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The First Gold Rush

Shortly after Columbus “discovered” the Americas, the Spanish and Portuguese kings began to

mine the riches of native Indians throughout North and South America. Their hungry pursuit of

gold and silver brought a great influx of money from all corners of the world. This pursuit

unleashed a force that could not be contained.

Between 1500 and 1800 C.E., the Spanish and Portuguese brought literally tons of silver and gold

into circulation. Unfortunately, the Spanish and Portuguese royalty did not heed the lessons of

their European neighbors. They consumed heavily, and they also could not get enough. So much

wealth flooded their economies that a wave of inflation began that could not be stopped. There

was so much gold and silver that the rich lined everything in it, from their buildings to their

clothing, wearing their wealth as a symbol of power and status. Although gold and silver

continued to pour in, the kings spent it faster than it could be shipped. Eventually, they were

forced to borrow from other governments, who did not hesitate to charge them a high premium

for their expensive lifestyles. Jack Weatherford best describes the force of money created during

this time in his book The History of Money: 22