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| Germany’s gold reserves may prove a powerful weapon in the troubled world economy. (Thomas Coex/AFP/Getty Images) |
As the markets fixate on Europe, seeking to understand the
complexities involved in Franco-German moves to stabilize the eurozone
and hence the global economy, little attention has been paid to a
crucial component of German power in this whole equation—Germany’s gold
hoard.
It is intriguing to note the historical timing of Germany’s sudden acquisition of its post-unification gold hoard.
The forerunner of today’s European Central Bank, the European Monetary Institute (emi), once carried almost $27 billion in gold reserves. In 1998, the emi was replaced by the European Central Bank (ecb).
No European Monetary Union financial data was published that year,
while Europe’s elites “rebalanced” the financial system. When financial
records resumed publication in 1999, $20 billion in gold had “gone
missing” from EU coffers.
One would have assumed that these EU reserves should have been automatically transferred to the emi’s replacement, the ecb. No official explanation was ever given as to why it was not. It is interesting to note, however, that in that same year, the German central bank reported a $20 billion increase in its national gold reserves.
The result? Germany now owned 3,400 tons of gold—enough to back an entire currency if it wanted to!
As the late Christopher Story, a former adviser to British Prime
Minister Margaret Thatcher, observed: “The Bundesbank suddenly acquired
massive gold reserves, just as the euro was launched in the first quarter of 1999.
The gold amassed, both in terms of its physical size and of its value
(national valuation basis) is more than enough with which unilaterally
to introduce a gold-backed ‘new deutsche mark’—in contrast to the U.S.
dollar, which is not backed by gold” (Economic Intelligence Review, March 2000).
Coincident with this, commentators were intrigued by the continuous
slump in the value of the European Union’s collective currency, the
euro, immediately after its launch in January 1999. This was engineered
to favor the German economy: “The euro has given German manufacturing
the weak currency it needs to counter high labor costs, and has created a
single capital market across 11 countries, in which the German banks
are ideally placed to thrive” (Spectator, June 17, 2000). German banks were very clever at obtaining share cross-holdings in the firms to which they lent.
Put these two facts together—the sudden acquisition of bullion and
the coincident launching of a currency at a rate favorable to the EU’s
most powerful national economy—and an extremely interesting picture
emerges. “The Germans may have been preparing their greatest coup in
history: the sudden, overnight substitution of a ‘new deutsche mark’
backed by gold, for the regrettably ‘failed’ EU collective currency,”
the Economic Intelligence Review continued. “[I]n reality, the
Bundesbank’s acquisition of colossal gold reserves coincident with the
launch of the euro (which policymakers were never supposed to notice),
and the convenience of the biggest competitive devaluation in history,
betray the probable truth—that this represents the realization of the pan-German plan for a European collective currency elaborated by the Nazis,
and was cunningly postulated from the outset. In other words, the
euro’s steep depreciation is ‘not coincidental’” (op.cit.; emphasis
added).
These facts are made all the more interesting by statements recently
made by a senior Bundesbank official. When asked what Germany would do
if a Greek default forced the ecb into
insolvency, he responded that Bundesbank officials had already discussed
how to deal with such a situation. “We have 3,400 tons of gold,” he
said. “We are the only country that has not sold its original allotment
from the [late 1940s]. So we are covered to some extent” (Vanity Fair, September 2011).
Is it possible that German elites could use their massive gold
reserves to establish a gold-backed deutsche mark in the event that the
euro fails? Here is what the late Christopher Story wrote in that March
2000 edition of the Economic Intelligence Review: “If Berlin were
to decide that the progressive collapse of the euro, which is already
well advanced, had ceased to be tolerable, it has already amassed the
necessary reserves of gold to be able to float a ‘new deutsche mark’
unilaterally—leaving the rest of Europe at Germany’s mercy and
prospectively left with no practical choice, under the circumstances,
but to accept the new deutsche mark in lieu of the degraded euro ….”
The implications of all this for the United States, the dollar and
the world, are huge. Whereas the U.S. dollar ceased to be backed by gold
in 1971, the new deutsche mark would be backed by gold. The dollar
could be “dislodged” from its global primacy not by the euro, which will
continue to be degraded either immediately or over time, but by the new
deutsche mark.
Only time will tell how this situation will play out. However, if
the Bundesbank does plan to introduce a gold-backed deutsche mark, it
could well be that the day Greece defaults—which appears only a matter
of time—is the day that Germany replaces America as the world’s most
powerful nation, overnight!
Back in the heady European summer of 1990, when Germanic euphoria
was high over the unification of East and West Germany, British
politician Nicholas Ridley told the Spectator that “European
Monetary Union, then being discussed seriously for the first time, was
‘a German racket designed to take over the whole of Europe. … You might
just as well give it to Adolf Hitler, frankly …. I’m not sure I wouldn’t
rather have the [bomb] shelters and the chance to fight back, than
simply being taken over by … economics’” (June 17, 2000).
Well, Mr. Ridley, it took a decade, but the reality is that this
time Germany has done it, not by bombs, but by sheer economic
panache—and has fooled the whole world!
All that remains now is for German elites to carry out their solution to their deliberately created crisis—their real “final solution”!Via Thetrumpet.com
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