The Saga of Spanish Silver: an Austrian Perspective – Part 1, Before the Storm

Hi everybody. This is is my first blog post so let’s give a bit of an introduction here.

This is part one of a series of blog posts about the impact of the huge quantities of Spanish silver which started arriving in Europe in the second half of the XVI century. While massive price inflation is the only widely known consequences, there was so much more to it. The arrival of such a huge mass of precious metal had enormous consequences, many little known to the general public. Always remember these posts are written from an Austrian Economics prospective so many of my conclusions and comments may sound different from “mainstream” history. I’ll write a new blog post about it every fortnight (two weeks). Enjoy!

Ever since the days of the Roman Republic silver had been the main currency of Europe. Gold has always been the proverbial precious metal but, in reality, silver coinage was what people used in their everyday transactions. These ancient coins were a far cry from the modern, well minted descendants: they were invariably struck on small, very thin silver discs, often of low purity. The main Spanish currency when the first conquistadores sailed for the Americas was the Castillian real, first coined during the reign of Pedro I (1350-1369). It weighed a paltry 3,4 grams and was so thin it could be easily bent. This was due to both the scarcity of silver ore and the lack of efficient mining and refining technologies.

A bent real from the XV century

A one real coin issued by Pedro I, struck by the Seville mint