If you can’t stop yourself from FOMOing into shitcoins, don’t despair. Nothing has changed in over 300 years. Let me introduce you to “The Mississippi Bubble” (Disclaimer: investors spent money they couldn’t afford to lose, banks printed more money and the little guy got screwed)

Share:

In 1717 the Mississippi Company, chartered in France, set out to colonize the lower Mississippi valley, establishing the city of New Orleans in the process. To finance it’s ambitious plans, the company, which had good connections at the court of King Louis XV, sold shares on the Paris stock exchange.

In 1717 the lower Mississippi valley offered few attractions besides seasons and alligators, yet the Mississippi Company spread tales of fabulous riches and boundless opportunities. French aristocrats, businessmen and other members of the bourgeoisie fell for those fantasies, and Mississippi share prices SKYROCKETED.

Initially, shares were offered at 500 livres apiece. Two years later on August 1st, 1719, shares traded at 2,750 livres. By the end of the month, they had nearly 2x and traded at 4,100 livres. Less than a week later, they shot up to 5k livres. By December, they had pumped to 10k livres per share and euphoria swept the streets of Paris. People sold ALL their possessions and took out huge loans to buy Mississippi shares. Everyone believed they had found their rocket to the moon.

In early December, the panic began. Speculators realized that share prices were totally unrealistic and unsustainable. People started selling and an avalanche ensued. In order to stabilize prices, the central bank of France bought up Mississippi shares, but it could not do so forever. Eventually it ran out of money. So what did they do? What banks do best; they printed more money. The entire French financial system was placed within a bubble and while big speculators got out in time, the small investors lost everything.

I actually posted this not too long ago but with all the recent mania, it bears repeating. It also goes to show that FOMO has existed since the beginning of capitalism, banks will always win and if you’re a small fish in a big pond, nobody is gonna look out for your best interests except for you.

submitted by /u/deathtolucky
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