Brutal Markets

Disclaimer : All the data and facts are taken from random websites and might be wrong.

The worst economic crash in human history, is not the Great Depression. But, the crash of 1340. The crash after which Black Death followed. Here are some interpretations of what happened.

1200-1340 was like a golden age for man. The economic boom which existed during those times was big. Silk, Cotton clothing were discovered. Shipping industry boomed and trade around the world started. That was the time, when the principles of free trade and free markets flourished. The world got globalized, Silk Route became famous. Civilizations interacted. Trade flourished.

Venice was like the trading hub of those times, the equivalent of New York or London. Fortunes were made at Rialto in Venice, the Wall Street equivalent of history. Whole bullion trade was globalized from Venice.
Gold was the currency primarily in India and China. Silver was the currency in most of Europe.

The inherent behavior of currency is, since it is the sole thing to keep, it is always overvalued.
Although, taking positions against overvaluation of a currency is a stupid thing to do, but it is always overvalued. Since, Silver bought everything in Europe, it was overvalued in Europe.
Gold bought everything in India and China, gold was overvalued in those countries.

Venetians discovered this great trade, and brought gold to Europe and sent Silver to India.
Mongols also looted Gold from India and China, and sent it to Venice. Venice, changed the currency standards in some European dynasties from Silver to Gold.

This led to oversupply of Gold in Europe. This oversupply lead to loss in value of Gold in Europe. But, how do you define Gold lost value, since it was their currency. Gold loosing value means, everything else increased in price including all important food items. Prices continuously rose from 1290-1340 relative to Gold and Silver in all of Europe, India and China. High inflation period started, because Europeans took too much Gold in their system, without increasing the productive output. This looted wealth, did not created prosperity in Europe but caused high inflation.

People started dying from Hunger. Rodents obviously spread on dead bodies, leading to a plaque called Black Death. Horrifying Black Death spread all over, killing 33% of the European population.

This thirst for Gold, eventually led to destruction of whole Europe. Remember that Wealth should never be accumulated, it should be distributed. But Mongols, wanted the Gold from everywhere. If you accumulate, all the gold in the world, you will not end rich, because gold will loose its value.