[World Bubble Encyclopedia Vol. 2] South Sea Bubble Incident and the Mississippi Project: The "official" bubble trap set by the nation

1720, London and Paris. The two capitals across the Strait of Dover were floating in the same enthusiasm, as if they had been shown together.

"XXTech" is promoted as a national policy, and this huge project started with a lot of fanfare. Have we stopped thinking ahead of that epic story? "It's okay because the country says it" - 300 years ago history tells us how dangerous those words are.

In France, people flooded with people seeking stocks in the "Mississippi Company" issued by the genius financialist John Law. In the UK, the stock price of the Nankai Company rose without knowing the ceiling, and everyone from aristocrats to ordinary people spent much time speculating.

Surprisingly, both of these enthusiasts were the nation itself. This is a strange story in which a nation launches a grand bubble against its people.

Roughly speaking

1. **The British and French governments took the odd plan to convert the debts that had been inflated by the war into "stocks." **
2. **French Genius and British national policy. Two "absolutely safe stories" have raised stock prices by more than 10 times. **
3. **However, the limits of trust are revealed and the dream collapses. Because it was "official", no one took responsibility. **

Act 1: Genius' Ambition, National Computation

Why did the state come to the point where it was setting up a bubble itself? The answer lies in the enormous "debt" that both countries were carrying. Finances have been on fire after many years of war. Two "solutions" are presented here.

John Law, France's savior

John Law is a Scottish financial figure. He was a prophet-like man from the future who believed that "banknotes" that were freed from the physical constraints of gold would produce wealth. His ideas are truly accepted as words of savior in France, which is on the verge of financial collapse.

He first set up a central bank and issues banknotes. Furthermore, the company established the "Mississippi Company", which has a monopoly of trade in French Louisiana, and exchanged its stocks for government bonds. Turn debt into stocks and use the power of banknotes to raise stock prices infinitely. It was a dream of a whole new economy, free from gravity.

UK's countermeasures, Nankai Company

Meanwhile, the UK, which is committed to being solid, could not hold its fingers at the enthusiasm of the neighboring country with its fingers in its mouth. Seeing France's success, they jump on similar plans. The "Nankai Company", which has a monopoly right to trade with South America, was the result of the White House.

The plan is exactly like the Mississippi company. The government's debt (government bonds) will be exchanged for shares of Nankai Company. The country is freed from troublesome interest payments, and the people dream of rising stock prices. It looked like perfect alchemy, no one would lose.

Act 2: The Synchronicity of Frenzy

The two national projects have driven the desires of the people out of control.

Legend of the Golden Land of the Mississippi River, Paris

In Paris, rumors have spread that the Mississippi River Basin is a golden town. People flooded John Law's banks in search of land rights (share certificates) they had never seen before. The stock price has risen more than 30 times from 500 Libre to 18,000 Libre. Overnight, many people became billionaires, and the term "millionaire" was born at this time.

London, speculative heat that ignores even the "bubble law"

London is not defeated either. Nankai Company's stock price rose from £128 to over £1,000. This enthusiasm was contagious, and even fraudulent companies sold stocks, such as the "invention of permanent engines" and "profitable businesses that can't be told to anyone." The enthusiasm that anyone can start a company with just an idea is somewhat reminiscent of the early impulses of the modern startup boom.

The government panickedly enacted the "bubble law" that prohibits the establishment of corporations that do not have royal approval. However, once the flames of desire had flare up, they could not be eliminated by law.

Act 3: The End of the Twin's Dream

However, the unrequited enthusiasm always comes to an end.

John Law's miscalculation

In France, John Law reprinted too much banknotes to support the stock price, causing fierce inflation. The price of bread rose by 60%, and people panicked to convert bills into gold coins. It was the moment when banknotes, which were supposed to be the source of trust, lost their value. The bank was closed, and the savior up until yesterday became a man being forced out of the country.

The end of the Nankai Company

In England, a very ironic ending awaited. In order to maintain its advantage, Nankai Company has accused its rivals of violating the "bubble law" and has shut it out of the market. However, it was a suicide act that undermined the trust of the entire market. He ended up cutting his own head with the sword of justice he swung. Stock prices plummeted, and many aristocrats and politicians went bankrupt. Congress was engulfed in a storm of responsibility.

Conclusion: The only lesson we should learn from this story

What will the twin bubble that occurred simultaneously in England and France teach us?

This is an irresistible fact that we are more likely to halt our thoughts than stories guaranteed by the "nation" or "genius."

"It's okay because the government does it" "It's definitely what that genius says." To be honest, it's comfortable to entrust thought to authority in this way. Just having a big flow without thinking about difficult things makes you feel at ease. However, that easy halt of thinking is the gateway to enthusiasm.

Even today, huge government-led projects and grand visions spoken by charismatic managers are endless. It is certain that they will be the power to create the future. But before you take the story at face value, take a step back.

Questioning authority is a lonely task. People around you may be disliked because you can't read the atmosphere. However, only those who have not left it to others can stand on their own feet even after the festival.

History asks us. Whose story will you live? and.