AOM2

Bond markets were first established during the Italian Renaissance to accommodate for Florence’s extreme debt and have since affected the rise and fall of great nations and individuals throughout history. 
Florence fell into extreme debt because of the wars and recognized that they could not continue fighting if they didn’t have the money for it. As a last resort, they began taxing their citizens but with an interest rate in return. The bonds were considered liquid assets and citizens were allowed to buy and sell their bonds for cash. The limits to bonds were that increasing debt required more bonds and more bonds meant their value decreased.
The Bond market enabled the Rothschild family in particular Nathan Rothschild to make a fortune and gain power. The Rothschilds made their first fortune by betting on the outcome of the battle of Waterloo. The Rothschild brothers also located themselves in Paris, Frankfurt, London, Amsterdam, and bought and sold bonds depending on whether the prices were lower or higher in each city. 
In addition, The Bond Market greatly influenced the American Civil War because the in debt confederates relied on the Europeans to buy their bonds. The confederates' attempt to use cotton to pay off their bonds negatively affected the textile industry in the US. and they then had to limit the amount of cotton exported to increase the value of cotton. 
The Bond market also led the Argentina financial crisis in 1989. At the time, they were fighting both a civil war and a foreign war. As a result, the Argentinans spent more money than they could tax and faced serious inflation. Unlike the situation in Florence, the Argentinian government was unable to sell bonds because citizens feared inflation. In another futile attempt, they printed so much money to the point they couldn’t print any more because there was no more paper and the workers went on strike.

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