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Spain’s colonies funneled huge amounts of gold and silver into the European economies without a complementary increase in productivity to absorb it, causing mas
by throwup238 10mo ago
Spain’s colonies funneled huge amounts of gold and silver into the European economies without a complementary increase in productivity to absorb it, causing massive inflation.
A ship for transatlantic shipping might have first cost 100,000 maravedí to build and equip before the treasure fleet expeditions, but afterwards with so much gold flowing into the economy and lots of competition for a limited ship building industry, the costs would inflate to 1 million maravedí (number roughly from memory). Same with the canons and shot, animals and sailor salaries, and so on.
Meanwhile, shipbuilders with all their newfound money are competing for blacksmiths, the outfitters are competing for livestock and horses, and so on. This puts lots of pressure on the rest of society which might need the iron for farming tools and the livestock to survive the winter, which they can no longer afford since the conquistadors and their merchants can pay a lot more in gold. In the end the maravedí accounts look bigger but represent the same amount of physical goods or labor.
Repeat this process across the whole economy and it throws everything into chaos. Some people here and there get rich, but economy wide it’s a total wash. Any wealth created for the state mostly just went into paying for wars because the inflation worked its way up through salaries.
- ares623 10mo agohold up a minute
- financetechbro 10mo agoWe’re sadly living through the same thing right now
- username135 10mo agoTime is a flat circle
- colechristensen 10mo agoAnd people won't point to the actual causes: - The COVID free-money needed to be less and to end sooner - The COVID restrictions needed to be less and end sooner The disease didn't go away, we just at one point decided we were done with restrictions even though conditions didn't change. We needed restrictions ONLY during spikes and more consideration needed to be given to the long term economic effects of COVID policies. An example graph, when restrictions should have been on or off left as an exercise to the reader https://wgntv.com/wp-content/uploads/sites/5/2022/01/tuedeath.jpg https://wgntv.com/wp-content/uploads/sites/5/2022/01/tuedeat... The problem is it became a non-expert political issue where people who knew meme-facts based on their social bubble only really argued absolutist policies against stone wall opposition. We needed people in a minmax mode arguing about specific levels of risk vs reward to set optimums, instead you had 0 risk folks screaming at 0 restriction folks screaming back with the middle entirely excluded. (We'll STILL get people on both sides responding here)
- ares623 10mo agoI was in NZ during COVID. I was adamantly pro-lockdowns. In hindsight, it was a very selfish view. It benefitted my family directly and I was more than happy to follow the rules and scoff at those that didn’t. I won’t claim to know what the appropriate response level should have been back then. But it is very clear that the whole affair has hurt and damaged people and society irreparably. The only winners are the wealthy who scooped up assets at never-before seen interest rates.
- wkat4242 10mo agoYeah the lockdowns have really damaged my mental health. And the mask mandates even more so due to ancient trauma (where I nearly suffocated and have very bad associations with breathing that feels obstructed). But that's a very personal reason that I understand couldn't be accommodated for back in those days. I don't know if it was worth it or necessary but tbh I just try to forget the whole phase ever happened. For me it was a few lost life years and I'm still trying to get back to where I was mentally. I do feel those things were really overlooked back in the day. But I'm also glad I'm not the one making such decisions which can't be easy. The only thing I have an outspoken opinion about were the curfews we had here. Meaning the available time for things like shopping was more compressed and thus the shops were a lot busier than normal which was super counterproductive. And it didn't stop partygoers because they simply slept over.
- littlestymaar 10mo agoThis entirely misses the fact that Spain became a European superpower during that period because war was then done by mercenaries… > Any wealth created for the state mostly just went into paying for wars because the inflation worked its way up through salaries. Wealth created for the state just went into paying for wars because that what mattered to the early modern aristocracy and that's what they wanted to pay with their additional money. From the point of view of the Spanish elite of the time, their “wealth” increased dramatically during that period, it's just that this don't fit your or my criteria for wealth.
- jiggawatts 10mo agoSounds an awful lot like the AI data center build out sucking up resources at the expense of the rest of the economy. E.g.: Sam Altman cornering the market for computer memory.
- panick21_ 10mo agoIt was not actually a massive inflation. It was a little inflation but people were not used to it.