>>592714 When the empire was at its peak they spent too much on the military and never industrialized. Hidalgos and nobles always tended to see trades and science with disregard or suspicion, so they never industrialized like England or Germany. Also the eternal Anglo.
The gold from the New World perhaps caused inflation but I don't recall well
Since the value of gold is dependent on the market value pumping more gold into the economy only devalues it. In true Spanish fashion they did not give a fuck about economics and pumped huge amounts of gold from the new world into their economy so it was totally wrecked.
I heard a pretty interesting theory that although Spain was obtaining a large amount of money, they didn't loan this money out to any would-be merchants to build any new businesses, as usury was illegal during Spanish golden age.
Usury was legal in Britain and the Netherlands though, and this may have contributed to the eventual trade domination of both countries.
>>592714 spain was always pretty shitty at everything they did. e.g.: they had around 40 million people and they were fighting as equals against portugal (which had less than 10 million) for sea supremacy and to make matters worse they got destroyed by portugal pretty much every single time they decided it was a good idea to invade us and the only time they annexed portugal was through diplomacy since the king was death and the royal crown went to the spanish king since he fucked the portuguese queen.
>pic related: it says everything about spanish prowess on the battlefield and at sea - against all odds, having superior numbers and weaponry they are always able to fuck everything up and up losing; pretty much another germany without the subhuman urges for violence, rape and world domination since at this point they know it better - unlike the germans
>>592714 Spain's power came from an unsustainable economic model based on exploiting the New World's wealth.
During and after the Reconquista, the Spaniards made the brilliant decision to expel the Morsicos and Jews. Unfortunately, the Morsicos and Jews mostly made up the middle class, merchants, and bankers. That meant that the demographic base that would encourage the development of cities elsewhere was practically nonexistent. Instead, the feudal system that was waning elsewhere was cemented.
They managed to avoid being marginalized immediately by exploiting their colonies. A huge amount of silver came from the Americas (50,000 tons between.1540 and 1700), allowing the Spanish to fund their empire. Problem was, their domestic economy couldn't keep up. Spain's population actually dropped (5 million peoople in Castile in 1591 compared to 4 million in 1631), the economy stagnated, and, worst of all,Catalonia, Valencia, and Aragon paid practically no taxes. Thus, the tax burden went to Castile (6.2 million ducats per year), supplemented by Church levies (1.6 million a year), the Netherlands (3.6 million), Milan (2 million) and Naples (4 million). While taxes did bring in about three times the amount of money coming from the Americas, they were mostly consumed locally, particularly in the far-off European possessions where it went almost entirely to local garrisons. Spain ended up hugely dependent on loans, resulting in a massive national debt. By 1559 debt totaled 25 million ducats, and by the end of the century it was up to 85 million. The Spanish government was reduced to pawning off aristocratic titles and lands to fund its ventures. This ended up being counterproductive, as the expansion of the nobility ended up increasing the tax-exempt population of Castile to 10% of the total population.
>>595089 In the midst of this looming economic crisis, Spain got hit with a series of major wars. Endemic wars in Italy regularly sapped the Empire's wealth, and the Dutch War of Independence threatened to cost them a huge part of their holdings. The onset of the reformation worsened Spain's strategic situation, which required a clear path across the continent through which its troops could travel from Spain proper to the Netherlands. Spain ended up losing parts of the "Spanish Road," which originally took them through Savoy, Switzerland, and up the Hapsburg-controlled Rhineland. But Protestantism took hold in Switzerland and Savoy fell under France's influence, forcing the Spaniards to take a more circuitous route.
Then in 1588, you had the catastrophe that was the Spanish Armada. Spanish power was irreparably damaged, and the loss of 20,000 men and a huge portion of their fleet further drained the treasury. And if that wasn't enough, the Spaniards were at the forefront of the 30 Years' War. They participated in it heavily, both by subsidizing Liga and Imperial forces and committing men directly, but it was tremendously expensive. They ended up having to relinquish their claims to the Netherlands, and by 1648 the days of the mighty Spanish empire were over.
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