The Florin was a gold coin struck in Florence Italy from 1252 to 1533. Containing 0.1125 troy ounces of find gold, the metal content and design of the coin did not change during the near entire three century period it was produced.
The Florin’s consistency of design and metal content led to it becoming the dominant medium of trade throughout Europe. The prevalence of Florentine bank branches across the country led to a wide proliferation of this money. The coin was so successful, that it outright replaced silver bars as a means of payment in large transactions, and eventually spawned a number of copy cats looking to piggy back off of the Florin’s success.
By the 14th century more than one hundred and fifty local nation states issued their own Florin. Interestingly, the weight of the Florin was chosen to equal one Lira (a nominal silver pound which was the money of account at the time), because the weight of the Florin never changed and the money of account continued to inflate, by 1500 one Florin was worth seven Florentine lire.
The stability and notoriety of the Florin led, not only to widespread prosperity for the Florentine City State, but in addition spawned a tremendous amount of international trade and development. Florence became the center of European financial industry and Italian trade networks made their way along the entire Mediterranean.
These trade networks were crucial not only just for the exchange of goods, but also for the exchange of knowledge and culture. In fact, during this time period, Italy grew so prosperous that it became fully independent from the Holy Roman Empire and spawned advanced commercial infrastructure which developed financial instruments such as double-entry bookkeeping, joint stock companies, international banking, a system of foreign exchange markets, insurance, and sovereign bonds.
This maturation of markets and stability of a widely circulated sound money set the stage for what we now call the Renaissance. By no surprise, the earliest stages of the Renaissance can be traced back to 13th century Italy and from there spread its way out across the European continent.
Book of the Month:The Price of Tomorrow: Why Deflation is the Key to an Abundant Future
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