AOM 2

Sarah Laskin

AOM 2

Through history the bond and stock markets have been directly influenced by various events and times in history. A great example of this is gold during the Age of Exploration. Before the Age of Exploration, gold was fairly rare and sold for high prices. Only the most wealthy could afford gold, and it was a universal trading currency and status symbol of wealth. However, after expeditions to the new world, gold became more abundant, as the new world had many gold deposits in their rivers and mountains.

European explorers thought they would be rolling in wealth when they brought gold back from the new world. More gold being circulated into the European trading economy actually made the value of gold go down: It still was valuable but easier to obtain. The concept of supply and demand is demonstrated here: The more gold there was, the less it was worth. This changed the gold market because of the sudden influx of the product. 

Another example of the bond and stock market changing through history is later in history, during the American civil war. Both the north and south had different economies, the North being more industrial and factory oriented, and the south being more agricultural and spread out.

Both sides needed massive funding for the war (the South more so than the North), and allowed other countries to buy bonds. However, this was a risk because if one side was defeated, they would not be able to pay the country back as promised. For this reason, most outside countries put their money with the North. However, the farming economy and especially important cotton production of the south was important to the world’s economy, and the south (who by this point almost had a monopoly on the cotton) drove thr price of cotton up. Unfortunately, this was short-lasting because the North took New Orleans, one of the most critical shipping points for the South. After cotton shipping slowed, the South’s revenue became scarce and slowly they lost momentum in the war, allowing for a victory for the north.

When being analyzed, most wars are won not based on manpower or strategy, but money and resources. Even though the South had a larger population and more desire to fight, they still were taken down by the North because of their lack of technology and funding. Technology, manpower, and even strategy come from funding, and without money the civil war arguably wouldn’t have happened.