Modern economics is generally credited to Adam Smith and his Wealth of Nations, written in 1776. His economic theories still influence us today. Yet, Smith was influenced by the economic theories of sixteenth century Spain. In particular the school of economics known as the School of Salamanca. Further this work shows how the great influx of gold and silver coming into Spain from the New World affected not only Spain but all of Europe. The Spanish government struggled to control inflation and the struggling Spanish economy. All the while Spain tried to control not only the New World but also half of Europe, oppose the Reformation, and hold back the threat of the advancing Islamic Ottoman Empire. Considering the economic stagnation of our times, the problems in the Middle East, and our strained relationship with various European countries, this work offers insight into understanding these concerns.