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"Before long, the banknotes were trading at more than their value in silver, and Law was made Controller General of Finances, in charge of the entire French eco
by ciphershot 7y ago
"Before long, the banknotes were trading at more than their value in silver, and Law was made Controller General of Finances, in charge of the entire French economy."
This is super interesting. Does anyone familiar with the subject matter have an idea why?
- tim333 7y agoI'm guessing here but the price of currencies or anything else tends to get set by supply and demand. According to Wikipedia at the time: >The wars waged by Louis XIV left the country completely wasted, both economically and financially. The resultant shortage of precious metals led to a shortage of coins in circulation, which in turn limited the production of new coins. So there may have been a short supply of money especially the metal variety. Someone selling say grain may have taken paper money representing not much silver because there were no alternative buyers with bags of silver available. Bitcoin also trades for a lot despite not having much value because some people want them and there aren't many available.