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One of the forerunners of the fashionable financial formula of his young men is an apostate, a baby and a woman who was sentenced to death after subduing a guy with a sword in a duel.
We are talking about John Law, born on April 21, 1671 in Edinburgh, Scotland, into the family of merchants and goldsmith bankers, which allowed him to have a solid education in mathematics and economics from an early age.
But the law betrayed him along with the numbers, him and the alcohol. 23 years ago, we spent our days in London in bookmakers and courting girls. On April 9, 1694, a young man named Edward Wilson surrendered in broad daylight and served his area to break the law, from which he defended himself and took his life.
Right now, Law is living with a married woman.
Shortly after his arrest, Law escaped crime and lived on the run for a time in separate cities such as Amsterdam, Venice and Paris. To make a living playing cards. The attractive thing is that I have no money to make, still legitimately because he is an expert in probability theory.
His specialty was Faro or Pharaoh, a game that used the French bar of 52 cards, without comforts. The law knows that the player coming from the bench or space has a slight statistical chance for the other players. So, by coming to a city and building ourselves like a house in this high-stakes card game, in the end, we’ve gained much more than we’ve lost.
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What Law learns from his father
The final results of the law in Paris caught the attention of the chief of police, who appointed foreign minister through an issue accompanied by other people with intentions who bought a stately space with gambling money. But the minister toned down the political measures and allowed them to remain in the French capital.
At the time, France was almost at peace after many wars. At one point, the king is faced with the need to finance gold and silver bars to pay his soldiers. The challenge is that the entire economy runs on gold and silver, and there are enough reserves for everything.
Law understands the dilemma well because his father was a goldsmith and in Britain many other people who work with valuable metals have switched to banks. Just as goldsmiths had safes in their shops, fearful consumers stored their gold with them. They deposited gold, and over time, other people used those receipts to buy pieces or pay off debts. Thus, those revenues will be converted into a kind of paper money.
The goldsmiths will then take it a step further and begin preparing a recovery check that can be used as cash, but without depositing the gold to be returned. This means that goldsmiths are making money. But if each and every one who has checks to cash backs off every time they receive their money, gold won’t tend to provide money for each and every one.
Through the intellectual maturity of law, he developed a radical financial theory that challenged the traditional ideals of his time. At one point, the law states that the price of cash cannot be determined by gold and silver, but by acceptance as true by the government that issued it. This idea, known as the “paper cash system,” has become a central pillar of his theory.
The Law wrote in detail about his theory and published his most influential work, “Money and Commerce Considered” in 1705, where he presented his ideas on the issuance of paper money in reaction to genuine assets, such as securities and natural resources. In essence, the law proposes that paper money can be used to stimulate economic expansion and dependence on metallic coins.
Their concepts generated controversy, but in the end they found the right time for practical tasks. The ambitious sender spent a year strengthening his contacts with the French aristocracy. In 1715, Duke Philippe d’Orléans became regent of France under King Louis XV, who was too young to be governor. And Ley becomes the regent’s monetary regulator.
In this position of power, the law implemented its formula of paper money returned to genuine assets. He founded the Banque Générale in 1716, which had a monopoly on issuing banknotes in exchange for shares of the Mississippi Company, a company exclusive to the French colonial economy in North America. This is a position for frenzied hypotheses about the Mississippi Company’s stock and a source of gold for investors of all walks of life who buy stocks and notes in hopes of making a fortune.
The combination of entitlement policies and unbridled scenarios gave rise to an era of increased economics known as the “Mississippi Bubble. “During this time, the Mississippi Company considered it the safest and most successful investment, and claimed stocks and notes at an exponential rise. The obvious rule of law disappeared and he became a central figure in the French court.
Economic euphoria reached its peak in 1719, when the law appointed him Comptroller General of the Finances of France and allowed him to have unlimited power over the country’s economy. However, despite its obvious success, the bubble was on the verge of bursting.
The euphoria of the “Mississippi Bubble” cannot be sustained indefinitely. The request was made at a time when many other people were looking to sell their shares and tickets to profit from their profits. This caused a cascade of publicity and disaster for asset values as a reaction to paper money. In 1720, the bubble finally hit, triggering an unprecedented currency crisis.
Confidence in the legal formula was destroyed and the paper money it had defended so passionately became worthless paper. The streets of Paris attract other people desperate to sell their tickets and shares in a flexible online marketplace. The economic crisis that followed was devastating for the French economy and has already caused many others to fall into monetary ruin.
With the head of the bubble, John Law’s position becomes untenable. He fled Paris in the dead of night, and became a series of exiles in various European countries. He died of pneumonia, alone and poor, in Venice in 1729.
France abandoned paper money for the time being and sought to use gold and silver coins for several decades.
Law is said to be a brilliant, reckless, and arrogant guy. But in reality, the masculine concepts of the new economists relate to a large extent to what the law wrote and purported to apply for centuries.
Sources: InBestia, ZendaLibros, Forbes, Libertad Digital, NPR
What is financial speculation and what are its risks?
Many investors believe that they can make a lot of money from the recent market turbulence with active management of their investment card, rather than dropping cash into a giant investment budget into a giant square. This allows them to earn more benefits on the main square. .
We also know that there is no such thing as a risk-of-loss reversal. This stimulates some investors, especially those who can calculate the variance between the assumed risk versus the option of a higher profit, but have to be happy. The threat assumed through the individual in the money market is lost to his money.
It is clear that each user’s goals depend on their circumstances. The setbacks of a 30-year-old and a 60-year-old are likely to be very different. Use the focus to get other people to protect their money more to protect their budget for shorter periods of time. A younger user has more flexibility to have more time in the face of any monetary loss.
A practitioner is a user who is able to practice long-term and act before things happen. But I have to be careful because no one can expect the long term with 100 percent accuracy.
These are large-scale, targeted investments with own resources. Although the council is not intrusive in this type of monetary modality without knowing the excessive cunning of the market, its monetary tools and basically given that they are in conflict before knowing if the return received in the long term is expected if everything works next.
I need to have peace and energy. It is a fast-paced monetary activity that requires research, dedication, wisdom and determination at all times to continue without wasting a lot of money if the desired goals are not achieved.