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- What is retaliatory demotion?
- Should an HR professional always recommend demoting an employee as a punishment?
geographical forces impelling them to leadership. The opening of old lands in Asia and new ones in America changed Europe forever, and the Iberian countries understandably felt the changes first. The Portuguese government, for a time, made large profits from its Eastern trade, and individuals prospered; but Oriental luxuries were costly compared with the European goods that Portugal offered, and the balance had to be made up in specie. This eastward drain of gold and silver had gone on long before Portuguese imperial times, but it was now intensified. Much of the bullion reaching the Orient did not circulate but was hoarded or made into ornaments; consequently, there was no inflation in Asia, and prices there did not rise enough to create a demand for Western goods, which would have reversed the flow of bullion from the West. The Portuguese obtained most of the precious metal for this trade from spice sales through Antwerp and from Africa. The drain proved critical, and, by the reign of John III, the government found itself hard pressed economically and forced to abandon overseas posts that were a financial burden. Later, beginning in the 17th century, Portugal drew its own supply of jewels and gold from Brazil. Spain’s case was the reverse; although the first American lands discovered yielded little mineral wealth, the mines of Mexico by the 1520s and those of Potosí (in modern Bolivia) by the 1540s were shipping to Spain large quantities of bullion, much of it crown revenue. This did not furnish Charles V and Philip II their largest income; Spanish taxation still exceeded wealth from the New World, yet American silver and gold proved sufficient to cause a price revolution in Spain, where costs, depending on the region, were multiplied by three and five during the 16th century. The Spanish government wished to keep bullion from leaving the kingdom, but high prices in Spain made it a good market for outside products. Spanish industry declined in the 16th century, in part because of the sales taxes imposed by the crown, which necessitated more buying of foreign merchandise. Great quantities of bullion had to be poured out to finance the expensive Spanish European empire and the costly wars and diplomacy of Charles V and Philip II, both of whom were constantly in debt. Price rises followed in other countries, largely from the influx of Spanish bullion. In England, where some statistics are available, costs by 1650 had risen by 250 percent over those of 1500. The European commercial revolution, which brought increased industry, more trade, and larger banks, had begun before the discoveries, but it received stimulus from them. Bullion from America helped create a money economy, replacing the older and largely barter exchange—a trend accentuated by greater European mineral production in the early 16th century. The trade emporiums of Italy and the Baltic Hanseatic League declined and we
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