Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench
In the same category

Law’s Millionaires, Bernanke’s Billionaires

IMG Auteur
Published : March 09th, 2012
484 words - Reading time : 1 - 1 minutes
( 4 votes, 5/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Editorials

 

 

 

 

Being a billionaire isn’t such an exclusive group anymore. Back in 1998, there were reportedly 230 billionaires worldwide. Now, according to Forbes magazine, the number has grown to 1,226. The United States still has the most with 425, but now 58 countries have billionaires. Russia and China have nearly 100 each.

Nobody seems too excited about billionaires, likely because a billion is an unimaginable number—a thousand million. There was once a time when being a millionaire meant real wealth, but no more. Most financial planners will say that the average person needs to retire with more than a million dollars socked away to live comfortably in retirement.

The word millionaire was coined in 1720 during John Law’s ‘Mississippi Bubble” to describe those making vast fortunes in Law’s Mississippi Company stock that rose from 150 livres to 10,000 in the matter of months. But just as quickly, the stock and the currency wildly inflated by Law’s Banque Royale, crashed and Law was forced into exile.

Like Ben Bernanke, Law believed France’s economic problems as being one of not enough money. He started small with his privately owned Banque Générale, within a year all royal revenues were to be paid in the Banque’s notes and these notes were to be cashed on sight at government offices, making these offices essentially branches of Law’s bank.

Two years into Law’s system, the livre was devalued again, by 40 percent. Despite the devaluations, Law’s reputation continued to rise and by the end of 1718, the state took over Law’s bank, which became the Banque Royale. A nomadic gambler just three years before, Law suddenly had immense power, controlling the monopoly on coining money, the collection of tax revenues, as well as tobacco and salt revenues. His Mississippi Company (Compagnie du Mississippi) would buy up the debt of the French government, a proposal John T. Flynn compares to Roosevelt’s plan to extinguish America’s debt by having the Social Security Board purchase it.

Law inflated the money supply through the Banque Royale, he created jobs through public-works projects; he attempted to release the hoarded savings back into business with the promotion of Mississippi Company shares; he exploited France’s colonial empire, relieved the debt-ridden government of its debts, and was making money for himself and his patrons.

Law’s system unraveled a mere four years after it began. People fled Law’s paper for the safety of gold and silver, despite Law’s attempts to demonetize and confiscate specie. Ultimately, Law’s system would only serve to forestall France’s bankruptcy, not solve it. Law himself would die near poverty a decade later.

What were once Law’s millionaires are now Bernanke’s billionaires. “Law is the precursor of the inflationist redeemers,” Flynn explained. “Like all the inflationist salvations, his career was short.”

Bernanke has been on the job for six years, and the Gates, Buffetts, and Slims of the world are reaping the benefit. But for how long?

 

 







Thanks to Douglas French from blog.mises.org
Data and Statistics for these countries : China | France | Russia | All
Gold and Silver Prices for these countries : China | France | Russia | All
<< Previous article
Rate : Average :5 (4 votes)
>> Next article
Douglas French is president of the Mises Institute and author of Early Speculative Bubbles & Increases in the Money Supply.
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Why we should abandon the State
28 Julovertheedge
What a gigantic pile of horse excrement. Cherry pick everything that has gone wrong. Completely discount the hard fact that the author and ...
Iran Agreement Boosts Peace, Def...
26 Julkeith95
How about the US invading Afghanistan in 2001, Iraq in 2003 ... leading to the current unrest in the middle east while supporting the 'Saudi's' ......
Take Possession of IRA Metals We...
24 Julericgolub
Internal Revenue Code 4975 language suggests that whether the gold is held directly by the IRA or by an IRA LLC (which is nonetheless still subject...
Gold Miners Nearing Rebound
24 Julsonora69
Silver has already made a 50 cent down and up round trip as of 3:30. This is happening on a Friday, with the stock markets failing to make an advan...
Why Pensions Are A (Big) Black Swan
25 JulS W.1
No (pensions) are not a black swan, which is totally random unforeseen event.
Iran Agreement Boosts Peace, Def...
23 Julsonora69-2
Doesn't anyone remember the Iran hostage crisis, when Iran held 52 American diplomats and citizens hostage for 444 days in 1979-1981. How about 198...
What Do Greece and Louisiana Hav...
23 Julovertheedge
"The US financial system isn’t any better. ... , Actual currency is just a little over $1.36 trillion. ..." And it is assumed that about h...
Why Are We Here?
23 Julovertheedge1
No "woe is me" here. Just another buying opportunity. Using leverage is not buying, it is borrowing. It ain't bought til it's paid off....
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Mining Company News
Claude Resources(Au-Cu-Ngas)CRJ.TO
Provides Date for Q2 Results and Conference Call
CA$ 0.60+7.14%Trend Power :
Corporate news
Richmond Min.(Ur-Au-Gems)RMD.V
- Exploration Update
CA$ 0.09+0.00%Trend Power :
Corporate news
Arianne Phosphate(Ur-Mo-Ti)DAN.V
Extends the Term of Warrants
CA$ 0.84-4.55%Trend Power :
Financings
Anaconda Min.(Au)ANX.TO
Reports 12.83 g/t Gold Over 4.38 Metres and 8.55 g/t Gold Over 4.97 Metres from Channel Sampl
CA$ 0.05+25.00%Trend Power :
Corporate news
Capstone Mining(Ag-Au-Cu)CS.TO
Second Quarter 2015 Financial Results
CA$ 0.95+5.56%Trend Power :
Financials
Taseko(Au-Cu-Mo)TKO.TO
and Soda Creek Indian Band Sign Participation and Cooperation Agreement
CA$ 0.67+1.52%Trend Power :
Corporate news
Tinka Resources(Ag)TK.V
commences 10,000 metre drill program at Ayawilca zinc project, announces new IP results & tar
CA$ 0.17+0.00%Trend Power :
Corporate news
Sandstorm Gold(Cu-Mo-Au)SSL.V
Files Early Warning Report
CA$ 3.20+1.59%Trend Power :
Corporate news
Crown PointCWV.V
Provides Operational Update and Announces Executive Change
CA$ 0.13-3.70%Trend Power :
Corporate news
Cardero Res.(Ag-Au-Cu)CDU.TO
Announces Acquisition of the Advanced Zonia Copper Oxide Project in Arizona
CA$ 0.02+100.00%Trend Power :
Corporate news
Comments closed