Impact of Silver During the 16th-18 Centuries
Impact of Silver During the 16th- 18th Centuries
In the year 1571, the global trade started based on Boxer’s logic. The city of Manila was gthe first ever city to initiate trade across the Pacific Ocean. Global trade is the exchange of valuable and substantial products that are desired by a continent, and in this case, it was silver. Silver played a prominent role throughout the global trade with China being the primary end-market for world silver for several centuries. (#2, p.393) The reason China was the primary source of silver is the result of having significantly high prices, whereas other continents had more suitable pricings. The central point is that all the great silver mines in both hemispheres sold ultimately to China. (#1, p. 202)
According to historian Herman Van der Wee: “in the Far East, silver was valued much more highly than gold in comparison with western Europe, so the western merchant had everything to gain from paying for his purchases in the east in silver.” (#2 p.394) This passage helps the audience better comprehend the importance of silver toward these continents and China to result in such high pricings (explain the quote). Throughout the centuries, other continents managed to reach the top in the sellings of silver, although with China remaining fairly constant, it resulted in China regaining being silver’s primary importer. Despite China’s success, a few issues may have occurred during these trends. The first issue has to do with the fact that China has taken full responsibility for holding the highest pricings compared to other continents. The second issue concerns global market reactions to these unusually higher values of silver in China which lead to the arbitrage trade, which is the value of a product being unusually higher than other areas which have a cheaper value for the product. But this arbitrage issue is crucial and nontrivial when placed in the context of monetary and trade history at the global level. (#2 p.396)
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In the year 1571, the global trade started based on Boxer’s logic. The city of Manila was gthe first ever city to initiate trade across the Pacific Ocean. Global trade is the exchange of valuable and substantial products that are desired by a continent, and in this case, it was silver. Silver played a prominent role throughout the global trade with China being the primary end-market for world silver for several centuries. (#2, p.393) The reason China was the primary source of silver is the result of having significantly high prices, whereas other continents had more suitable pricings. The central point is that all the great silver mines in both hemispheres sold ultimately to China. (#1, p. 202)
According to historian Herman Van der Wee: “in the Far East, silver was valued much more highly than gold in comparison with western Europe, so the western merchant had everything to gain from paying for his purchases in the east in silver.” (#2 p.394) This passage helps the audience better comprehend the importance of silver toward these continents and China to result in such high pricings (explain the quote). Throughout the centuries, other continents managed to reach the top in the sellings of silver, although with China remaining fairly constant, it resulted in China regaining being silver’s primary importer. Despite China’s success, a few issues may have occurred during these trends. The first issue has to do with the fact that China has taken full responsibility for holding the highest pricings compared to other continents. The second issue concerns global market reactions to these unusually higher values of silver in China which lead to the arbitrage trade, which is the value of a product being unusually higher than other areas which have a cheaper value for the product. But this arbitrage issue is crucial and nontrivial when placed in the context of monetary and trade history at the global level. (#2 p.396)
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