What role did government paper money play in early booms and busts?

0:00The first government paper money ever was 1690 in Massachusetts. Before that, gold was money. The only way the government could do anything was to clip the coin, to base the coin. When paper money comes in, the great new invention for the government means you could just print money and live. Essentially, John Law, the Scottish adventurer, just gets a hold of the royal government in Paris and convinces him he should be the central banker and print money. And through unlimited inflation, you can wipe out the public debt, you can bring prosperity and all the rest of it.