PC and WI: John Law's system doesn't collapse

John Law (1671-1729) was a Scottish Economist. He became Controlleur Général des Finances in France under the Regency of Philippe, Duke of Orléans, for the young Louis XV. John Law is remembered for being one of the first men to have created paper money as well as for having created the first central bank of France, the Banque Général and later Banque Royal. His system was also able to reduce the National Debt of France.

But events went out of control because of several factors: the state created too much paper money, John Law tried to limit the possession of precious metals but most notably the "Mississippi bubble" exploded and provoked a Financial Crisis that made the Banque Générale bankrupt. (Note: I'm no economists. I might be simplifying what happend a bit too much as I only tell what I understood.)

Was it possible to avoid the Collapse of John Law's system? And if so, what would be the consequences of this on France and the World?
 

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Very improbable. To avoid a bubble, people would have to stop buying shares once their price approximates their intrinsic value.

This is practically impossible, though. At the beginning, the speculation turned beggars into millionaires. Of course, after this, all people wanted to join the rally. And even if the shares are priced ten times their real value - as long as you can find a bigger fool who will buy them for eleven times of the real value, it doesn't matter.
 
I've read that, at the begining, John Law wanted to create a land bank. Even if the convertibility-gold of the bank-notes wasn't assured, their valour would have been assured by agricultural land rents.
I don't know truly why this land system wasn't enacted.
But I guess that if Louisiana had been explored and colonized earlier than in OTL, there could be enough lands for the system.
I imagine that La Salle reaching the Mississipi instead of going to Texas in 1684/1685 could be a POD.
 
I don't know truly why this land system wasn't enacted.

I would be encline to think it would have given an earlier speculation on land property. Given how much the french bourgeoisie was quick to convert his gains into lands and acquisition of lordships, you'll have both the great nobility and the land-owner bourgeoisie that would have opposed that.
 
I've wondered about this myself. Would, for example, stabilizing the system -- enough that it goes a dozen or so years I stead of four before seeing a bubble burst -- allow paper money in France to become established?
 
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