The twenty-first century has been marked by what many see as unusual instability in global finance—negative interest rates, geopolitical tensions, and unprecedented market interventions. What if these developments are not an aberration but rather a return to deeper historical patterns?
In this ambitious new history, Paul Schmelzing draws on thousands of archival sources to reconstruct the evolution of the international financial system from the Renaissance to today. He shows how long-run trends in interest rates and asset markets helped shape our modern system—and how those trends may now be reversing.
That system took form during the upheavals of the sixteenth century, when governments—starting with the Habsburg Empire—emerged as the world’s most trusted borrowers and their debt became the foundation of modern markets. Over time, this arrangement culminated in America anchoring the international financial order.
Now, that long-standing order is eroding. As debt rises, financial pressures mount, and China’s economic trajectory converges with the West's, the world could be entering a new era of instability—one that, in key respects, echoes the financial system that existed before 1550.
