
Speculative euphoria inflates financial valuelessness until reality forces a total collapse.
John Law persuaded the French crown that unbacked paper currency backed by vast, unexplored Louisiana territory could eliminate national debt. Investors scrambled to buy shares, trading real assets for paper certificates that skyrocketed in nominal value. When demands for gold and silver redemptions exposed the lack of actual wealth, the paper currency disintegrated, destroying the French monetary system overnight.

