A Six fold increase in prices occurred across Europe between approximately 1470 and 1620 after a huge onslaught of goods were shipped from the newly conquered Americas to Western Europe by the Spanish. Immediately upon contact with the Americas by Christopher Columbus, goods were transported to Spain on board their exploration ships. Over the course of 70 years the Spanish created a convoy system that transported the expropriated wealth of the indigenous peoples of South, Central and North America across the world.
Routes were formally set up by the monarchy to send galleons across the Pacific Ocean via Manila and across the Atlantic along what was known as the Spanish Route. Ports of Veracruz, Portobello and Cartagena were the main stops for the ships before they would rendezvous at Havana and return as a group across the Atlantic. The Manila Route received ships from the Philippines at Acapulco and thus Asian goods found their way to the Americas. Mule trains were set up in Acapulco to bring Mexican bounty - items such as precious metals, gems, pearls and lumber - to the ships for export.
By law, merchant vessels from the colonies could trade only at the port of Seville and the Spanish king taxed everything they shipped at 20%. The tax became known as the Quito real (royal fifth). The Habsburg family became the wealthiest ruling family by the end of the 16th century but inflation caused by the influx of silver and gold from the Americas finally damaged the Spanish economy. Silver coin minting quintupled in central Europe between 1460 and 1530 and easy money is thought to have brought higher prices to the populaces. An upsurge in population occurred as well, after a rebound in births following the Black Death, which further increased demand for goods.
The Hapsburg's monumental wealth was used to fight wars with the Ottoman Empire and other powers in Europe and once inflation became rampant Spain found that it was unable to pay its debts. By 1690 European bankers withdrew their financial support, which further undermined the country's economy.
Eventually, the output of the mines in the colonies dropped off and the number of ships in the treasure fleet ebbed and flowed. Piracy in the Caribbean region and skirmishes with the British and French also put pressure on the fleet. Complex financial conditions developed in Europe between the landowners and the peasants and the inflation brought about farmland protections and an increase in unemployment. The inflationary period ended, finally, once the easily extracted metals of the 'New World' were played out and prices in Europe remained relatively stable until late in the 18th century.
Routes were formally set up by the monarchy to send galleons across the Pacific Ocean via Manila and across the Atlantic along what was known as the Spanish Route. Ports of Veracruz, Portobello and Cartagena were the main stops for the ships before they would rendezvous at Havana and return as a group across the Atlantic. The Manila Route received ships from the Philippines at Acapulco and thus Asian goods found their way to the Americas. Mule trains were set up in Acapulco to bring Mexican bounty - items such as precious metals, gems, pearls and lumber - to the ships for export.
By law, merchant vessels from the colonies could trade only at the port of Seville and the Spanish king taxed everything they shipped at 20%. The tax became known as the Quito real (royal fifth). The Habsburg family became the wealthiest ruling family by the end of the 16th century but inflation caused by the influx of silver and gold from the Americas finally damaged the Spanish economy. Silver coin minting quintupled in central Europe between 1460 and 1530 and easy money is thought to have brought higher prices to the populaces. An upsurge in population occurred as well, after a rebound in births following the Black Death, which further increased demand for goods.
The Hapsburg's monumental wealth was used to fight wars with the Ottoman Empire and other powers in Europe and once inflation became rampant Spain found that it was unable to pay its debts. By 1690 European bankers withdrew their financial support, which further undermined the country's economy.
Eventually, the output of the mines in the colonies dropped off and the number of ships in the treasure fleet ebbed and flowed. Piracy in the Caribbean region and skirmishes with the British and French also put pressure on the fleet. Complex financial conditions developed in Europe between the landowners and the peasants and the inflation brought about farmland protections and an increase in unemployment. The inflationary period ended, finally, once the easily extracted metals of the 'New World' were played out and prices in Europe remained relatively stable until late in the 18th century.
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