Which 1720 speculative bubble collapsed after John Law’s paper-money system failed in France?

The Mississippi Bubble was the 1720 speculative collapse linked to John Law’s paper-money system in France.

John Law controlled the Mississippi Company, which claimed rights to trade and develop French territories in North America. The company’s shares rose rapidly as Law connected its business to the Banque Royale and issued paper currency. Investors were attracted by easy credit and highly optimistic expectations.

Confidence broke down when the volume of paper money and share speculation became unsustainable. Investors rushed to exchange notes and shares for hard money, causing both the company’s stock and the currency system to collapse. Law fled France in 1720.

The Mississippi Bubble is often paired with Britain’s South Sea Bubble, which also burst in 1720. The two episodes helped shape later debates about central banking, paper currency, government debt, monopolies, and the dangers of speculative finance.