8 Pages

the Eastern silver countries

A ‘monetary disunion’?

The collapse of the silver price and the end of bimetallism had dramatic consequences for those countries, in the East and in Latin America, which based their currencies on silver. In, effect there was a major ‘monetary disunion’ between the ‘gold’ and ‘silver’ countries, when the sharp fall in the relative price of the latter suffered a forced devaluation caused by events in Europe and America events totally unrelated to their own economic needs. In modern terms they suffered from a ‘disease of the reference currency’.