walleke

G-20 Summit: A New World Order?

I take issue with Harrison's description of 16th century Spain. They did not "find" gold, they stole it. The Spanish suffered from an aristocratic (and medieval) disdain for work and trade. They expelled the Jews and Moors who populated the merchant class. Hence, they used their stolen wealth to import goods from the rest of Europe.

The increase in aggregate demand combined with increasing population surpassing pre-plague levels created the two hundred year price inflation. The inflation of the sixteenth century was an indication of people becoming wealthier, not poorer. This was not a monetary inflation caused by increasing money supply. No monetary inflation was associated with the much larger increases in gold stock associated with the gold rushes in California, Alaska, Australia, and South Africa.