had been a great opponent of such system, accredited him to be appointed by the military as finance secretary, when they imposed the republic. When he took office, soon after the proclamation of the Republic, he put into practice all what he had criticized before. In January 1890 he enacted a new banking law inspired by the ideas of counselor Mayrinck, his banker and personal friend, who he without consulting the president appointed as head of the new Central Bank, signing the bill late at night in a scandal that would be the first of a series until his departure from the secretary. This however didn't stop the enacting of the new law, despite protests and opposition from secretaries like Demetrio Ribeiro and Campos Sales, who predicting the consequences of measures, got a central bank to São Paulo. Unregulated speculation rose as a direct consequence of the new law and reached all major sectors of the economy, with its highest volume reached in currency trading. The majority of political fallout has however been generated by rogue IPOs - as the new banking law effectively allowed authorized issuers to act freely, without any supervision or official punishment. For example, a company without any capital could launch an IPO, but also whenever it needed more money it could simply create new shares - with existing stakeholders losing rights to their stake if they refused to purchase any. Since the new law tied stock prices to their nominal values, there was no official oscillation of stock prices, and consequently, no way to negottate them directly in the Stock Exchange in order to both minimize losses or maximize profits. This in practice not only restricted the trading of securities to the OTC market, congesting it by supply, but also led to a deadlock for new issues in the stock market, locking out legitimate business that could have taken off out of the process, besides causing a total loss to many inexperienced investors. Instead of help to promote growth and structural change in the economy, the process led to one of the worst inflation outbreaks in the country's history, while the Brazilian economy suffered violent "collapse". The Encilhamento's "last straw" came with the financial shock wave caused by the default of Argentine government bonds following the 1st collapse of the Bank Baring Brothers at the end of 1890, and although the burst has been initiated