alt Hacker NewsWhat happened to all the gold Spain got from the New World? (1985)
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As I understand it, some of the silver was siphoned off in trade with China (via the trans-Pacific route to Manila). China needed continuing silver imports because silver was not used there in the form of standardized coinage, but rather in ingots that were weighed and subdivided, with inevitable continuing loss.
> The problem was that the conquest of the New World left Spain with a lot more money, but not that much more wealth, if you follow me.
ELI5, please!
Some of all this gold is still on display in Spain. Earlier this year my wife and I visited Granada in southern Spain. Vast amounts, truely impressive, of gold are exposed in its Cathedral and in the burial place of Emperor Karl (Charles/Carlos) and his wife, Isabella. Alhambra is still the #1 sight there but if you can spare the time, do visit these two places. They are co-located in central Granada.
It got also invested in religious ceremonies like https://en.wikipedia.org/wiki/Thirty_Years%27_War
> For the latter part of the 1500s and on into the 1600s Spain was a debtor nation, spending more abroad than it took in. The result was a net outflow of gold and silver. Attempts were made to restrict the export of precious metals, but without much success. In the end it all simply dribbled away. The problem was that the conquest of the New World left Spain with a lot more money, but not that much more wealth, if you follow me. They didn’t realize that until too late, and suffered centuries of poverty as a consequence.
Sounds like America since the second half of the 20th century.
A solid 50% of this entire thread is people arguing about inflation and bikeshedding the concept of money. Amazing. (COVID gets an honorable mention. Six years on now, but hey. Stay mad.)
Some of it ended up on the sea bed.
With all this gold, Spain went on a buying spree, weapons, art, churches etc - and the sellers(rest of Europe) industrialized as the gold trickled down into THEIR economies. When the gold no longer arrived, Spain went into a steady decline as their rich upper crust of RC Churche, Kings, Queens, Lords, Ladies etc. and eventually became democratic after Franco.
Marx wrote about commodity fetishism. Perhaps the ultimate version is a belief gold is innately valuable. It has valuable properties, but almost its sole function is to be rare and desirable. That we now use gold for electronics in some ways undermines its rei-ification as the personification of value.
Spain fucked up. They mistook the gold for something more valuable than Labor. The Merino sheep of Spain were a better bet, in the long term.
The Spanish gold disappeared into economies with a better sense of what value is.
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"while the flood of gold into Spain in the 16th century seemed like a big haul at the time, by modern standards it was a trivial amount. Total world gold production during the 1500s is estimated to have been around 36 tons;"
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World silver production during the 16th century was around 23 thousand tons[1]. Silver was closer in value to gold back then too, at around one tenth the value per weight. The economic impact of new world gold was a rounding error compared to the impact of silver.
If you have a mental image of Spanish conquistadors sparking global inflation purely by looting Inca gold, erase it. The real culprit was silver extracted from Potosi and a few other New world mines.
[1]https://digital.library.unt.edu/ark:/67531/metadc40312/m2/1/...