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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Giordano Bruno who wrote (93631)	4/17/2008 5:15:21 PM
From: Gib Bogle	Respond to of 110194

"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one."

To: Giordano Bruno who wrote (93631)	4/17/2008 5:41:38 PM
From: Gib Bogle	Read Replies (1) \| Respond to of 110194

(On John Law and the Mississippi scheme. Louis XIV has just died ...) The finances of the country were in a state of the utmost disorder. A profuse and corrupt monarch, whose profuseness and corruption were imitated by almost every functionary, from the highest to the lowest grade, had brought France to the verge of ruin. The national debt amounted to 3000 millions of livres, the revenue to 145 millions, and the expenditure to 142 millions per annum; leaving only three millions to pay the interest upon 3000 millions. The first care of the Regent was to discover a remedy for an evil of such magnitude, and a council was early summoned to take the matter into consideration. The Duke de St. Simon was of opinion that nothing could save the country from revolution but a remedy at once bold and dangerous. He advised the Regent to convoke the States-General, and declare a national bankruptcy. The Duke de Noailles, a man of accommodating principles, an accomplished courtier, and totally averse from giving himself any trouble or annoyance that ingenuity could escape from, opposed the project of St. Simon with all his influence. He represented the expedient as alike dishonest and ruinous. The Regent was of the same opinion, and this desperate remedy fell to the ground. The measures ultimately adopted, though they promised fair, only aggravated the evil. The first, and most dishonest measure, was of no advantage to the state. A recoinage was ordered, by which the currency was depreciated one-fifth; those who took a thousand pieces of gold or silver to the mint received back an amount of coin of the same nominal value, but only four-fifths of the weight of metal. By this contrivance the treasury gained seventy-two millions of livres, and all the commercial operations of the country were disordered. A trifling diminution of the taxes silenced the clamours of the people, and for the slight present advantage the great prospective evil was forgotten.