What is the effect of the gold and silver coming from its vast empire made Spain incredibly wealthy?

Answer 1

AnswerIt led to a wild spending spree in Spain, especially by the Spanish government, which fought several unnecessary wars. In the 1580s the Spanish government ceased paying debts for some years ... The money ended up scattered over much of Western Europe. The ordinary Spanish people didn't benefit, Spain's economy was then destroyed from what had happened. AnswerThe Spanish did not invest it in their own production abilities, but into buying what they needed from others. Sound economic policy is import replacement: create industries that make what you need and want rather than import them. The Spanish spent their gold and silver in other countries which increased their competitors and enemies production abilities. They spent the rest on armies and armadas. Moreover, the production and protection of gold during shipment was very expensive. Spain accounted for more than 70% of gold and silver in the world during this time. They ruined the German silver miners since theirs was so cheap in comparison.

"The Venetian ambassador described a Spanish saying that the metal from the Indies was like rain: it fell on Spain like rain on a roof and then flowed away. The Spaniard Cortes wrote at the end of the 16th century: "Although our kingdom could be the richest in the world for the abundance of gold and silver that have come into it and continue to come in from the Indies, it ends up as the poorest because it serves as a bridge across which gold and silver pass to other kingdoms that are our enemies."

There is a source link below.

Answer 2

Spain became too wealthy causing a severe inflation, the economy declined, at times spain was bankrupt