Dr. Joseph P. Farrell
December 27, 2016
A couple of years ago one of the stories we were watching here was Germany’s attempts to repatriate its gold from the New York Federal Reserve, the Bank of England, and the Bank of France, and bring it physically back to the Bundesbank’s vaults in Germany. That move, you’ll recall, began as a popular movement, rather than within the German government itself. It began first as a request for a full audit of Germany’s reserves, reputed to be the second largest in the world after the United States.
At that time, I also pointed out that it was not the first time “something fishy” seemed to be going on with Germany’s gold bullion, for I also noted that in his memoirs, former Reichsbank President Hjalmar Schacht, recounted an episode which occurred during his visit to the USA in 1928. Back then, Schacht visited his old friend and the then Governor of the New York Fed, Benjamin Strong, and asked to see the Reichsbank’s gold reserves as his host led him on a tour of the New York Fed’s vaults. Moments later, the staff came back to the two central bankers to report that they could not find the Reichsbank’s gold reserves. Schacht then records a response that seems incongruous, to this day:
Another amusing incident arose from the fact that the Reichsbank maintained a not inconsiderable gold deposit in the Federal Reserve Bank in New York. Strong was proud to be able to show us the vaults which were situated in the deepest cellar of the building an remarked:
“Now, Herr Schacht, you shall see where the Reichsbank gold is kept.”
“While the staff looked for the hiding place of the Reichsbank gold we went through the vaults. We waited several minutes; at length we were told: “Mr. Strong, we can’t find the Reichsbank gold.”
Strong was flabbergasted but I comforted him. “Never mind: I believe you when you say the gold is there. Even if it weren’t you are good for its replacement.” (See Confessions of the Old Wizard: TheAutobiography of Hjalmar Horace Greeley Schacht, Houghton Mifflin: 1956, p. 245.)
And that was that, as far as Schacht was concerned. Not another word is said about it throughout the remainder of his memoirs; the event remained nothing more than an “amusing incident” in a book replete with all manner of insider financial revelations, and Schacht was nothing if not the consummate “insider”. Among the many other “revelations” recorded are the fact that Sir Charles Addis “who had spent many years as head of the Hong Kong and Shanghai Banking Corporation” had become, by 1929, “a member of the Board of the Reichsbank.” (p. 233)
If you’re like me, you probably find Schacht’s little story of “the amusing incident”, more than a little suspicious, particularly when viewed through the lens of current German gold repatriation efforts. But wait, there’s more.
In his autobiography, Schacht also recounts at some length one of his most ingenious schemes, the Golddiskontbank which was established in March 1924 and continued in operation right through the end of the Second World War. The essence of the scheme was that Schacht established a bank that was allowed to issue banknotes – which it never did – in pounds sterling. I’ve always wondered if in fact there was some relation between this little Schacht scheme and the Nazi counterfeiting operation known as Operation Bernhard, which counterfeited over a hundred million pounds sterling worth of currency during the war, some of which was virtually undetectable from the real thing.
Now why am I bothering with all this? Because if one looks at Schacht’s revelations carefully, what we have are three key elements of what I’ve been arguing is a post-war system of hidden finance: (1) lots of (missing) gold (the 1928 NY Federal Reserve gold “amusing incident”, (2) fraudulent securities or currency (Operation Bernhard, which would not have had to have been restricted simply to counterfeiting currencies), and (3) the participation of major prime banks of the West (Schacht’s allusion to the nexus between the Reichsbank and HSBC via Sir Charles Addis).
With this historical review in mind, we can look at this story shared by Mr. J.K. and Ms. B.:
As the Zero Hedge article points out, the real reason for the repatriation was precisely over questions of just how much gold did Germany really have, that “grass roots” movement I noted at the beginning of the article:
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