How Spain Bankrupted the World’s Largest Empire

Sep 27, 2025 | Spain once ruled the world. In the 16th century, it built the first true global empire, stretching across Europe, the Americas, Africa, and Asia. Mountains of gold and silver from Mexico and Peru poured into its treasuries — more wealth than any empire had ever controlled. And yet, within a century, Spain was bankrupt.

In this episode of The Financial Historian, we uncover how Spain — the richest empire on earth — destroyed itself with bad economics. From the Price Revolution that triggered Europe’s first wave of inflation, to endless religious wars that drained the crown’s coffers, to pirates and privateers who turned Spain’s treasure fleets into floating banks ripe for plunder, the story is both epic and familiar. Spain confused treasure with real wealth, and its rivals — England and the Dutch — used Spanish silver to build navies, banks, and trade systems that would outlast the empire itself.

The lesson is urgent today. Floods of money — whether from debt, credit, or money-printing — don’t guarantee prosperity. Without systems, discipline, and investment in real productivity, wealth corrodes from within. Spain’s empire collapsed because it mistook treasure for security. Are we making the same mistake now?