HindeSight Investment #101 June 2023 - Newsletter - Read Here
HINDESIGHT DIVIDEND UK - PORTFOLIO #1 JUNE 2023
In the late 17th century, the early trade routes of the European nations had taken form with the United East India Company or VOC, (Dutch-Verenigde Oostindische Compagnie) operating out of the Netherlands, (United Provinces) leading the way with far eclipsing tonnage in comparison to the well-known (British) East India Company. The spice, cotton and silk trade from the East was incredibly profitable as the world trade globalised.
The long and hazardous sea passages, around Cape Horn and the Cape of Good Hope, at the southern points of the American and African continents were obvious hurdles to reliable and profitable supply lines. The obvious lynch points were the Panama Isthmus in Central America and the Suez canal in Egypt, but it would be 150 years before the Suez canal and the Panama railway were built, and another 60 odd years until 1914 when the Panama canal was completed, shortening these routes considerably. In the 1690’s, Scotland was still an independent nation, looking to participate in the mercantile expansion and colonisation of the times but the last few decades of the century saw extreme low temperatures and famine, that was also widespread in Northern Europe.
The Darien expedition/scheme, backed by investors, with almost 30% of money in circulation in Scotland at the time, some £400,000, planned to establish a colony for Scotland, New Caledonia, in the Darien Gap on the Isthmus of Panama. From there, they could establish and manage an overland route to connect the Pacific and Atlantic oceans with the opportunity that would bring. Although just 50 miles wide, this most inhospitable terrain saw the gallant venture completely fail, with most sailors and settlers dying of malaria and dysentery in the first year. The second expedition to support the venture came to the same fate. The indebtedness of Scotland, especially in the Lowlands, weakened any resolve to maintain independence and the 1707 Act of Union between England and Scotland was the eventually result, with the debt assumed by Great Britain as the Scottish shilling and the English penny were pegged.
Sovereign independence isn’t all it’s cracked up to be, it typically comes at an economic cost and defence fragility, as history has shown us. The recent past surge in support for Scottish independence and nationalism had visions of Robert the Bruce, but all it got was Nicola Sturgeon and the missing £600,000 and a camper van, to see it wane again but probably for the best. An O-level economics student would be able to work out that financially it would have been a disaster.
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