In the previous section (available here), we discussed what was happening at the monetary level during the Middle Ages. Today we will look at the time after Christopher Columbus discovered America. Despite appearances, this revolutionized the economic situation of almost all countries in Europe. "Golden period". Geographical discoveries opened the way for European powers to conquer new continents. However, we are most interested in something else. Namely, how it affected the economy. If you've been reading our series closely, you know that the Old World had a bit of a problem with the availability of gold. The Crusades may have helped some, but there was still not enough gold. The latter (plus greed and a tendency to cheat their subjects) provoked rulers to mint as many coins as possible from the least amount of gold and silver. However, after the Spaniards reached America and began importing bullion from there, the amount of the latter on the markets jumped several times. It was not until the second half of the 16th century that the supply of gold stopped growing drastically. The situation with silver was even worse. In the 17th century there was as much as 15 times more silver than gold in Europe. Theoretically, you can't get enough of it. Unfortunately, this is so much theory. The influx of gold led to a drop in its value and thus to a jump in prices. You know, it's like someone suddenly pumped a lot of new dollars or zlotys into the market. The effect would have to be inflation. Sounds familiar, right? But the problem affected mostly Western Europe, and all this turned out to be an opportunity for Poland, for example. As someone wise once observed, human work cannot be printed. Our ancestors had an economy based on grain exports. In turn, the grain started to become more expensive due to the drop in prices of precious metals. For the Polish-Lithuanian Commonwealth the times were truly golden! Unfortunately, already in the 17th century grain prices collapsed. Note that this was also partially correlated with a decreased supply of gold. Note that along with economic problems came political ones. This is the period Henryk Sienkiewicz wrote about: the Chmielnicki Uprising ("Ogniem i mieczem"), the Swedish Deluge ("Potop") and wars with Turkey ("Pan Wołodyjowski"). We can only regret that the aristocratic elite somehow overestimated the prosperity, instead of thinking a few steps ahead and investing their large earnings in development. Once again we will repeat ourselves: it all sounds suspiciously familiar... Talar reform However, let's get to the level of strictly money issuance. At that time, the thaler reform was carried out in Europe. The thaler was a generic term. It was just a type of coin that was minted under different names in different countries. For example, in 1526. Henry VIII (yes, that famous bigamist) began minting his crowns - a type of thaler - in England. An interesting fact is the fate of Sweden. Thalers were minted there since 1534, but the problem was that Sweden, famous today for its prosperity, was then a very poor country. Poverty, however, enhances creativity. So the Swedes came up with the idea of not minting coins made of gold or silver. After all, what's the point if there is... copper. Yes, they began to produce money from this raw material. Of course, the inhabitants of the kingdom didn't want to use such miserable coins (after all, it's a big disgrace!). That's when the country's authorities came up with an innovative idea. In a sense, they created a fiat currency. What is it about? They forced the Swedes to use copper coins. Despite the fact that they had no real value in themselves, the subjects were told that they had to pay with them, because the king told them to! Let's understand the rebellious Swedes. It's as if someone ordered them to pay with pieces of paper! Oh, wait... One by one, though. Coins for killing This was not the end of the Swedes' adventures with coins. In 1633, platmyntes appeared in circulation. They were money. Apparently, because in practice they probably resembled gym equipment. A 10-inch platmynta weighed... 20 kg. You could probably kill someone with a block like that and not pay for a roll, ham and cheese, right? They looked more or less like this - seriously, it's hard to believe that someone came up with, something like this! We hope that after this paragraph, you will stop complaining about the "change" buzzing around in your wallets! Paper money We've already mentioned the idea of money being in the form of paper money. All right, we wrote it in a rather humorous tone, but to tell you the truth, this vision is not original. Banknotes were used centuries earlier by the ancient Chinese and later even by the Mongols. Europeans, who had despised the former and the latter for centuries, began to use them later. At this point we return to England. It was the people of that country who started using banknotes first - at least as far as Europe is concerned. But why did they come up with such an idea? Out of convenience! They deposited their savings in the form of bullion in some safe place, like the national treasury. There, in response, they received a voucher confirming the receipt of funds. With time, alongside this solution, goldsmiths appeared on the market as depositories. And it was they who started to store gold, and
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