Nations Built on Lies
Volume 1 – How the US Became Rich
© Larry Romanoff, October, 2021
Part 5 – Asset Theft and Financial Crimes
Part 5 – Asset Theft and Financial Crimes
Contents Part 5
The Spoils of War
Japan’s Golden Lily
The Great Gold Robbery – Part I – The US FED
The Great Gold Robbery – Part II – Citibank
US Gold Purchase Act of 1933
US Silver Purchase Act of 1934
God Save the Queen
My Currency, But Your Problem
The World Bank and the IMF
The Spoils of War
I began one section on colonisation by describing Iraq as a cradle of civilisation. One result of that long history is the existence of archaeological artifacts, art treasures, scrolls and other items accumulated over the course of centuries, many of great financial value but also of immense historical significance. Most have disappeared. American troops looted most of the country, with many Iraqi museums today being completely empty. Valuables and historical artifacts were stolen not only from museums and libraries, but also from private homes. Iraq was looted in totality. Published estimates claimed that during combat actions at least 200,000 items of art and culture, many of which were of inestimable value to the history of the world, were stolen from Iraqi museums in Baghdad, Mosul, and other cities. The US government claims these were only a few rogue actions of which it disapproved, but the facts tell us otherwise, and indeed many of these items have appeared in museums and private collections – in Israel, among other places.
In Germany after the Second World War, the US violated solemn agreements it had made only months earlier when its troops entered the Soviet Occupation Zone and stole more than 100 tons of gold and silver bullion from the Reichsbank, in addition to priceless collections of Soviet art and documents. Some art was eventually returned under Soviet protest, but the gold and silver had somehow disappeared. The Soviet Union insists that the US still holds priceless collections of stolen Soviet art, a claim the US dismissed, but then was caught in a lie when researchers uncovered documents proving the US had indeed kept a huge amount of art treasures – which had by then disappeared into private collections by the usual group of suspects. There were also documented reports that at the end of the Second World War, the US military emptied a train of 24 cars filled with gold, silver and various expensive art objects estimated to be worth many billions at the time. As well, an additional several billions in gold disappeared from the Reichsbank at about the same time, and has never been accounted for.
The details of European treasure thefts are murky and very complicated, with claims and counterclaims, being easy and tempting to dismiss treasure-hunting stories about Germany as exaggerated tales of war. Today, (and for the last 70 years) we have been inundated with tales of the Germans looting precious metals and invaluable works of art throughout Europe, most particularly from the Jews, but there is a whole lot more to the story than this. For one thing, after the Jews completed their Bolshevik Revolution in Russia in 1917, they looted the entire country, beginning with all the gold in the central bank which was shipped to the US as payment to Jacob Schiff for financing the revolution. But Russia was looted of much more than gold, the relatively well-off middle class owning billions in precious metals, artifacts and invaluable works of art. Most of this was removed from the country, much of it to Germany and Austria, when the Bolsheviks were evicted. It is therefore likely that much of the art the Germans supposedly looted from the Jews had itself been looted from Russia, the lack of publicity and subsequent claims due primarily to the fact that the Bolsheviks massacred the entire middle class of Russia in their gulags, meaning the original owners were all dead and there was nobody left to complain. Still, the tales of looted European treasure persist to this day, with occasional new finds, new treasure maps and yet more new stories. Nevertheless, documentation does exist to evidence claims that the US and the FED did indeed loot Germany severely at the end of the war. Given the facts of Operation Paperclip, this shouldn’t be a surprise to anyone.
Japan’s Golden Lily
However, there is another matter of looting, this one involving Japan, that is a bit more sinister and in a league of its own in terms of victors claiming spoils of war. To begin, we need to consider a few apparently unrelated facts.
The first is that, in terms of public knowledge of atrocities and war crimes during World War II, almost everyone is aware of the crimes, real and imagined, including the looting of gold and valuables, committed by Germany, but almost no one, most especially including the Japanese people themselves, is aware of the vast catalogue of almost unbelievable atrocities committed by the Japanese.
The second is that while Russia did hold some war crimes trials against the Japanese, which the US derided as “Communist propaganda”, there were no war crimes trials against the Japanese by the US. There was a show trial where two or three people were executed, but that was for knowing too much, not for war crimes. Japan’s history of war atrocities was far greater than that of Germany, but we had only silence.
The third is that Japan did indeed have a nasty habit of looting not only the central banks but every possible source of treasure during their sweep through China and across Asia. Gold, silver, jewels, works of art, anything and everything of value was looted and shipped to Japan during the early stages of the invasion. This knowledge has been suppressed, never having entered the mass public mind, except for brief comments made in passing.
The fourth relates to the terms of Japan’s surrender to the US at the end of World War II. It is not widely known that when the Americans drafted the documents of Japan’s surrender, they specifically prohibited war reparations claims against Japan. Article 14(b) of the treaty stated:
“The Allied Powers waive all reparations claims of the Allied Powers, other claims of the Allied Powers and their nationals (my italics) arising out of any actions taken by Japan and its nationals in the course of the prosecution of the war, and claims of the Allied Powers for direct military costs of occupation”.
Then-US Secretary of State Allen Dulles bullied and coerced the other allies and all Asian countries to sign this surrender agreement. Only China and Russia refused to be bullied into signing.
How are these related? Well, essentially through the theory and process of Operation Paperclip – with a twist. First, the Americans desperately coveted for their own CIA programs the experience of the Japanese war criminals who performed the multitude of human and biological warfare experiments, and so secretly imported thousands of these people to the US where they would be immune from prosecution, eliminating the need for public war crimes trials. A main part of the reason Japan has never faced internally among its own people the extensive and horrid facts of its atrocities in China and Asia, is because it was never forced to face these externally, to the world. Killing two birds with one stone, the absence of Japanese war crimes trials conveniently avoided public exposure of the vast litany of genocidal war crimes committed by the Americans in Japan. More later.
The next connection, and in some ways the most important, is the waiver of reparations mentioned above. Since there were to be no international war crimes trials and no international claims for war reparations, not only Japan’s military atrocities, but all its looting, would never be publicised either internationally or domestically, and therefore never need to be brought to the attention of the Japanese civilian population. And from that silence, Japan’s war conduct was simply written out of Japanese history and, to a very large extent, the entire world’s history, thanks to American greed and ambition.
But why the prevention of reparations? The US and the Allies used war reparations as their excuse to strip Germany to the bones, leaving only the skeleton of the country. Japan was far worse than Germany in every way, so why the astonishing generosity toward Japan? And here we arrive at the sinister part. As mentioned above, the Japanese did indeed heavily loot all of Asia and did indeed ship some of that loot home to Japan. But as the war progressed and the spoils of war were being looted increasingly farther from home, the Japanese began assembling and storing their loot in preparation for larger shipments later. Unfortunately, as the war progressed, Japan began losing control of the shipping lanes and transfer to Japan was no longer a safe option. Operating under an incorrect assumption that the US would permit them to keep the Philippines in exchange for a cease-fire, the Japanese therefore elected to bury most of that looted gold and other assets in the Philippines. There exists today ample documentation that Japanese officers created dozens of deep storage depots in caves or excavated underground areas, filled them with the looted treasure and destroyed the entrances with explosives. It also appears to be true that all the individuals who worked on the transport, excavation and storage of all this loot were buried inside the caverns, apparently leaving only three or perhaps four people with knowledge of either the fact of storage or the locations. This was Japan’s Golden Lily project. (1) (2) (3) (4) (5) (6) (7) (8) (9)
There has emerged substantial and irrefutable evidence that the Americans had learned of Golden Lily and had captured and tortured one of those individuals, who revealed the existence and locations of at least some of the sites. The Americans would of course be bound by duty, ethics and law, to reveal this information and repatriate those tens of billions of dollars of gold and other assets looted from the treasuries of China and the other countries in Asia. But the Americans had a better idea. With the looted treasure gone and presumably lost without trace or treasure map, they decided to keep it for themselves. Since Japan could hardly make a claim to this loot after the war, and since the hidden billions were now essentially orphans, they were available for the Americans to quietly spirit away. The problem was that this was a huge crime, even in American minds, since it was clearly a theft from friends rather than enemies, friends who would want their property returned. The Americans found the perfect solution – the provision for forfeiture of reparations in the treaty of Japan’s surrender would in fact mean these nations – and their nationals – renounced their claims to all treasure looted by Japan, thus serving to make the Americans’ actions “legal”, provided only that all parties signed the treaty. And all parties, save China and Russia were indeed bullied into signing.
Chalmers Johnson wrote an excellent Review of Seagrave’s ‘Gold Warriors’ (10) (11), in which he stated, “Almost as soon as the war was over, American forces began to discover stupendous caches of Japanese war treasure. General MacArthur, in charge of the occupation, reported finding “great hoards of gold, silver, precious stones, foreign postage stamps, engraving plates and . . . currency not legal in Japan”. There was also a US Army document containing a statement referring to “undeclared caches of these treasures [which are] known to exist”. The American occupation forces had apparently discovered at least some of Japan’s Golden Lily sites, containing billions in gold and other valuables. This much is without question, and there is documentation that MacArthur actually toured some of these opened sites and evaluated the contents. The accepted theory is that with the agreement of then-US President Truman, they would confiscate these discovered riches, maintain absolute secrecy, and use the money personally and to finance the future clandestine activities of the CIA.
There appears to be substantial evidence that Ferdinand Marcos found and recovered about $15 billion himself, partly from a sunken Japanese military cruiser and partly from a discovered tunnel. I believe it was around 2000 or 2001 when a Philippino government official claimed that one of Marcos’ daughters held a bank account in Switzerland containing more than $10 billion, which information was apparently leaked when she attempted to change banks. And in fact, in 1998 the Supreme Court of Hawaii rendered a judgment against Marcos’ estate for almost $1.5 billion as compensation to a Filipino who retrieved a solid gold Buddha from a Japanese tunnel, then had it stolen from him by Marcos. I believe the portions of this story relating to Marcos have been irrefutably documented and are beyond dispute, which would serve to certify much of the remainder of this adventure, including the portion concerning the Americans.
In 1999, Edward Michaud produced an excellent historical essay titled, “Corregidor The Treasure Island of WWII”, in which he detailed the looting of the Philippines. It wasn’t called looting at the time, but that’s what it was. When the Japanese invaded the Philippines, MacArthur was forced to evacuate and take refuge in the island of Corregidor, prior to which he did two things. He ordered all munitions and war materials destroyed so as not to leave them for the Japanese, and he collected and shipped off the entire wealth of the Philippines’ central bank and all personal wealth that could be collected in a brief time from local citizens, to be sent to the US for safe-keeping and prevent the inevitable looting by the Japanese. (12) (13) (14) (15) (16) (17)
According to Michaud’s report, which I believe is accurate, “The Government securities alone consisted of over 51 tons of gold bullion, 32 tons of silver bullion, 140 tons of silver pesos & centavos, and millions of paper Treasury Notes, bonds and corporate stocks. The civilian property … consisted of approximately two tons of gold bullion in various sized ingots, along with an unknown amount of precious stones and foreign currency. When orders were received to evacuate the city the many paper inventories and records were still incomplete, with many private citizens not even being given receipts for their valuables. Much of it was stored in sections of the large underground complex known as Malinta Tunnel. The remaining 51 tons of government gold bullion, consisting of 2,542 ingots of 42lbs each, (20 kilos), along with the balance of the paper currency & securities, were stowed in several of the interior laterals of the Navy Tunnel on the South side of the Malinta tunnel complex.”
Virtually all of this was loaded onto whatever vessels, large or small, were available, and the entire lot transferred to Corregidor, where it was eventually loaded onto US submarines and removed to the US. Anything not able to be shipped out in time was loaded onto surplus vessels which were towed out into deeper water and sunk, this amounting to hundreds of tons of precious metals, much of which was later recovered by the Japanese. The submarines were loaded during the night when the Japanese aircraft could not attack, submerging during the daylight hours for safety. Michaud believes this Philippine treasure was transported to the US Mint, though I imagine it ended up at the FED rather than the mint. He ended his essay by stating, “At the end of the war this securities shipment, “or at least its monetary equivalent”, was subsequently transferred back to the Philippine Government”, but I have seen no evidence to support this claim. Moreover, nobody today is in a position to make such a claim since no accurate inventory was done in the panic to evacuate before the Japanese arrived, and nobody actually knows what was taken. In any case, from the few facts available, the preponderance of evidence is that little of this wealth was ever recovered by the Philippines. This was by no means the only, or the last, such event during the Second World War.
The Great Gold Robbery – Part I – The US FED
Once upon a time, quite a long time ago, Japan did something that was not very nice. Yes, again. This time, Japan printed a new series of Federal Government bonds, a special series – their famous “57s” – the specialty denoted by a new design, new colors, and a new series of serial numbers. If I recall correctly, this series of bonds did not pay annual interest but would pay the full accrued interest and original principle when redeemed on maturity. Through various agents, the bonds were all sold but, when the series matured, Japan declared them fake and refused to pay. Their rationale was that these securities were “different” from any bonds ever issued by Japan; the design was wrong, the colors were wrong, the serial numbers were unlike any ever used by Japan. To make matters worse, these bonds even had “spelling errors” in them, and the Japanese would of course never make such errors on their own bonds issued in Japanese. They had to be fake. Rumor had it that a few small, close friends of Japan did indeed manage to redeem their bonds, but all other investors had to accept they’d been swindled. This event did not escape the notice of the US FED, leading us to our story.
Prior to World War II, the US FED and the CIA travelled the undeveloped world for years, telling each nation, including China, that when the Japanese (or the Germans, or the Italians, or God knows who) invaded, they would loot each country’s Central Bank and gold reserves. Each country therefore should turn over all its gold to the FED for safekeeping, to be returned after the war. In exchange, they would be given gold certificates issued by the FED, that could later be redeemed. This advertising pitch was presented not only to the central banks of each nation, but to all the major local banks as well, offering to (temporarily) relieve them of their entire holdings of gold and silver, to make the world safe for democracy. Many nations – and many commercial banks, genuinely fearful of another world war, bought this bill of goods, permitting the FED to suck countless billions of gold out of the world, from both developed and undeveloped countries. The metal was loaded onto US military vessels and shipped to the US. But after the war, the FED refused to redeem any of the certificates, claiming they were all fake. Naturally there were outcries but, so far as I am aware, the US media refused to report on these developments.
Rumors circulated for years but the US Treasury and the FED heatedly denied these stories when they surfaced, dismissing them as “urban legends” and “conspiracy theories”, ridiculing both the idea of “safekeeping” transactions and the very existence of these certificates. But then around 1980, a crashed US military plane was found in the Philippine jungle, laden with heavy wooden trunks full of metal containers, all with FED markings, and all containing hundreds of billions of dollars of these same certificates. That was when the entire story finally became public, though the Western media have almost totally censored the story. After that, these certificates began surfacing all over the world, with various parties attempting to exercise claims. The FED has steadfastly refused to deal with this in an open and forthright manner. Since the discovery, parties in possession of these (now old) bearer gold certificates have been met only with vengeance, usually being immediately arrested and charged by the FBI with fraud. Even those individuals not attempting to redeem but simply asking for a verification of authenticity, are also arrested and accused of attempted fraud. The collusion between the FED, the US Treasury and the FBI became sinister and dangerous, the FED pulling out all the stops to intimidate all but the most courageous into silence. A journalist at the Financial Times claimed:
“It has now reached a point where you can go into one of the big banks in New York, London or Zurich, give them half a metric ton of gold in return for a certificate of ownership, walk around the block for 10 minutes, re-enter the same bank, and they’ll deny ever seeing you before, and have you arrested for presenting them with a counterfeit certificate.”
There was one group, the Laurel family, that appeared to have an especially good case in dealing with the FED on their several hundred million of these certificates which they presented to the FED for redemption. In this one case, neither the FED nor the US Treasury were so bold as to denounce the certificate as counterfeit, nor to have the Laurels arrested for fraud. Instead, the FED apparently stated they “could not verify” the authenticity of the certificates. From Seagrave: “After carefully reviewing the documents that you and your client have submitted, we are unable to verify that the Federal Reserve bond and related documents … are authentic. In addition, as I indicated to Mr. Portman by telephone, Chairman Greenspan is not available to meet or speak with you or your client concerning this matter.” A further communication from the Chicago FED stated, “There was no record of the issuance … of these bonds …”, and the US Treasury claimed, “… The Treasury Department has no record that it issued any of the documents in question, and … has never issued any Federal Reserve bearer bonds of any kind.” The oddity of course is the lack of instant FBI arrests on fraud charges, substituted for rather lame expressions of “Gee, we can’t seem to locate the records.”
When Chiang Kai-Shek lost the battle for China and prepared to flee to Taiwan, he and his supporters quickly organised a scheme whereby they emptied the entire gold and silver stocks of China’s central banks and commercial banks, after which the Americans flew it out of the country in B-29 bombers owned by the CIA’s private airline, Civil Air Transport. I believe it was Aldrich who noted that these same gold certificates, the Federal Reserve Notes, appear to have been also used “for persuading managers of major banks in the interior of China to part with their vast stocks of gold”. He also noted that the CIA and the FED apparently offered gold certificates of a greater value than the gold actually being exchanged, as an extra incentive to the banks to cooperate, since the US “almost certainly had no intention of honoring them anyway”. Sufficient evidence exists that the CIA and the FED sold Chiang Kai-Shek the same story. Since the CIA was already in possession of all of China’s gold, having flown it out of the country in their own aircraft, they convinced Chiang to permit its transfer to the US for “safekeeping”. Chiang died in 1975 without ever seeing his gold again, and the evidence is that until the day she died in 2003, Soong Mei-Ling (Mme. Chiang) spent all her time trying unsuccessfully to recover her (i.e., China’s) gold from the FED. It would seem that gold is still “safe”.
Aldrich was reasonably of the opinion that these certificates might indeed be intricate forgeries, but that if they were, it was most likely the CIA who manufactured them. That’s a very likely possibility, since it has never been much of a secret that economic warfare has been a US specialty for a very long time, this warfare absolutely including the counterfeiting of currencies and securities, to say nothing of passports and many other kinds of documents. And in fact, there is much evidence that the CIA was attempting to destroy China’s economy with counterfeit currency during these periods, using what was apparently a very sophisticated printing enterprise in Manila. According to the British Government, “Foreign Office files also show that the CIA was involved in other currency issues, including the movement of printing plates for Chinese currency.” But the British were in no position to point fingers, since their own Special Operations Group printed and dispersed truly massive quantities of counterfeit currencies and various financial securities during World War II.
Be that as it may, looking at the photos of the certificates, one’s first impression is that these must be genuine. Counterfeiting a certificate is not difficult, and if we had only pieces of paper the problem would seem to be simple. But we have much more than simple pieces of paper. The trunk containers, made of wood and leather, the metal fastenings, the many smaller boxes containing each issue, made of metal, cast, stamped and engraved, cast with seals of the FED or the US Treasury, enameled in different colors, and much more. Each box also contained microfilm summaries of the contents and serial numbers, with engraving plates, the containers of which were stamped with “JP Morgan Chase Bank”, “Federal Reserve Bank Transfer Notes”, and “U.S. Federal Reserve Bank Guarantee Certificates”. To duplicate all of this would require a great deal of knowledge and experience and be an enormous undertaking, far beyond simple counterfeiting or the printing of fake certificates. And there exists such a large volume, apparently issued by various FED districts, from Dallas, Boston, Philadelphia … To further age all of this so as to appear to be many decades old and suffering from exposure to nature, might be within the abilities of a very few today, but to what purpose? Surely nobody today would attempt such a brazen fraud since the odds of success would be precisely zero.
And we do have the records of the shipments of gold to the US FED, because these were reported daily in the New York Times, and indeed the historical record provides ample evidence that the FED’s gold holdings rose enormously and very quickly, more than tripling in the space of perhaps one or two years. They also show a later decrease, but there is no evidence of the direction of disposition. A few examples follow.
Newspaper clippings documenting the worldwide transfer of gold bullion to the US FED for “safekeeping”. Almost none of this gold was ever seen again by the original trusting owners. The FED declared all the certificates counterfeit and kept the gold.
Searching the New York Times archives with the keywords “China gold” produced quite a lot of data, with one writer claiming seven US naval destroyers laden with 125,000 metric tons of Chinese gold sailed to the US in 1938, apparently to protect it from the Japanese who were invading at the time. It would seem this was Chiang’s gold stolen from the Mainland. These would all have to be clandestine sailings since the Japanese would certainly have retaliated had they known.
One NYT article dated December 1, 1934, was headlined, “Imports of Gold Most Since March”, informing readers that “Conditions Abroad” cause a demand for dollars and for gold transfers to the US – presumably for safety. The article states that about $113 million of gold had been transferred to the US in November alone, bringing the total of foreign gold shipped to the US to more than $8 billion. This article lists China at only $600,000 in gold, but China was almost never listed in any such reports since the removal of gold from China was all done illegally and would have been stolen. The countries listed in this article included France ($66 million), Canada, Belgium, Colombia, Great Britain, Guatemala, Holland and India. It also listed many hundreds of millions in gold transfers in the same month for five previous years.
Another article dated September 21, 1934 stated “Guatemala Sends Gold”, and listed $230,000 from China. A similar article dated June 8, 1934 noted the US FED received many more tens of millions from France, Jamaica, Canada, England, Columbia and India, with another few hundred thousands of legal gold from China. And more millions from Canada on April 14, 1934. Yet another announcement dated February 19, 1937, listed many tens of millions in gold, more than $13 million of which arrived at the US FED on one day. This list included Australia, Canada, Switzerland and India. Other articles from June 6, 1926 listed shipments from Cuba, Chile and Singapore, and included some from China that altogether totaled almost $100 million.
The reason China isn’t listed in the New York Times daily reports of gold shipment receipts is that the removal of gold from China was illegal at the time, according to both the Chinese government and the occupying Japanese army in the areas they controlled. The US was therefore not always successful in its attempts. In one case, a New York Times article dated October 25, 1938 is headlined, “US Liner Yields to Japan on Cargo”, stating that the USS President Coolidge was forced to unload $2.8 million in gold in order to get its Shanghai clearance papers. It states further that the US Consul protested, but the Japanese insisted the gold was Chinese-owned and had to be returned to the US-owned Chase Bank who were attempting to smuggle it out of China. The Chase bank had apparently tried to disguise their activity by loading the gold onto a US naval vessel during a move to new bank quarters, but the move attracted Japanese attention due to a too-prominent US Marine escort.
I believe it was Sterling and Peggy Seagrave, in their book, “Gold Warriors”, who wrote:
“Here was a fraud that had been used many times by banks all over the world. When a gold certificate was issued in exchange for bullion placed on deposit, embedded codes were used including misspelled words, to “assure” that the owner’s certificate matched the bank records exactly. These misspellings were later easily cited as “evidence” of fraud. In Japan, Prime Minister Tanaka had gone one step further in designing his notorious “57s” to look completely different from normal Japanese government bonds. If he wanted to redeem one for an ally, he could. If he didn’t, he could declare it a counterfeit, and point out that it didn’t even look like a government bond.
The Reagan administration’s answer was similar. A large number of Fed bonds and gold certificates were printed at the Bureau of Engraving and Printing, on the wrong type of paper, with a comic variety of deliberate errors. Many were engraved with the wrong faces, the wrong mottos, the wrong designs, the wrong signatures. Some were even engraved and printed in traditional Chinese characters. This would be a hilarious disinformation campaign, flooding Asia with blatant forgeries, to make the whole idea ridiculous. It would cut the legal legs off anyone trying to redeem legitimate gold certificates or legitimate Fed bonds. They could be laughed out of court.”
It’s important to note here that we are now dealing with two totally different series of certificates. The originals, from the 1930s, are the main issue, but when this story became public in the early 1980s there suddenly appeared a huge volume of newly-printed certificates that were poorly-done, printed with spelling and other errors that would easily enable them to be declared fake. It is these that were apparently printed by the FED, courtesy of the CIA, so as to confuse the issue and justify declaring all such securities as counterfeit. To quote Seagrave again on the original series, “In sum, these FED notes were not created for a covert CIA operation in China, but are authentic in every respect.”
There are a few other very strange events in this story. Upon the discovery of that crashed aircraft, the attendant publicity and the surfacing of redemption claims for these certificates, the FED in 1986 suddenly decided to remelt and recast its entire holding of gold bars from rectangular ingots to a trapezoidal shape. No explanation was offered, but then none was really necessary. Remelting thousands of tons of gold is not a small task nor is it inexpensive, and would be done only in case of calamitous need of some kind, and certainly not for the foolish reason of “changing the shape” of the bars. Whatever the FED’s actual or stated purpose might have been, the main result was that remelted gold no longer contains its original markings, which means there is no longer any way to identify the original source of that gold. And that means nobody can ever prove the gold held by the FED or any of the major US banks is the gold that was looted from China, or indeed any other country.
In 2013, There were media reports that were quickly buried and censored in the US, though not in Europe, about Germany’s quest to repatriate its gold holdings from the US FED. The German government has been storing about half of its gold supply with the US FED, apparently in the NYC FED vaults. Germany’s central bank decided to bring home all its gold, but the FED refused the request, claiming such a move would be impossible today, further stating it would need until 2020 to be able to accomplish the transfer. The German government then asked to visit the FED vaults to inventory the gold and determine its actual existence, but the FED refused to permit Germany to examine its own gold. The reasons given were “security” and “no room for visitors”. Nothing else. Upon determined insistence at this strange turn of events, Germany did finally send some staff to the FED, who were permitted only into the vault’s anteroom where they were shown 5 or 6 gold bars as “representative of their holdings”, but were permitted to view nothing else. German officials returned a second time, with even more determination, at which time the FED apparently opened only one of 9 vaults and permitted the Germans look at the stack of gold from a considerable distance, but were not permitted to either enter or touch. And they returned home. After repeated insistence, Germany did recover a small portion of its gold holdings, but almost none of that came from the US FED; most was shipped to it from France’s central bank – owned by the same private owners who own the FED.
Speculation has been brewing for many years that the FED doesn’t actually have much gold, that it has either sold it off, lent it out, or used it as collateral for borrowings. In any case, there are many claims today that the gold being stored on behalf of many nations, doesn’t actually exist. Nobody, other than FED staff, have actually been permitted inside the vaults to see or inventory any of the gold, and there is no evidence that the gold actually exists, other than the word of the FED.
Even worse, the situation is the same with the supposed gold depository at Fort Knox, the storage location of what is supposed to be the entire gold holdings of the US Treasury. Most people believe Ft. Knox is a government vault, but while it is built on government land it is managed by the FED and the entire contents are the property of the FED, not of the US Treasury. This has been true for a very long time; since the creation of the Federal Reserve System in 1913, the contents of Fort Knox have belonged to the FED but guarded by the US military and domestic private security. But nobody knows what is there.
The last audit, and the last public visit, was in 1953, just after U.S. President Dwight Eisenhower took office. No outside experts were allowed during that audit, and the audit team tested only about 5% of gold there. There hasn’t been even an inventory, much less a comprehensive audit of Fort Knox in over 60 years. In 1974 six Congressmen, one Senator and the press were allowed to enter Fort Knox to see for themselves if the gold was there or not. The tour showed that there was something in Fort Knox that looked like gold but, all the same, it sparked even more controversies. Only a small fraction of the gold reserves was made available for viewing, and one Congressman published a report saying that the gold bars held in the fort were less heavy than expected. During recent years, several US politicians have claimed that there is a high chance that neither Fort Knox nor the FED have any gold, or perhaps only a very small amount, and have demanded a full and public inventory and testing, but the FED have resolutely refused.
Given the near certainty of the US FED and Treasury having little gold, there has been much speculation about the location of the world’s gold holdings which exist at the FED on paper but not in reality. I do not know where the gold is, but if I had to guess, I would guess it is all sitting deep in the mountains in Switzerland, in the many hundreds of tunnels drilled deep into the rock underneath the new headquarters of the BIS – the Bank for International Settlements, which is in turn also owned by the same people who own the FED and various other European Central Banks.
The Great Gold Robbery – Part II – Citibank
Citibank has been a criminal organisation throughout its entire life, from the day it was born in the 19th century with incestuous ties to the Rockefellers and their Standard Oil empire. By the time in the early 1900s when the bank changed its name to National City Bank of New York, it was already engaged in a multitude of criminal schemes in the US, and soon expanded its vampire tentacles overseas, most especially to China. It pushed, tested, and violated, most domestic banking regulations but it was in China where the owners of the bank succeeded even beyond the wildest dreams of avarice. It should be noted here that the few ‘biographies’ of Citibank in existence have mostly been written by the bank itself, mostly as self-praise for its apparent growth and success. To counter this, many skeptical authors attempting a more honest and penetrating biography of this criminal monster have complained that Citibank’s archives are off-limits to researchers. And for good reason, as we will see.
Peter James Hudson, in his investigative journalistic attempts on Citibank, wrote, “How does one write capitalism’s history without capitalism’s archives? Citigroup’s (archives) are closed to researchers.” He noted also that one of the more important texts published on Citibank “Citibank, 1812-1970, was published by Harvard University Press but written by bank executives as an exercise in corporate strategy.” He was attempting to reconstruct the history of Citibank from independent archives that were “dispersed, uncollected, un-collated, and largely unknown – and created not by Citigroup, but by artists and activists who have protested its activities.” He stated that this work would offer “a radical counter-narrative to a corporate history written by a corporation”.
In its promotions in China, Citibank boasts of having been first established in China in 1902, testifying to its devotion to China by displaying a photo of some currency issued in China by the National City Bank of New York. But then from 1902 until Citi’s trepidatious re-entry into the backwater of Shenzhen in China in the late 1980s, there is nothing. Specifically, there is no information on Citi’s activities during this period, other than the names of a dozen cities with branch locations and a kind of muffled statement that Citibank left China “because of the war”. During that period, we have only silence. Not only silence, but a strange lack of the written word. In fact, the Internet, at least those parts that can be controlled, have been totally sanitised. According to the entire world’s media and historical archives, Citibank did not exist in China from 1902 to 1949, in other words from the day it arrived to the day it left. We will soon learn why.
In the early 1900s in most countries, the governments’ central banks did not issue currency, leaving this task to the various chartered banks, each of whom was permitted to issue unlimited amounts of currency provided it had sufficient backing in gold or silver to correspond to the volume of paper money it printed. And in many countries, paper currencies from many banks circulated simultaneously and were freely interchangeable, accepted as cash based on the assurance of precious metal backing. This condition was also true in China, with both Chinese and foreign banks issuing their versions of paper money.
In Citibank’s case or, more correctly, the National City Bank of New York, permission was granted to open branches in Shanghai and to issue paper money based on the requirement of precious metal backing, a stipulation with which Citi complied. But then with controls lacking due to the disruptive interference in China by the Western powers, Citi became ambitious and expanded its branch network to twelve different cities – without permission – and began issuing unlimited amounts of currency in all of them, but without the gold or silver underpinnings. Citi was nearly bankrupt when it entered China, with no ability to commit further assets, so the bank simply began printing and issuing totally unbacked Chinese currency with the assumption that it would be accepted by the population who would provide silver in exchange. This was true “suitcase banking”, since these were simply illegal shell banks with no assets and no registered capital. I could find no definitive record of the total amount of fake currency Citi issued, but it would certainly have been in the tens of billions of dollars, contributing heavily to China’s inflation and producing massive criminal profits for the bank.
But there was much more, with the owners of Citibank crafting and perpetrating one of the largest fraudulent thefts in China’s entire history. Citi wasn’t satisfied with the profits from selling paper money and devised a scheme to plunder all the gold from Chinese households, gold which was held by most citizens as a traditional form of savings. The bank began a widely-promoted campaign to encourage all Chinese to bring their gold bars to Citibank for storage in the bank’s vaults, on the premise of safety, all citizens being given paper gold ‘certificates’ as evidence of their deposits, certificates which could be redeemed at any time for the actual gold. The Chinese government made strenuous efforts to discourage its citizens from participating in this program since it had already been abundantly clear that the foreigners could not be trusted.
Unfortunately, many Chinese chose to disregard these warnings and trustingly handed over their gold bars to the National City Bank of New York for safekeeping. But then one day when the vaults were full to overflowing and the handwriting on the wall, our Jewish bankers had a change of heart. They transferred all that gold from their vaults to US military vessels and sent it all home to New York. Then Citibank just closed its doors, said “Good-bye, China”, and returned home. From reports I’ve seen, that gold eventually ended up with the US FED. You will recall the earlier comments on the FED suddenly re-melting and recasting all its gold holdings. Now, you know why.
Interestingly, the occupying Japanese military were able to confirm this sequence of events, which was reported in the New York Times, having suspected the process and initiating the habit of inspecting US warships prior to departure from Shanghai, and in more than one case ordering the Americans to offload the gold, some of it apparently ‘belonging’ to the Morgan and Chase banks. But it seems most of it managed to escape, and once again the total was certainly in the tens of billions of dollars – and this was in the 1940s. Given the proven cases and moderate estimates of residuals, it is abundantly clear that Citibank owes Chinese citizens far more than the entire capital value of the bank today.
According to reports of the time of Citi’s evacuation, many people brought their gold certificates to the bank’s Shanghai branch for redemption but were stalled by the staff and found signs stating that all Citibank’s business had been settled and citizens should refer to the Bank of China. It was later apparent that Citi had long been preparing for its retreat from China, leaving virtually no evidence of anything in its offices, having removed or destroyed all evidence of all events of its 40+ year criminal history in China. It also seems apparent from the historical record that Citibank was in desperate straits during this period, having lost its assets in Cuba and South America, in Russia after the revolution, in the US during the depression, and was on the verge of insolvency. Various books have referred to this period, one published by Harvard University stating that Citibank’s miraculous development was due entirely to its “rapid acquisition of assets” in China, some authors documenting Citi’s China assets at about 30 billion yuan in Northern China and another more than 10 billion in the South, these ‘acquired assets’ having been transferred to the US.
Naturally, even still today, there are many Chinese with all their intact historical documentation who want to recover their gold from Citibank. Many groups of Chinese have hired lawyers in both China and the US in attempts to present their documented claims to various courts and, just as naturally, Citibank does all within its power to prevent such claims being heard in any court anywhere. In China, Citi’s defense is that it operated as a different legal entity – the National City Bank of New York – and therefore cannot be sued in China since that entity no longer exists. However, prosecution would be admissible in the US since Citi is deemed the legal descendant of that prior bank. One group in particular presented all the supporting evidence to document a claim against Citibank for $250 million. Eventually a New York court agreed to admit and hear the case of these Chinese plaintiffs, with the odd stipulation that each plaintiff would have to appear in person in the US courts to give their testimony, and further that they would have to present in person the originals of all documents. Copies would not be accepted.
No problem so far. But when these Chinese plaintiffs attended the American consulates in China to obtain their travel visas, the US State Department refused to accept any of the applications and denied all travel visas to the US. The Americans refused to offer any explanation, but then we don’t really need one, do we? No travel visa, no personal appearance in a US courtroom, no trial, no refund of billions in gold by Citibank. It was not helpful or appreciated when US State Department officials mocked these Chinese plaintiffs by telling them to “pursue your claims in China”, knowing full well that could not be done. An easy way to think about this is if I, John Jones, cheat you in a business deal then change my name to Harry Smith. You can try to sue John Jones in a court, but that person no longer exists, and the ‘legal person’ of Harry Jones has never had any dealings with you. This is the US ‘rule of law’ of which Americans are so proud, and is the problem with suing Citibank in China. Of course, even American lawyers said the actions of the US Consulate in Shenyang (in refusing the visas) were illegal, but in China they have diplomatic immunity and cannot be charged or forced to appear in a court. They could be deported as punishment, of course, but would simply be replaced by others reading from the same script.
Actually, there was one plaintiff who did manage to obtain a short-term travel visa to the US in preparation for filing a court claim (18). This man, Shao Lianhua, claimed that first he experienced extreme difficulty in finding an American lawyer to take his case, claiming US lawyers treated his party with contempt, stating openly they would not assist any Chinese in extracting money from the US. Nevertheless, having arrived in the US and obtaining a lawyer, Shao experienced visitors at his hotel room the night prior to his court appearance. Two heavily-armed policemen forced entry to his room and demanded a search of his possessions, specifying the documents related to his gold certificates. This was clearly an illegal act since they had neither search warrant nor probable cause. Shao had had the presence of mind to have hidden his documents where they could not be discovered, but was unable to prevent the search. He finally called his lawyer, and apparently after some protracted discussions the police left empty-handed. But they were not police. From their cards and photos, the lawyers eventually identified the men as US Treasury Secret Agents. We can legitimately ask why the US Treasury, acting on orders from the White House, would send armed agents to perform an illegal search for the sole purpose of confiscating the originals of crucial evidence of Citibank’s fraud.
In any case, Shao returned to China, also empty-handed, and that was the last travel visa granted to these Chinese plaintiffs. I would say we needn’t hear any more stories about the “independence” of the US judiciary, or foolish ideological tales about “rule of law” or of Americans “playing by the rules”. To further make the point, in one of its more ideologically bankrupt articles, the New York Times wrote: “Without a democratic political system … can we trust the Chinese to play by the rules?” It would appear to be countries with a democratic political system that can’t be trusted to play by the rules.
There are many other validated claims in addition to the one for $250 million mentioned above. One listing of stolen Chinese civilian gold by Citibank totaled $100 million from one family or group of families, in nine tranches dating from 1912 to 1933. Another listed many millions in 19 tranches dating from 1934 to 1941. Another listed 17 tranches dating from 1907 to 1913, in individual amounts as high as $25 million. The evidence is irrefutable that while the US Treasury, the FED, and the CIA, were busy extracting the gold of nations from the world’s central banks and large commercial banks, Citibank, Morgan and Chase were busy sucking all the personal gold holdings from the population. Working in concert, to amass for the FED and US banks the entire world’s gold supply.
But Citibank isn’t lacking gall. In 2002, Citi was widely promoting a grand celebration of its “100 years in Asia”, during which it “helped shape Asia’s financial landscape and brought innovative consumer banking to millions of customers”. Not only that, but as the bank’s presence is again growing in Asia, we are told “Citibank is ideally positioned to serve the diverse financial needs of the region for the next 100 years.” I think we can all be forgiven for saying, “No thank you. We still haven’t recovered from the way you “shaped” our economies in the last century.”
One of my colleagues made a suggestion I thought was workable: to establish a Chinese “Gold Museum” containing all the evidence, and locate it near a Citi branch or Citibank’s head office in China, and notify all the media. It might even contain an “Economic Holocaust Clock” to display both the principal and the accruing interest on this massive theft. Another colleague suggested that a Venture Capital firm specialising in litigation might be interested in collecting, authenticating and processing these certificates with a view to creating a nation-wide class action. Such moves might well pressure Citibank to either acknowledge and pay for their crime, or pack up and leave China forever.
There is much more to this story, leading to reasonable speculation that Citibank pulled the same stunt in perhaps a dozen countries. If it works in one place, it should work everywhere. At the same time, in 1902, that Citi (International Banking Corporation) registered itself in China, it also opened banking operations in Manila in the Philippines, in Calcutta in India, in Singapore, in Yokohama in Japan, in Brazil in 1915, in Argentina, and in other countries. Citibank (and the US generally) was so hated in Argentina that in 1927 a group of patriots (or anarchists) blew up both Citibank’s headquarters and that of the Bank of Boston, very possibly as retaliation for the same crimes. For good measure, these same people (or perhaps others) also bombed the US Embassy and the Ford Motor company. Citibank has been hated in several places, and I would say for good reason. Evidence on Citibank’s activities prior to World War II anywhere in the world is extremely difficult to find. Courtesy of everyone from Google to the mass media to the US government and including Citibank itself, the public record has been sanitised to an astonishing degree. There are many people in high places who really do not want this information to escape into the public realm.
Citibank’s website does give us this: “Citibank’s initial entry into China was back in 1902 when it launched its first branch in Shanghai, the commercial and financial center of China at the time. Over the next thirty years, Citibank opened up fourteen branches in China. Most of the branches were in major port cities and tailored to suit the needs of foreign expatriates and traders in China. Note the last sentence about activities tailored to suit the needs of “foreign expatriates and traders” in China. There exists a high probability that these were the Sassoons, Kadoories, Hartungs and others involved in the opium trafficking in China at the time. If my suspicions are correct, Citibank established itself in China initially for the purpose of dealing in and laundering drug money, the same reason the HSBC was established. Citi is of course silent on this point, saying only that it quietly returned to China in the mid-1980s.
One of the very few references on the Internet dealing with Citibank in China was a brief paper from an American university stating that Citibank’s “… Chinese branches even remained open and profitable through the Great Depression that swept across the Unites States in the 1930’s. However, in 1940, due to the outbreak of World War II, all fourteen branches were closed heeding the Japanese invasion of mainland China and all of Citibank’s expatriate workers were ordered to return to the United States for their own safety. By 1942 all the branches were closed and the Communist Revolution after the end of the war prevented Citibank from resuming its former business in China. They were, however, able to return to open their branch in Hong Kong.” That’s cute. Citibank left China not to escape its crimes but because of the war, and it was prevented from returning not due to its massive thefts but because of those uncooperative Communists. Blame the victim.
As a sort of epilogue, I could note that Citibank was born as a criminal enterprise in 1812, Moses Taylor heavily bribing the New York State Legislature to grant him a banking charter. One author noted that with the Jewish dynamic duo of Moses Taylor and James Stillman running the show, “Citibank committed historical crimes of enormous magnitude”, reaping huge sums from defrauding investors and corrupt deals with government officials. A US Senate Banking Committee accused Citibank of fraudulently promoting the sale of stocks at vastly inflated prices, and being 50% responsible for the devastating 1929 stock market crash. In fact, it was specifically to protect the public from Citibank, by that time one of the largest US banks, that the government first enacted securities legislation. Citibank fails to take credit for this on its website biography.
Citibank’s crimes in China involved much more than the issuing of billions in fraudulent currency and its massive gold theft. Citi participated in the looting of several Chinese banks, the Bank of Hankou being one, was also involved on an apparently large scale in the smuggling of invaluable artifacts from China, in the smuggling and sale of arms to facilitate China’s civil war, and heavily involved in espionage for the US government. I have seen Citibank documents listing the location and movement of aircraft and troops which were regularly forwarded to the US Embassy or other officials. The record indicates that the US government was not only aware of Citibank’s criminal activity but used Citi as a direct tool to implement many of its anti-China policies, and in fact Citi could not have succeeded in its crimes without the active assistance of the US government and military. For one thing, Citibank’s loot was shipped out of the country on US warships.
US Gold Purchase Act of 1933
One of the more interesting features of the US government is that it will cheat everyone equally, making no distinction between foreigners and American citizens though, to be fair, this unique attitude rests primarily in the White House and the hidden cabal who control it, rather than with the Congress. The picture is different for corporations, of course, American firms being protected even to the declaration of war, but the peoples comprising the ‘general public’ are indiscriminately considered fair game. As one example of many, in 1933 President Roosevelt implemented Executive Order EO 6102 that prohibited US citizens from holding gold, forcing all individuals to turn over all gold bullion, coins and certificates to the Treasury in exchange for (paper) dollars. Essentially, the country’s entire gold supply was nationalised. Immediately upon the FED taking direct ownership of all American gold holdings, the dollar was devalued by about 65%, raising the real price of gold by a corresponding amount and cheating US citizens out of billions of dollars. The official narrative was that the Executive Order was a measure meant to prevent “hoarders” from profiting from the dollar’s devaluation, but the real purpose, and the only result, was to cheat all citizens out of a 200% increase in the price of their gold, constituting a transfer of wealth of that amount from the people to the US Treasury (or the FED).
But EO 6102 did more than cheat American citizens; it also cheated foreigners, including foreign central banks. At the time, about half of all the billions of gold registered as existing in the US and held by the FED and various US banks, was owned by foreigners, often the central banks of other nations. But the financial positions of both the US government and of the FED were precarious, and gold was draining from the US at increasing rates from fears and expectations of a devaluation of the dollar. Very quickly, the FED no longer had sufficient gold reserves to honor its commitment to convert the US currency to gold, so Roosevelt suspended US participation in the gold standard and effectively devalued the dollar by about 65% by raising the price of gold. The move was entirely political, meant to protect and insulate the US and the dollar (and the banking cabal that controlled the White House) from inter-war monetary instabilities, the probability of the international economic order disintegrating into chaos as a result was not a concern. This was not the first, and would not be the last time, the US would use its privileged financial position to avoid domestic pain by wreaking economic havoc on the world. But this was only part of the plan; the other part was soon to come.
US Silver Purchase Act of 1934
Steve Hanke, an Economics Professor Johns Hopkins University in Baltimore, wrote a good article on this topic in the November, 2010 issue of Globe Asia, titled, “America’s Plan to Destabilise China – Currency: The Secret Weapon”. It is available online and worth reading. (19)
On August 9, 1934, President Roosevelt implemented yet another Executive Order, this time number 6814, called The Silver Purchase Act (20) (20a) , that specified essentially two things. One, the seizure of all silver in the US, and two, a huge program to purchase silver on the open market at almost three times the then current market price. From any rational standpoint, this action was bizarre.
On a spurious pretense of being under pressure from domestic silver producers (who were not suffering at all), Roosevelt defied overwhelming criticism from every side by enforcing this act which directed the Treasury (or the FED) to purchase silver at a price of at least US$1.29 per ounce, which was nearly three times the then market price of 45 cents. The US government did indeed nationalise the US silver stocks, but by purchasing that silver from Americans at the old price of $0.45. Only after that did the Treasury offer to purchase silver at the much higher price. This action vacuumed up billions of scarce government funds at the depth of the Great Depression when most Americans were struggling to survive and avoid starvation and bankruptcy. The people paid an enormous price for a policy of no apparent benefit to anyone. Silver producers benefitted marginally and temporarily, but the entire industry employed only a few thousand people, so this massive program was definitely not intended for them, regardless of the propaganda narrative.
But there’s more to the bizarre nature of this Silver Purchase policy. The legislation primarily authorised the Treasury and the FED to purchase silver “from foreign countries” on the open market – on the New York Futures Exchange. But that never occurred. Nor would it. All we need to do is think. Not even a crazy person would spend money buying something at $1.29 when that commodity was widely available on world markets everywhere at $0.45. So, what really was driving this new policy?
Well, aside from the nonsensical and clearly fabricated story of helping non-struggling domestic silver producers, there was another charitable intent – to “help” China, a plan that had been several years in the making. As Steve Hanke noted:
“… China was on the silver standard. Silver interests asserted that higher silver prices – which would bring with them an appreciation of the yuan against the US dollar – would benefit the Chinese by increasing their purchasing power. As a special committee of the US Senate reported in 1932: “Silver is the measure of their wealth and purchasing power; it serves as a reserve, their bank account. This is wealth that enables such peoples to purchase our exports.”
To this time, China had been on a silver standard for its currency for hundreds of years, the only currency in the world fully backed by precious metal, and responsible for creating a solid and stable economic base. It was for this reason that China managed to escape altogether the Great Depression that was ravaging the rest of the world. The American silver policy of course dealt a devastating blow to this centuries-old stability because the Americans were not purchasing silver from foreign countries on the open market, but only in China through the American banks like Citibank, Morgan and Chase. These US agents offered Chinese three times the market price for their silver, naturally resulting in a flood of silver flowing into these banks and from there to be shipped to the US.
The first effect, of course, was that the exchange rate between the US dollar and the Chinese currency collapsed. The high silver price did indeed make imports cheaper but the country’s exports totally collapsed and the GDP plunged almost instantly by about 25%. The second result was that the flood of silver attracted to the American banks was immediately shipped out of China, eventually destroying the silver-standard backing for China’s currency, which destroyed China’s financial system and left the economy in chaos. Massive deflation ensued that destroyed the agricultural sector and left millions of farmers and peasants suddenly destitute. Even worse, most businesses carried silver-backed debt that would now have to be repaid at three times the price; of course, no businesses had the cash flow to service such obligations and countless tens of thousands of them went bankrupt, collapsing the job market. China’s total financial system was also on the brink of collapse, all of which served to suddenly dump China into the middle of the Great Depression, eliminating decades of painful effort to rebuild the nation after a century or more of plundering by the West. At that point, China had no choice but to abandon the silver standard and adopt a paper currency.
China did of course attempt to implement severe export controls on silver but these were largely unsuccessful because most silver was smuggled out of China through the US banks – Citibank, J. P. Morgan and Chase – who were immune from Chinese export regulations and who had at hand the services of the US military with its warships to transfer silver out of China without effective challenge.
“In an attempt to secure relief from the economic hardships imposed by US silver policies, China sought modifications in the US Treasury’s silver purchase programme. But its pleas fell on deaf ears. After many evasive replies, the Roosevelt Administration finally indicated on October 12, 1934 that it was merely carrying out a policy mandated by the US Congress. Things didn’t work as Washington advertised. It worked as “planned”, however. As the dollar price of silver shot up, the yuan appreciated against the dollar. In consequence, China was thrown into the jaws of the Great Depression.
One compassionate author wrote, “What economic folly – and lack of statesmanship, one might say – it was to prioritize the well-being of 5,000 people [silver producers] at the expense of the American public and the 450 million Chinese who did nothing to invite this misery. Needless to say, the silver purchase bill was bad economics. But it was bad politics as well. The damage it caused extended far beyond the economic sphere. It spilled over into US-China relations.” Laudable sentiments, but quite naïve.
So, who gained? The American banks and the cabal of European bankers who controlled the White House and the world economy. China’s economy was growing and the country was emerging in strength beyond the ability of the bankers to restrain it, so something had to be done to maintain the income disparity between the Empire and the peasants. The Grand Prize was the permanent destruction of China’s silver-backed currency and the setting back of China’s economic progress by perhaps twenty years. US silver producers profited for a short time, but the American people lost heavily when their government wasted billions of dollars to collapse China’s economy instead of rebuilding America’s, this policy probably extending the depression by years. Perhaps the only good result was that this fiasco contributed in a major way to the collapse of public confidence in Chiang Kai-Shek and his US-supported Nationalist government, paving the way for Mao to take over and kick all the foreigners out of China.
I find it distressing that even today the standard narrative in all the American history and economics textbooks begins with, “Although the Silver Purchase Act was intended primarily as a commodity support program for silver producers in the United States …”
To add some additional context to this, Chiang Kai-Shek’s Nationalist government was still in control of China during this period, with the heavy support of the US government and military and, while the US government was working to destroy China’s economy from the outside, the American-educated and (I would have to say) American-loyal, T. V. Soong was helping Chiang to destroy China from the inside. I frankly doubt Chiang had much of an understanding of economics or much else, but Soong was brilliant and, with his guidance, Chiang quickly managed to nationalise all Chinese banking, then operate the government almost entirely on debt, thus running the economy into the ground. And it was Soong who, in 1928, founded the “State Bank of the Republic of China”, a new foreign-owned Chinese Central Bank that was patterned on the US FED. It was also Soong who failed to react to the Americans’ Silver Purchase program, who then adopted a paper currency, and forced all Chinese to surrender their silver to Chiang’s new Central Bank – a bank which, conveniently, was exempt from silver export restrictions. One could conclude that both Chiang and Soong were involved in exporting their own country’s silver to the US, all in keeping with the American plan for China. It was this partnership that finally sealed the doom of Chiang’s government while nearly destroying China in the process. But again, it was this that paved the way for Mao to gain overwhelming support and wrest control of the country from (primarily) the Americans and place it back in the hands of the Chinese people.
I would add that Soong was brilliant enough to understand precisely what was happening, and capable enough to have stopped it if he had cared to do so. I have not fully researched Soong, but my feeling at the moment is that he was essentially an American agent working on the inside. Certainly, the man was not so stupid as to not understand the results of his own actions in assisting Chiang with the adoption of a paper fiat currency and a collection of bankrupt national banks that resorted to printing money as a replacement for revenue. Chiang’s Nationalist government printed so much currency that money depreciated by a factor of more than 1,000, a devastating hyper-inflation all under Soong’s watchful eye. It was so bad that government currency printing presses were unable to maintain the necessary pace, and Chinese currency was being printed in England and flown into China over the Himalayas in US military C-47 aircraft.
Just so it doesn’t go unsaid, the US was attempting something similar in the period after 2005, producing for a decade an almost overwhelming amount of media noise and political pressure to force another massive upward revaluation of the RMB, on the fraudulent basis that the Chinese currency was “at least 25% to 40% undervalued”. Had China acceded to this pressure, the country would have plummeted into the depths of yet another severe depression – which was the plan.
God Save the Queen
This is a little-known and never-discussed part of US history, but yet one of the major factors that propelled the US to its overwhelming manufacturing and economic supremacy after the Second World War. It involves the final destruction of the British Empire, for which no thinking person would have regrets, and also the conditions obtaining after the end of World War II. The First World War caused Britain to lose about 40% of its former Empire and wealth, and the Second World War completed this task, but not without the little-known predatory intercession of America.
During the Second War, Britain needed huge volumes of supplies of food, raw materials, manufactured goods, armaments and military hardware. But Britain’s factories were being destroyed by the war, and in any case lacked sufficient productive capacity. Britain also increasingly lacked money to pay for those goods, its solution being to purchase on credit from its colonies. Canada, India, Australia, South Africa, and many other nations supplied England with necessary goods and war materials, on promise of future payment. The plan was that after the War ended, Britain would repay these debts with manufactured goods which a rebuilt Britain would be able to supply. These debts were recorded in the then British currency of Pounds Sterling, and maintained on ledgers in the Bank of England, commonly referred to as “The Sterling Balances”.
After the Second War ended, the US was the world’s only major economy that had not been bombed to rubble, a nation with all its factories intact, and able to operate at full capacity producing almost everything the world needed. The US had enormous capacity to supply, but the many countries of the British Empire, whose economies were in sound condition and had money to pay, were refusing to buy from the US since they were waiting for the UK to rebuild and repay the outstanding debts with manufactured goods. The US government and corporations realised that this enormous market consisting of so many of the world’s nations, would remain closed to it for perhaps decades, that it would have little or no commercial success in any part of the former British Empire so long as those Sterling Balances remained on the ledgers in the Bank of England. And this is one place where the true nature of America comes into sharp focus, an incident which serves better than many to illustrate the story of American “fair play” and of the US creating “a level playing field”.
At the end of the war, Britain, physically devastated and financially bankrupt, lacked factories to produce goods for rebuilding, the materials to rebuild the factories or purchase the machines to fill them, or with the money to pay for any of it. Britain’s situation was so dire, the government sent the economist John Maynard Keynes with a delegation to the US to beg for financial assistance, claiming that Britain was facing a “financial Dunkirk”. The Americans were willing to do so, on one condition: They would supply Britain with the financing, goods and materials to rebuild itself, but dictated that Britain must first eliminate those Sterling Balances by repudiating all its debts to its colonies. The alternative was to receive neither assistance nor credit from the US. Britain, impoverished and in debt, with no natural resources and no credit or ability to pay, had little choice but to capitulate. And of course, with all receivables cancelled and since the US could produce today, those colonial nations had no further reason for refusing manufactured goods from the US. The strategy was successful. By the time Britain rebuilt itself, the US had more or less captured all of Britain’s former colonial markets, and for some time after the war’s end the US was manufacturing more than 50% of everything produced in the world. And that was the end of the British Empire, and the beginning of the last stage of America’s rise.
Americans have been brainwashed and propagandised into believing that their country selflessly supported the European war effort, and generously planned and financed the entire rebuilding of all of war-ravaged Europe. Their heads are full of ‘lend-lease’, the “Marshall Plan” and much more. But here we have three silent truths: One is that the US assisted Europe and the UK primarily because it needed markets for its goods, just as Henry Ford raised the salaries of his employees so they could afford to purchase his cars. US corporations found little purchasing power in the European nations that were now largely destroyed and bankrupt, and without these markets the US economy would also have crashed. It was commercial self-interest rather than compassion or charity that prompted the US financial assistance to the UK and Europe. All the US did was provide large-scale consumer financing for the products of its own corporations, with most of the ‘financing’ never leaving the US. The Marshall Plan was mostly a welfare program for American multinationals. The second truth is that Europe and England paid heavily for this financial assistance. It was only in 2006 that Britain finally paid the last installment on the loans made to it by the US in 1945. The third is that the post-war financing of Europe was not primarily for reconstruction but as the foundation for an overwhelming political control that has largely persisted to this day. Funds from the American’s vaunted Marshall Plan were spent more to finance Operation Gladio than European reconstruction.
As William Blum so well noted in one of his articles, the US was far more interested in sabotaging the political left in Europe than in reconstruction, and Marshall Plan funds were siphoned off to finance political victories for the far right, as well for the violent terrorist program known as Operation Gladio. He also correctly mentioned that the CIA skimmed off substantial amounts to fund covert journalism and propaganda, one of the conduits being the Ford Foundation. As well, the US exercised enormous economic and political restrictions on recipient countries as conditions for the receipt of funds, most being used to help re-entrench the European bankers and elites in their positions of economic and political power (after a war that they themselves instigated) rather than to assist in reconstruction. In the end, the Europeans could have done as well without this so-called ‘assistance’ from the US, and Europe would have been far better and more independent today had they refused the offer. The conviction of most Americans that their nation ‘rebuilt’ Europe is pure historical mythology created by propaganda and supported by ignorance.
My Currency, But Your Problem
There was yet another factor that helped lead the US to its powerful international position, and this was again partly an accident of fate and partly the American predatory quest for worldwide supremacy and domination – the Dollar as the world’s Reserve Currency. A reserve currency is simply one which nations commonly hold in their central banks for the payment of international debts resulting from trade and investment. In order to function as a reserve currency, there must be an adequate supply of this money for all who need it, the currency must be easy to buy and sell, it should be stable, and of course nations must have some confidence in the country issuing it. Canada might have done as well, or Australia, or Switzerland, but these are relatively small economies with only a small volume of currency available, certainly not sufficient to fuel the world’s trade. The European currencies were neither stable nor of much value after the war, and the level of confidence in them was small.
The US Dollar, however, filled these criteria rather well. After the end of the Second War, the world’s major nations arranged what we call the “Gold Standard”, which meant that a country could not print more money than it actually had in gold reserves. This was intended to maintain stability and to avoid any excess printing of money which would lead to inflation and could destroy the international monetary system – as had occurred in the past. In theory, all international debts were to be settled in gold, but in practice this was cumbersome and inconvenient. Since the US dollar existed in large volume and was – in theory – fully guaranteed to be exchangeable for gold at any time, all nations simply settled their accounts in US dollars. But the faith in doing so was predicated on the promise that any nation could, at any time, exchange its holdings of US dollars for real gold.
The system worked well enough for about 20 years, until by early 1971 the US was under enormous financial pressure from the huge sums it had borrowed to finance its military atrocity in Vietnam. The final straw came when France, not blind to what was happening, and concerned about the ability of the US to maintain the dollar’s value, insisted on exchanging all its dollar holdings for gold, as per the agreement. The US gold supply was insufficient to comply, and the US faced the very real possibility of all nations demanding an exchange. Faced with this pressure, the US unilaterally declared the world’s financial agreement null and void, withdrew from its participation in the gold standard, refused to convert any nation’s foreign dollar holdings into gold, and left all the world’s countries holding countless billions of US dollars that no longer had any fixed or guaranteed value, but that were sure to depreciate since the US was indeed printing enormous volumes of dollars to finance its Vietnam war. At the time, US Treasury Secretary John Connally told the world, “It’s our currency but it’s your problem”.
Since all nations had accumulated US dollars on good faith but now had no way to dispose of them, they had no choice but to continue using the same US dollar, now of indeterminate value, for all international transactions. This one act of American predatory capitalism imposed a stunning financial penalty upon the world, devastating the values of other nations’ currency reserves. After reneging on the Gold Standard (the Bretton Woods Agreement), the US continued to print huge volumes of money, sending the Western world into an inflationary spiral. From the date of the US default in 1971 to 1981 or 1982, the US dollar depreciated by more than 95%, representing an almost unimaginably huge transfer of wealth from the entire world to the US treasury because all nations holding US dollars suffered that degree of loss in their foreign exchange reserves while US debts remained in heavily-depreciated US dollars, thereby repaying foreign debt at 5¢ on the dollar. In 1971, a fine home in the US cost only $25,000. By 1976, that same home was over $100,000, and by 1983 the price was about $250,000. These prices accurately represent the depreciation of the US dollar during that decade.
Having an international reserve currency bestows significant financial advantages on a nation, and the US has been quite adept at taking advantage of these. The necessary international demand for the dollar permits the US to borrow at lower rates and finance larger deficits for longer. The US, unlike other nations, is able to borrow and repay in its own currency rather than in a foreign one like most other nations. The US therefore can – and often does – shift to its creditors and other nations the losses from a fall in the dollar’s value. With commodities like oil priced in US dollars, the US – unlike other nations – never experiences fluctuations and rises in the prices of these imports. Another advantage is that the US can, and often does, manipulate the exchange rate of the dollar and can, and often does, use this as a political pressure tool to save itself economic pain while inflicting severe damage to world economies.
Since the 2008 financial crisis, the US FED has again ‘printed’ trillions of dollars in a claimed attempt to boost the US economy. But those dollars have no use in a battered US economy, so the bankers and large multinationals take advantage of that free money and transfer it to countries like China and Brazil whose economies are solid and stable. However, once in a foreign country and converted to local currency, this vast supply of dollars does not sit idle. It is placed into the local stock and financial markets, and into domestic real estate. And of course, this enormous flood of buying creates bubbles in both the financial and real estate markets, creating massive profits for the US bankers and a few others, while totally destabilising these other national economies and creating much local hardship, especially for local homebuyers.
The immediate effects are enormous pressure on the foreign exchange rates of these domestic currencies, local stock market bubbles, rapidly rising real estate prices and great inflationary pressure. Brazil’s Real experienced a 30% increase, for example, and China’s RMB was put under great pressure, which was why China re-linked the RMB to the US dollar when the US began its QE process. And of course, at some point these US bankers will simply sell off their holdings to take their profits and return home, crashing local markets and leaving financially devasted local economies. The end result is to provide US banks an opportunity to make obscene profits at the expense of foreign countries, and to pass the pain of its economic readjustments to the rest of the world. This is simply a process of the US using its currency as a colonial tool to plunder other weaker nations, and as just one more weapon in its quest for world domination. It should be noted that this process does not benefit the US in any measurable sense but instead creates hundreds of billions in profits for the Jewish-owned FED and the international investment banks that are also primarily Jewish-owned. It is therefore not inappropriate to question the reason the US is such a willing participant in these vast frauds though, in fairness, the US government has no control whatever over the FED, which means the bankers launch these economic wars entirely on their own initiative while using the US dollar as their “banker’s army”.
As a result of the US FED’s QE, China’s economy experienced a strong inflationary surge to which the government was forced to respond, and the nation’s real estate markets were under sufficient constant pressure that the government was forced to take strong action to curb the excessive demand. China handled these challenges better than any other nation, by restricting the inbound flow of ‘hot money’ and by controlling the exchange rate of the RMB, thereby preventing the financial plundering that Brazil experienced. The FED, the investment banks and the US media, all Jewish-owned, condemned China for taking action to protect itself and having deprived them of hundreds of billions in additional profits with the related additional pleasure of destroying China’s economy. Of course, the US is perfectly aware of the consequences of its actions, and it is difficult to avoid the conclusion that one reason for US resentment of China’s currency management is that it in fact prevents the US from destroying China’s economy.
There is a perspective on the US dollar from the point of view of people who have some and don’t want them. It is only international demand from using the US dollar as the international trade currency – especially for oil – that maintains the value of this increasingly shaky money. If the dollar were to fall dramatically in value, the US economy would quickly collapse, so maintaining the international value is seriously necessary for the Americans. It was for this reason that during the first OPEC oil shock of 1971 the US told the oil-producing nations that it would finally agree to pay the new higher world oil price, but only on condition that OPEC oil would be priced only in US dollars and that the OPEC nations would accept only US dollars in payment. They further informed OPEC that if any nation reneged on this portion of the agreement, the US would consider it “an act of war”. This artificial worldwide demand for the dollar is the only thing that has so far saved the US from extinction.
The current US M1 money supply is around $2.5 trillion, but there are many more dollars floating around the world outside the US than this paltry number, China having more than this amount by itself. The total is unknown, but it is certainly many times the US domestic money supply. If the time should come when the world no longer wants these many trillions of depreciating pieces of green paper and sends them home where they belong, the US money supply would multiply many times, leading to what we know as hyperinflation, resulting in American pensioners taking their wheelbarrows of money to the grocery store to spend them before they depreciate further. When this happens, and it will, the US will quickly join the Third World and become the world’s richest banana republic. A well-deserved fate, I would add. Have you ever played the game called Musical Chairs? The music begins to play and everyone stands up and begins to walk in a circle. When the music stops – and nobody knows when it will stop – everyone quickly sits down, and the one person who has no chair loses the game. This is the situation today with the US dollar: everybody knows the music will stop but nobody knows when, and nobody wants to be that last person holding those US dollars when the music does finally stop.
The World Bank and the IMF
Yet another area by which the US has become such a wealthy nation is the international financial institutions. One of the most insidious instruments of colonisation and empire is the IMF which is totally under the control of the US and a few Western nations. IMF reforms require an 85% majority, but the US conveniently controls 17% of the vote, giving it an absolute veto over all reforms, especially to reductions of Western imperial power. Other colonial efforts are accomplished through the financial machinations of the World Bank and the international Jewish bankers like the Rothschilds, who make unrepayable loans then seize basic infrastructure and millions of acres of land in compensation. Nations weak enough to capitulate to these demands, and there are many of them, are doomed to perpetual poverty and slavery in the worst colonial tradition.
One of the more recent victims was Greece who, having gotten itself deeply into debt and lacking the courage to leave the Euro and revert to its own currency, instead capitulated to the Rothschilds and other bankers who deprived it of all its national assets. In return for interim financing to stave off bankruptcy, Greece was forced to place all its physical infrastructure holdings, including ports, communications, airports, transportation, all state-owned enterprises and more, into a trust which was “entirely outside all influence of the Greek government”. Control of this trust was of course in the hands of those same bankers, who would now determine appropriate selling prices by which they would distribute these same assets to themselves. Today, Greece’s only significant asset is its ability to tax its citizens, which taxes are already spent for the next 40 years to repay the loans to the bankers. The Greek government now has only two functions: one, to collect taxes, and two, to maintain social order by whatever means necessary in order that the taxes can continue to be collected and paid to the bankers. Greece has virtually ceased to exist as a sovereign nation, and there are many others like it.
It has long been recognised in the developing world that institutions like the IMF and the World Bank are simply one of the means by which the Western powers control their colonies. The financial policies forced onto developing nations in return for financial assistance, are precisely those which will inflict the maximum colonial stranglehold to prevent these nations from any possible economic or social progress. They are simply instruments of Imperial financial power, flying moralistic flags of free-market liberalisation while plundering the victims. Under a new international regime of political and financial dependence coupled with a constant military threat, undeveloped nations continue to be exploited by the West in the framework of an international capitalist system, “where it is virtually impossible for any country to disassociate itself from the overall structure”. Joseph Stiglitz, the Nobel prize-winning economist and dissident former chief economist at the World Bank, describes it as having “brought disaster to Russia and Argentina and leaves a trail of devastated developing economies in its wake”. The World Bank and the IMF were primarily designed to plunder the developing world on behalf of the US and European ruling class. World Bank development projects often destroy local culture and environment while providing infrastructure almost free of charge for the further profit of US-based MNCs. IMF-mandated financial measures force the abandonment of health, education and social programs and allow public assets such as infrastructure to be acquired by American-based multinationals or international bankers for a fraction of their true worth. “The net effect of all this is that, contrary to the carefully nurtured myth, developing nations have transferred far more wealth to the US than has been transferred to them, and that, of course, is the whole idea.”
In his article Empire of Capital, George Monbiot made appropriate points when he noted that these institutions and the large powers that control them forced Asian nations to liberalise their currencies only so that Jewish financial speculators like George Soros, Goldman Sachs, and the European bankers could attack them. Americans read about the “Asian financial crisis” presented as some accidental act of God, without being told that it was deliberately planned and executed. All prescriptions from the IMF are intended to drain developing nations and maintain income disparity. They are instruments of financial power for the rich Westerners, who did not end their colonial controls until they had established other means of subjugation. William Blum stated the situation precisely when he wrote, “It was under Reagan administration influence that the IMF and World Bank began widely imposing the policy package known as structural adjustment – featuring deregulation, privatization, emphasis on exports, cuts in social spending – that has plunged country after country in the developing world into economic destitution. The IMF chief at the time was cruelly honest about what was to come, saying in 1981 that, for low-income countries, ‘adjustment is particularly costly in human terms’.”
The policies of the World Bank and IMF are designed to have a high failure rate, leaving nations with perpetual debt and a steady transfer of wealth out of the Third World to the Western bankers. Despite claims of assisting development and alleviating poverty, these institutions typically do the opposite, and in almost every case they force nations to reduce all social and government services, restrict education and health care, and generally force poor nations into perpetual ignorance and poverty. The money lent to these poor nations must almost all be spent in the US or another Western nation, essentially operating as a corporate welfare program for firms like Bechtel, Halliburton and Brown and Root, leaving these companies with the money, and small nations with failed projects and unrepayable debt. James Corbett wrote of the World Bank, “This process was described most famously by former insider and self-described “economic hitman” John Perkins, who wrote his “Confessions of an Economic Hitman” to shed light on the means by which the seemingly benevolent IMF/World Bank system is used to oppress and plunder the very populations it is designed to enrich. According to Perkins:
“So how does the system work? We economic hitmen have many vehicles to make this happen, but perhaps the most common one is that we will identify a country – usually a developing country – that has resources our corporations covet, like oil, and then we arrange a huge loan to that country from the World Bank or one of its sister organizations. Now most everybody in our country believes that loan is going to help poor people. It isn’t. Most of the money never goes to the country. In fact, it goes to our own corporations. It goes to the Bechtels and the Halliburtons and the ones we all hear about, usually led by engineering firms, but a lot of other companies are brought in and they make fortunes off building the infrastructure projects in that country. Power plants, industrial parks, ports, those types of things. Things that don’t benefit the poor people at all; they’re not connected to the electrical grid, they don’t get the jobs in the industrial parks because they’re not educated enough. But they as a class are left holding a huge debt. The country goes deep into debt in order to make this happen, and a few of its wealthy people get very rich in the process. They own the big industries that do benefit from the ports and the highways and the industrial parks and the electricity. “The country is left holding this huge debt that it can’t possibly repay, so at some point we economic hitmen go back in and we say, ‘You know, you can’t pay your debts. You owe us a pound of flesh; you owe us a big favor. So, sell your oil real cheap to our oil companies, or vote with us on the next critical United Nations vote, or send troops in support of our to some place in the world like Iraq.’ And so, we use this whole process as, first of all, a means for getting their money (money we loan them) to enrich our own corporations, and then to use the debt to enslave them.”
In his book, “The Globalization of Poverty and the New World Order,” Professor Michel Chossudovsky of the University of Ottawa provides extensive documentation of precisely how this process has functioned over the years through the Structural Adjustment Loan and Sector Adjustment Loan programs at the World Bank’s disposal. This documentation includes details of the Bank’s oversight of the build-up of Rwanda’s military budget in the run-up to its bloody internal war of 1994, the Bank’s own admission of how its loan-dictated deregulation of Vietnam’s grain market led to widespread child malnutrition in the country, and the World Bank’s contribution (in conjunction with the IMF) to the unprecedented plundering of Russia that took place in the wake of the Soviet collapse. The World Bank, despite its friendly exterior and the lofty platitudes its proponents spout in its defense, continues to undergird a system of exploitation and debt enslavement of developing countries. For half a century, the Bank has been responsible for the furtherance of a Pax Americana built not upon peace, prosperity and free trade but violence, debt and enforced servitude.
Part 6 – Espionage and More
Mr. Romanoff’s writing has been translated into 32 languages and his articles posted on more than 150 foreign-language news and politics websites in more than 30 countries, as well as more than 100 English language platforms. Larry Romanoff is a retired management consultant and businessman. He has held senior executive positions in international consulting firms, and owned an international import-export business. He has been a visiting professor at Shanghai’s Fudan University, presenting case studies in international affairs to senior EMBA classes. Mr. Romanoff lives in Shanghai and is currently writing a series of ten books generally related to China and the West. He is one of the contributing authors to Cynthia McKinney’s new anthology ‘When China Sneezes’. (Chapt. 2 — Dealing with Demons).
He can be contacted at: firstname.lastname@example.org
Reference links How the US Became Rich – Part 5
Japan’s Golden Lily projec
Chalmers Johnson Review of Seagrave’s ‘Gold Warriors’,
Edward Michaud “Corregidor The Treasure Island of WWII”,
US Silver Purchase Act of 1934