noch was historisches über Law

verfasst von nasdaq, 27.06.2003, 12:13

-->The value of shares in the Mississippi Company rose dramatically as Law's empire expanded. Investors from across France and Europe eagerly played in this new market. The financial district in Paris became so agitated at times with investors that soldiers would be sent in at night to maintain order. Shares in the Mississippi Company started at around 500 livres tournois (the French unit of account at the time) per share in January 1719. By December 1719, share prices had reached 10,000 livres, an increase of 190 percent in just under a year. The market became so seductive that people from the working class began investing whatever small sums they could scrape together. New millionaires were commonplace.

The weak spot in Law's scheme was his willingness to issue more bank notes to fund purchases of shares in the company. Stock prices began falling in January 1720 as some investors sold shares to turn capital gains into gold coin. To stop the sell-off, Law restricted any payment in gold that was more than 100 livres. The paper notes of the Bank Royale were made legal tender, which meant that they could be used to pay taxes and settle most debts. The company was trying to get people to accept the paper notes rather than gold. The bank subsequently promised to exchange its notes for shares in the company at the going market price of 10,000 livres. This attempt to turn stock shares into money resulted in a sudden doubling of the money supply in France. It is not surprising then that inflation started to take off. Inflation reached a monthly rate of 23 percent in January 1720.

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• Greenspan ein grösserer Inflationist als John Law - kingsolomon, 27.06.2003, 11:16
  • Wir sind wahrscheinlich alle hier noch viel zu naiv - R.Deutsch, 27.06.2003, 11:35
    • Re: Wir sind wahrscheinlich alle hier noch viel zu naiv - LOMITAS, 27.06.2003, 11:45
      • Was ist der Trick? - R.Deutsch, 27.06.2003, 13:19
        • Re: Was ist der Trick? - LOMITAS, 27.06.2003, 14:16
        • Re: Was ist der Trick? - CRASH_GURU, 27.06.2003, 17:22
          • @Crash-Guru - Was ist der Trick? - R.Deutsch, 27.06.2003, 21:03
            • Re: @Crash-Guru - Was ist der Trick? - dottore, 28.06.2003, 10:36
              • Nicht von oben herab.... - R.Deutsch, 28.06.2003, 12:22
                • Kleiner Nachtrag - R.Deutsch, 28.06.2003, 12:41
                  • Re: Kleiner Nachtrag - dottore, 29.06.2003, 18:17
                • Re: Nicht von oben herab.... - dottore, 29.06.2003, 18:15
            • Re: @Reinhard D - Was ist der Trick? - CRASH_GURU, 29.06.2003, 23:04
  • noch was historisches über Law - nasdaq, 27.06.2003, 12:13