Credit Crunch 600 years ago

“The problems did not take long to materialise. Fragmentation and rebellion broke out in the Persian provinces as Timur’s heirs jostled to take control of his empire. But more structural difficulties were unleashed by a global financial crisis in the fifteenth century that affected Europe and Asia. The crisis was caused by a series of factors that resonate 600 years later: over-saturated markets, currency devalnations and a lopsided balance of payments that went awry. Even with the growing demand for silks and other luxury products, there was only so much that could be absorbed. It was not that appetites were sated or that tastes had changed, it was that the exchange mechanism went wrong: Europe in particular had little to give in return », ceramics and spices that were so highly prized. With la effectively producing more than it could sell abroad, there to keep buying goods dried up – The result has often been described as a “bullion famine’.”

Frankopan P., The Silk Roads, ch 10, pg. 197, Bloomsbury, 2016

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s