Final answer:
The wealth from New World colonies, primarily in the form of gold and silver, led to Spain's centralization by strengthening the economy and allowing for stricter royal control over colonial trade and resources. The establishment of the quinto and the limitation of trade to designated ports are examples of how Spain secured and centralized colonial wealth. This centralization was furthered by the formation of the Council of the Indies, which administered colonial affairs for Spain.
Step-by-step explanation:
The flow of wealth from the New World colonies was pivotal in enabling Spain to centralize its control over its vast empire. This centralization was largely due to the infusion of vast amounts of gold and silver, which bolstered the Spanish economy and allowed for increased royal power. The Spanish government strictly regulated economic activities to ensure that the colonies remained profitable, implementing systems that ensured Spain benefited most from colonial trade and resources.
The discovery of silver and gold in the Americas led to the institution of the quinto, mandating that one-fifth of all precious metals mined were to be surrendered to the Spanish Crown. This, along with the limitation of trade to just a few designated ports, and forbidding trade between the colonies themselves, helped to consolidate wealth and power back to Spain. These restrictions were an example of Spain's mercantilist policies, which sought to make the empire as profitable as possible.
Additionally, the wealth from the colonies reinforced Spain's social hierarchy and the mercantilist economy, backing the nation's power and leading to its 'golden age' under Ferdinand and Isabella. The creation of the Council of the Indies in 1524 further exemplified the practical steps taken towards centralization, overseeing colonial affairs directly from Spain. The resulting wealth and centralized control contributed to the establishment of Spain as a predominant global power during this time.