“But starting at the beginning of 1833, the total specie in the country rose swiftly from $31 million to $73 million at the beginning of 1837, for a rise of 141.9 percent or 35.5 percent per annum.”
“The enormous increase in specie was the result of two factors: first and foremost, a large influx of silver coin from Mexico, and second, the sharp cut in the usual export of silver to the Orient. The latter was due to the substantial increases in China’s purchase of opium instead of silver from abroad.”
http://mises.org/books/historyofmoney.pdf
my first question is does anyone know how specie creation (mining , minting etc) of the level mentiond above was funded?
was it existing specie or a combination of unbacked paper and specie or did a mining technology appear the vastly increased mine production?
35 percent increase per year of any money..specie or credit seems like quite a lot in any age and enough to negatively affect prices?
second…if a great deal of silver (coin im not sure about) didnt go to china due to booming opium…why did that silver automatically go into coin creating a great deal of specie increases?
would not silver producers get word quickly about booming opium in china and decling demand for silver and basically have to shut down do to a loss of a large silver client (china) and increasing existing silver coin value stateside?
i may be wrong here but i wouldnt think mexican coin would have its way to far beyond the texas territory. a sparsely inhabited place at the time?
i dont recall anything about it in the southeast history - where i am from.