Spain: Past and Present

The More Things Change...

The Spanish Empire spent a fortune waging wars, acquiring territory, subjugating civilizations, spreading its religion and buying stuff.  Spain paid for its empire by ridding North and South America of its silver.  The Spanish elites racked up quite a bit of debt consuming goods from foreign lands.  Merchants were more than happy to sell stuff for Spanish silver.
 





A very large, very wealthy empire. Wealth would be part of the empire's undoing. Image taken from Wikipedia.

The empire nearly spent itself into oblivion.  The prices on goods rose at a pace faster than wages - otherwise known as inflation.  The resulting inflation due to circulating Spanish silver is known as the Price Revolution.  Spanish silver was the first post-Renaissance reserve currency, and up until the 1850s it was legal tender in the United States.  Unfortunately, the silver mines eventually began to produce less silver and so the Spanish became less wealthy.

...The More Things Stay the Same
Here we are, more than 500 years since Spain began its conquest, and look at the situation Spain is in.  Once again, Spain is mired in debt; they've sent their money to foreign lands with no way to encourage it to come back.  This time it is not a consequence of gutting the silver mines of the Americas and outspending everyone in the conspicuous purchases department.  This time it was a consequence of converging interest rates.  The jig is up for Spain: no silver, no easy credit, no service.