{"id":18985,"date":"2016-03-18T10:58:13","date_gmt":"2016-03-18T15:58:13","guid":{"rendered":"http:\/\/olduvai.ca\/?p=18985"},"modified":"2016-03-18T10:58:13","modified_gmt":"2016-03-18T15:58:13","slug":"the-ecb-and-john-law","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=18985","title":{"rendered":"The ECB and John Law"},"content":{"rendered":"<header class=\"wrapper entry-header page-header\">\n<div class=\"title-with-sep single-title\">\n<h3 class=\"entry-title\"><a href=\"http:\/\/www.cobdencentre.org\/2016\/03\/the-ecb-and-john-law\/\" target=\"_blank\">THE ECB AND JOHN LAW<\/a><\/h3>\n<\/div>\n<\/header>\n<div class=\"entry-media\">Last week, the ECB extended its monetary madness, pushing deposit rates yet more negative. It is extending quantitative easing from sovereign debt into non-financial investment grade bonds, while increasing the pace of acquisition to \u20ac80bn per month. The ECB also promised to pay the banks to take credit from it in \u201ctargeted longer-term refinancing operations\u201d.<\/div>\n<div class=\"wrapper\">\n<div class=\"grids\">\n<div class=\"grid-8 column-1\">\n<div class=\"single-box clearfix entry-content\">\n<p>Any Frenchman with a knowledge of his country\u2019s history should hear alarm bells ringing. The ECB is running the Eurozone\u2019s money and assets in a similar fashion to that of John Law\u2019s Banque Generale Priv\u00e9e (renamed Banque Royale in 1719), which ran those of France in 1716-20. The scheme at its heart was simple: use the money-issuing monopoly granted to the bank by the state to drive up the value of the Mississippi Company\u2019s shares using paper money created for the purpose. The Duc d\u2019Orleans, regent of France for the young Louis XV, agreed to the scheme because it would provide the Bourbons with much-needed funds.<\/p>\n<p>This is pretty much what the ECB is doing today, except on a far larger Eurozone-wide basis. The need for government funds is of primary importance today, as it was then.<\/p>\n<p>In Law\u2019s day, France did not have a central bank, such as the Bank of England, managing the issue of government debt, let alone a functioning government bond market. The profligate spending of Louis XIV had left the state three billion livres in debt, which was the equivalent of 1,840 tonnes of gold. This was about 85% of the world\u2019s estimated gold stock at that time, at the livre\u2019s conversion rate into Louis d\u2019Or. John Law would almost double that by June 1720, with unbacked livre notes issued by his bank.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>THE ECB AND JOHN LAW Last week, the ECB extended its monetary madness, pushing deposit rates yet more negative. It is extending quantitative easing from sovereign debt into non-financial investment grade bonds, while increasing the pace of acquisition to \u20ac80bn per month. The ECB also promised to pay the banks to take credit from it [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[56,122,7380,13013,233,282,285,333,3676,13014],"class_list":["post-18985","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-england","tag-central-bank","tag-cobden-centre","tag-deposit-rates","tag-ecb","tag-european-central-bank","tag-eurozone","tag-france","tag-john-law","tag-mississippi-company"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18985","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18985"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18985\/revisions"}],"predecessor-version":[{"id":18986,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18985\/revisions\/18986"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18985"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}