Monetary policy of mercantilism, which called for national regulation of transactions in foreign currency and precious metals (bullion) in order to maintain a favourable balance in the home country. Bullionism is most closely associated with 16th- and 17th-century Spain, which was thought to owe its prosperity and military might to the gold and silver of its New World colonies. This view gave rise to the theory that a favourable balance of trade would increase the nation's supply of precious metals. Spain's abundant treasure led it to buy goods and services abroad at the neglect of domestic industry, causing it to experience an economic decline.
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Bullionism is an economic theory that defines wealth by the amount of precious metals owned. Bullionism is an early or primitive form of mercantilism. It was derived, in the 16th century, from the observation that the English state possessed large amounts of gold and silver, in spite of the fact that there was no mining of precious metals on English soil, because of its large trade surplus.
Gerard de Malynes (1586 - 1641), another bullionist, published a book, called A Treatise of the Canker of England's Common Wealth, in which he asserted that the exchange of foreign currency had been a trade of value rather than exchanging the weight of metals. Therefore the unfair exchanging of precious metals by bankers and money changers, would result in the deficit of English balance of trade. In order to ban the flow of exchange rates, he demanded the strict fixing of exchange rates for coins, only by the concentration of precious metals and weights and for strict regulation and monitoring of foreign trade. But de Malynes did not convince his contemporaries “…that the cambists were responsible for gold outflow or to elicit enthusiasm for a monopoly sale of exchange, par pro pari, by the royal exchanger…" But he succeeded in creating the first economic controversy: Edward Misselden opposed him 1623 in his book The Circle of Commerce: Or, the Balance of Trade.