical Spelunking

In my research of where our current fractionalized banking system came from, I encountered the story of John Law. Law, a degenerate gambler and murderer, was the first to suggest printing money backed only by the people’s faith in the government. The only country to go for his idea was France in the late 1600s and early 1700s. When the new king ran out of money after Louis XIV built so many grand chateaus, Law became controller of finances for France and opened a private bank that was later nationalized. He then raised money using paper bonds. He created the nations first central bank and controlled the government treasury. He later was appointed director of the Mississippi company, the company controlling all of France’s trade with America. The height of his power was comparable to having controlled the US treasury, federal reserve, and the S&P 500. Law pushed his luck and sold too much equity in the Mississippi company at too high a valuation. Slumping demand in equity for the Mississippi Company coincided with less demand for equity in the Dutch East India Trading Company and caused a collapse of the system. John laws actions in France made a handful of people so much money that his actions indirectly coined the term “millionaire” A visionary of sorts, Law created the banking system we more or less still use today. Some say that the French Revolution itself was the indirect consequence of the state in which Law left the country’s finances, but the French Revolution was also arguably the fault of Louis XIV for leaving the state so desperate as to necessitate the help of someone like Law. King Louis XIV built so many Chateaus all over France and employed over 10000 full time staff. The word “meubles” in French means furniture and more literally translates to mobile. The term originated because Louis XIV moved from chateau to chateau every 2 weeks to avoid his enemies ever finding him. He not only paid to have grand chateaus built across the country, but employed thousands of staff to move his furniture every 2 weeks from place to place. The word furniture literally translates to “that which can be moved” because King Louis XIV moved his furniture so much….bankrupting the country so that the regent to the next king had to recruit John Law.