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300 years ago France was on fire because of the Mississippi Bubble, an all-time financial mania.
Speculation on the investment potential of the Louisiana Territory had created interest in new trade near Kawsmouth (modern day #KC #KCMO). #stocks
Here's the story-
Speculation on the investment potential of the Louisiana Territory had created interest in new trade near Kawsmouth (modern day #KC #KCMO). #stocks
Here's the story-
1/ Scotsman John Law (economist, degenarate gambler) was the original central banker villain.
He convinced France to buy into his scheme of getting out of debt after Louis XIV had bankrupted the country.
He convinced France to buy into his scheme of getting out of debt after Louis XIV had bankrupted the country.
2/ 1) John Law created France’s first paper currency.
2) He got a trading monopoly for his Mississippi Company in Louisiana.
3) He took control of the French crown’s finances. The deal was that Law would loan the crown the money to pay off their debt by issuing new shares.
2) He got a trading monopoly for his Mississippi Company in Louisiana.
3) He took control of the French crown’s finances. The deal was that Law would loan the crown the money to pay off their debt by issuing new shares.
3/ From May to December of 1719, shares in Mississippi Company stock shot up from 500 to 10,000 and continued rising.
Commoners were buying shares with just 15% downpayment.
It was the original #StockMarket bubble.
Commoners were buying shares with just 15% downpayment.
It was the original #StockMarket bubble.
4/ More paper currency was also being created than was backed in reserves. Inflation became so bad that Law had to FORCE deflation… which didn’t work.
The bubble would pop and shares went into a free fall quickly in 1720, falling to 4,000 livres by May.
The bubble would pop and shares went into a free fall quickly in 1720, falling to 4,000 livres by May.
5/ There was a rush not only to sell shares but also to convert paper money into gold coins.
People were trampled to death in the stampede.
People were trampled to death in the stampede.
6/ Meanwhile on the other side of the pond, a vicious battle breaks out in modern-day #Nebraska between the Spaniards and (French-backed) Pawnee.
That was 300 years ago THIS WEEK!
As a result, the French military recommends a post built on the #Missouri river.
That was 300 years ago THIS WEEK!
As a result, the French military recommends a post built on the #Missouri river.
7/ The man for the job was Etienne de Veniard, Sieur de Bourgmont. He was a frenchman who had gone native, living with the Missouri tribes for years… a Missouri Indian princess, you know.
On the Mississippi Company’s dime, Bourgmont established Fort Orleans, 90 miles east of KC
On the Mississippi Company’s dime, Bourgmont established Fort Orleans, 90 miles east of KC
8/ He took an expedition of 1,000 men up to Comanche country. The resulting treaty between the Comanches, the Missouris, the French, and others was a success!
He returned to France a hero. Several tribal chiefs joined him on the journey across the ocean to meet King Louis XV.
He returned to France a hero. Several tribal chiefs joined him on the journey across the ocean to meet King Louis XV.
9/ The legacy of the Scotsman John Law was (mostly) economic destruction and the passing on his bad ideas to future suckers.
He died poor, penniless, and disgraced... not achieving #FinancialFreedom.
He died poor, penniless, and disgraced... not achieving #FinancialFreedom.
10/ The legacy of Bourgmont was paving the way for the Sante Fe Trail. This commercial highway would give birth to Kansas City area settlements 100 years later.
He’s a pivotal player in French Kansas City history.
Bourgmont is Kansas City’s version of La Salle.
He’s a pivotal player in French Kansas City history.
Bourgmont is Kansas City’s version of La Salle.
11/ Such a pleasure to tell this story with the excellent Jamie Catherwood @jfc_3_ !
You can listen to the drama unfold on The Reformed Financial Advisor podcast.
Here's the link to find the podcast on your player- http://simplewealthkc.com/bubble/
You can listen to the drama unfold on The Reformed Financial Advisor podcast.
Here's the link to find the podcast on your player- http://simplewealthkc.com/bubble/
For more on John law, here’s another great thread by @SahilBloom https://twitter.com/sahilbloom/status/1308040398917443589
