Semper Augustus: End of the Golden Age
The Dutch Republic flourished from trade. It bought and sold. Did it get ‘ripped off’ by its trading partners? The question seems absurd.
Tuesday, June 03rd, 2025
Bill Bonner, in Youghal, Ireland
On our way back from Argentina, we stopped over in Amsterdam. It was our first visit to the city. It is late spring in Europe. Cold and rainy when we arrived, the weather turned beautiful on the weekend.
Every dog has its day. And the Dutch Republic — precursor to today’s Netherlands — had its day in the mid-17th century. It broke away from the Spanish Empire in 1579 and became the richest place in the world with a far-flung empire of its own.
Today, the country is still prosperous…and attractive. Everything is clean and well-maintained — the highways, buildings, factories. Even the farms are exceptionally orderly. It’s a small country, so space there is little wasted ground, with cultivated fields close up against housing developments, cities, and factories.
One of the first things you notice is the lack of noise. Most of the cars are parked along the leafy streets. And those few in motion are quiet. They are almost all electric. People get around on bicycles…millions of them. The loudest sound you hear is the tching tching of bicycle bells warning you to get off the bike path or you will be run down. Many of the two-wheelers are electric, too. And the flat, small country — with its abundance of bicycle lanes — is ideal for them.
Another thing you notice is an absence of fat. The Dutch are big, but rarely do you see American-style heft. Perhaps that, too, is a consequence of the bicycle culture.
There are also various species of tiny electric vehicles that we had not seen elsewhere. They are so short they park perpendicular to the sidewalk…and so small and quiet, they must be well suited to in-town driving.
Even the quietest residential areas are punctuated by restaurants, bars and shops. The overall effect is one of calm elegance along with urban convenience. It seems like a nice place to live, where you can leave your house and find a good restaurant or coffee shop within walking distance.
We did not go into the Rijksmuseum. We’ve never seen a line we wanted to join…and the queue to buy tickets for the museum was one of them. Apparently, we didn’t miss much.
“The Rijksmuseum was terrible,” came the eyewitness report, tipping us off. “It is very crowded… and noisy. There are great pieces of art from the Golden Age — Vermeer, Rembrandt, et al — but the most popular works have hordes of tourists gawking at them… with tour guides loudly giving out information and opinions. Probably better to go in the winter.”
Instead, we took a taxi to the Hague to visit the quieter Mauritshuis museum, focused completely on the Dutch Masters.
“People in the Hague are nicer than those in Amsterdam,” said our Hague-based driver.
But there, too, we were almost turned away…
“You didn’t reserve? I’m sorry but the museum is full,” said the tall, thin blond. Then, calling someone on a walkie-talkie…
“Wait…it’s okay…you can go in…”
It is a large private mansion that has been repurposed as a museum. What surprised us about it was how many Dutch masters there were… and how very good they were. Of course, many of the paintings are well known throughout the world. But the visitor is still impressed; the level of expertise — capturing light and shadow…facial expressions… and telling stories — is extraordinary.
What does it take to have a ‘Golden Age?’ Ancient Lydia had its day in the sun, making its king ‘as rich as Croesus.’ Greece had its golden age, too, which came to an end when Athens banned trade with Sparta and set off the Peloponnesian War. Hollywood had a golden age — between the 1920s and the 1960s. Golden ages, like empires and head colds, come and go.
With only 1.5 million people…and a tiny surface area…the Dutch Republic flourished from trade. It bought and sold. Did it get ‘ripped off’ by its trading partners? The question seems absurd. If they felt they were being ripped off…Dutch merchants wouldn’t do the trade!
It was not only free trade that brought the Dutch wealth. Freedom of religion and freedom of movement also contributed. Jews from Spain and Portugal. Protestants from France. Thinkers and tinkers from all over Europe found freedom in the Dutch Republic. Descartes, Bayle, Locke, Spinoza — all took refuge in Holland. And the new immigrants brought fresh ideas…and capital.
New products came in too. In the 17th century, Europeans were expanding their trade routes into Africa, Asia and the Americas. They brought back tobacco, tomatoes, potatoes and many other products never before available in Europe. With the new imports…and the new immigrants…Amsterdam became what New Amsterdam (aka New York) was to become years later — a dynamic melting pot.
But none of the arrivals had the effect of a plant that came from the Ottoman Empire — the tulip. It caught the eye not only of gardeners, but of investors. One of the innovations made by the Dutch was futures markets. They could bet on the future…using markets not only to set current prices, but also the prices that people expected tomorrow.
Typically, the tulips flowered in the springtime…and then the bulb was dug up and stored. For the autumn and the winter, the bulb stayed where it was. It was the ‘underlying’ asset. But the trades were made on paper. Prices soared on the most desirable bulbs — such as the Semper Augustus.
The buyers often borrowed, using their other bulb holdings — on paper — as collateral. And so it went for the proto-crypto traders; they began to see they could get rich just by trading things they would never see. Prices went up further and further… each one a measure of hope.
Until…until…the future came.
In February 1637 an auction was held. This time, there were no buyers. Word quickly got around that there may be no one willing to buy the bulbs. Prices collapsed. Promises went unfulfilled. Loans went unpaid. Contracts were torn up. The bulbs — real things — were still there. But the ‘paper’ wealth disappeared.
The Dutch ‘Golden Age,’ however, continued for another 65 years… until the death of Prince William III in 1702.
Or, so they say.
Regards,
Bill Bonner
Market Note, by Tom Dyson
This chart shows containership departures from China to the US. If we disregard recent disruption to the data caused by Trump’s tariff indecision, the number of container ship sailings has been falling since last September…and looks to be heading to new lows. August and September is the traditional peak season for the container shipping trade between China and the US as retailers stock up for back-to-school sales, Halloween, Thanksgiving and Christmas. Will containership departures recover soon? Or will we get another supply shock later this year? We’ll see. We’ll be monitoring this data, as well as the number of containers moving through the Port of LA each week, in our paid newsletter.
Number I
Strange piece. Today´s Netherland is still a nice place - in some areas. In many it´s heavily burdened with an enormous migrant crowd who were let into the country throughout decades when the State was soooo "liberal". The rightleaning new Government kicking out WEF - Asset Ruette is trying to clean up the mess. They´ll hardly suceed.
The extremely successful farmers (they are the second largest food exporter of the world) are under extreme pressure to leave their land "because of CO2 emissions" and to cull their cattle in order to lower the carbon footprint.
Plans are on the table for a mega city connecting five clusters (Brussels/Amsterdam/Cologne/
Paris/Luxemburg) which of course need space. Rob the farmers.
All wet dreams of the Davos Clique. You can find that on their website. It´s all in the open btw.
Tiny electric cars, bicycle lanes galore, pristine manicured farms abutting residential neighborhoods and factories, sounds like a "master planned" wet dream for Bill. He conveniently ignores that what he describes and fawns over is much easier in a tiny country that today has very tight controls on immigration (which was his thinly veiled thesis for what makes today's Netherlands so great).
Milton Freedman famously said, "you can't have open borders and a welfare state". Biden and Bill missed that memo.