The Mississippi Land Bubble

John Law was a Scot and economist before his time. he established the first central bank (France) that issued paper money.

Law exaggerated the wealth of Louisiana with an effective marketing scheme, which led to wild speculation on the shares of the company in 1719. The scheme was to have the success of the Mississippi Company combine investor fervor and the wealth of its Louisiana prospects into a sustainable joint-trading company. The popularity of company shares were such that they sparked a need for more paper bank notes, and when shares generated profits, the investors were paid out in paper bank notes.

In 1720, the bank and company were united and Law was appointed Controller General of Finances to attract capital. Law's pioneering note-issuing bank was successful until the French government was forced to admit that the number of paper notes being issued by the Banque Royale were not equal to the amount of metal coinage it held.
The "bubble" burst at the end of 1720, when opponents of the financier attempted en masse to convert their notes into precious metal, forcing the bank to stop payment on its paper notes. By the end of 1720, Law was dismissed from his positions by Philippe d'Orléans, regent of France for Louis XV. Law then fled France for Belgium.