2. The Mississippi Bubble (1720)
In 1717, Scottish financier John Law established the Mississippi Company, aiming to exploit France’s colonial territories in North America. By 1719, the company had merged with other trading entities, granting it a monopoly over French colonial trade. Law’s aggressive promotion led to a speculative frenzy, with share prices soaring from 500 to 10,000 livres. However, the company’s ventures failed to yield expected profits, and the over-issuance of paper currency caused rampant inflation. By 1720, the bubble burst, leading to a severe economic collapse in France. (britannica.com)
