Swiss Banker Tells How Gold-Backed Currency Hinders Wars
December 18, 2002 10:09 p.m. PST
Hello Dear Friends and White Knights,
The White Knights are well aware that by using gold, silver, and platinum
to back our new U.S. Treasury currency, this will help to reduce wars.
Below is an article written by a Swiss Banker who explains why precious
metals backed currency hinders those who want to wage wars. This speech
was given during a conference in Austria which ran from August 30 to
September 1, 2002..
My sources tell me the fact that NESARA is due to be announced was known to
some of the people at this conference. Why else would a Swiss Banker
suddenly give a speech about gold-backed currency hindering waging wars?
WHY would a respected Swiss Banker discuss THIS topic when there is NO
other activity to get currencies backed by gold, except the true NESARA
law. ONLY the true NESARA law is causing countries to go back to
“gold-backed” currencies. Clearly, this speech by a Swiss Banker is in
SUPPORT of the true NESARA law.
If you still don’t “get it”, let me explain it this way. When a speaker is
asked to address a conference, the speaker is expected to discuss a
RELEVANT topic. The speaker would only be discussing gold-backed
currencies as a deterrent to war BECAUSE there ARE current activities which
are moving certain countries to actually having gold-backed currencies in
the NEAR future!
There are ZERO other activities anywhere which are calling for various
countries to return to gold-backed currency. ONLY the true NESARA law is
doing this. This speech is another one of the PROOFS that the world’s
experts in banking and monetary systems DO KNOW about the true NESARA law.
Blessings and Love,
Dove of Oneness
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(Lecture by Ferdinand Lips delivered at Humanitarianism at the Crossroads
Congress in Feldkirch (Austria), August 30 - September 1, 2002 and
translated from German).
WHY GOLD-BACKED CURRENCIES HELP PREVENT WARS
[By] Ferdinand Lips, of Lion Capital Group in Z�rich, [Switzerland]
I will start my talk with an allegation. You have gathered here for a
specific reason. You have come because the gold standard was given up in
1914 at the beginning of World War I.
Looking at the program, I see that all of the topics with which we are
going to deal are in some way related to that event. World history proves
that there is a close relationship between monetary systems and war and
peace. It is also evident that there is a close relationship between
monetary systems and ethics and morals.
Unfortunately, it is not widely known that the 19th century was a period of
prosperity and economic growth without inflation. It strikes us like a
fairytale when we discover that in those days the most important currencies
were stable over a long period. The French franc, for example, remained
solid for one hundred years. It was the era of the gold standard.
The Life Span of Currencies
French Franc 1814 - 1914 ……..100 years
Dutch Guilder 1816 - 1914 ……..98 years
Pound Sterling 1821 - 1914 …….93 years
Swiss Franc 1850 - 1936 ………...86 years
Belgian Franc 1832 - 1914 ……...82 years
Swedish Krona 1873 - 1931 …….58 years
German Mark 1875 - 1914 ……...39 years
Italian Lira 1883 - 1914 ………...…31 years
(Pick's Currency Yearbook 1977 - 1979).
How the gold standard worked
The basic rule of the gold standard was a fixed amount of gold for each
money, i.e., each money was defined as a specific weight of gold. Paper
currencies were redeemable into gold at any time. A nation's monetary
reserves consisted of only gold. On an international level, importing and
exporting gold was unrestricted. All balance of payments deficits were
settled in gold. (Balance of payments: the sum of all transactions between
the homeland and other countries).
In this way, gold had a disciplining influence on a national economy. It
limited public spending. It provided citizens with money that maintained,
and even slightly increased, its purchasing power over time and was
internationally recognized. If a balance of payments deficit developed,
gold automatically transferred out of the country. As a consequence, prices
began to decrease. Exports became competitive again and the balance of
payments reversed. If a country had a balance of payments surplus, then
gold entered the country and the economy was able to expand. Upward
revaluations or devaluations were unthinkable. The system maintained its
stability automatically. This is one reason why politicians do not like
gold. Gold forces them to balance their budget.
The 19th century gold standard, the highest monetary achievement of the
The gold standard was neither conceived at a monetary conference, nor was
it the brainchild of some genius. It was the result of centuries of
experience. Great Britain was the architect. At the height of the gold
standard at the beginning of the 20th century there were about fifty
nations, all of them leading industrial nations, which participated in the
gold standard. It was one big clearance community, and it worked.
In his book W�hrungen am Scheideweg (Managed Money at the Crossroads -- The
European Experience), Prof. Dr. M. Palyi wrote in 1960:
"For the first time since Rome's prime did the civilized world succeed in
creating a monetary unit. The commercial and financial integration of the
world was achieved without the help of a military empire or a dreamy
utopia. In theory and in reality, this monetary unit was accepted and
recognized as the only rational currency system. Due to the automatic
mechanism and the discipline to which the monetary institutions were tied,
fluctuations in the exchange rates were very limited if not altogether
impossible. This was the incalculable advantage of a gold currency. Trade
and industry were able to plan ahead. Especially the automatic mechanism
and the 'rules of decent behavior' in monetary affairs observed at the
time, liberated the value of money from the impact of the governments'
whims. They substantially stabilized it on a worldwide basis. Despite all
assurances by the monetary reformers, no reasonably equivalent replacement
has been found in the meantime."
Economist Ludwig von Mises wrote in his book Human Action:
"The gold standard was the world standard of the age of capitalism,
increasing welfare, liberty, and democracy …. In the eyes of the free
traders its main eminence was precisely the fact that it was an
international standard as required by international trade and the
transactions of the international money and capital market. It was the
medium of exchange by means of which Western industrialism and Western
capital had borne Western civilization into the remotest parts of the
earth's surface …. and creating riches unheard of before. It accompanied
the triumphal unprecedented progress of Western liberalism ready to unite
all nations into a community of free nations peacefully cooperating with
one another …. The gold standard is certainly not a perfect or ideal
standard. There is no such thing as perfection in human things. But nobody
is in a position to tell us how something more satisfactory could be put in
place of the gold standard."
The era of the gold standard during the 19th century was the golden age of
the white man. During this period, after Napoleon, there were only seven
wars of any importance.
Post-Napoleonic Wars During the 19th Century
1855 Crimean War
1861 - 1865 American Civil War, abolition of slavery, Abraham Lincoln
1866 Prussian-Austrian War, K�nigsgr�tz, North-German Union
1870 - 1871 German-French War
1877 - 1878 Russian-Turkish War, Congress of Berlin
1894 - 1895 War between Japan and China
1895 - 1898 Spanish-American War
1900 2nd Anglo-Boer War in South Africa
And furthermore: There was no terrorism of the scope we know today.
My claim is that, had the gold standard been maintained, the warring
nations would have had to observe the rules of the gold standard, and,
therefore, World War I would have been over in a few months. Because of the
automated mechanism and the prevalent "rules of decent behavior," financing
the war on credit in a Keynesian style would not have been possible.
Parenthetically, except for Karl Marx, Swiss historian Jacob Burckhardt
describes Keynes as one of the great destructive forces in world history.
Soon after the onset of World War I, the moment came when the world turned
to monetary fraud. Political pressure to finance the war with money created
out of nothing made a sane monetary structure futile and led to the ruin of
currencies -- and a war lasting four years. The world lay in ruins and a
young, hopeful generation was lost somewhere on the battlefields.
The collapse of the international monetary system provokes the demise of
the old world order.
The result of World War I signified the fall of the Old World. Reading
Stefan Zweig's book Die Welt von Gestern (The World of Yesterday), you will
be able to see what the world looked like then, and how cruel it is today.
As we are in Austria today, we should remember what the Austro-Hungarian
Empire represented and denoted how orderly the situation in Western,
Central and Eastern Europe was in those days. One of the most senseless
things to happen in world history was the breakup of the Austro-Hungarian
Empire and everything that was connected to it.
Of course, there is no such thing as a perfect world, but cross the
Hungarian border from the Burgenland and enter the next bigger city,
K�rmend, and then you will know what I am talking about. A few years of
communist rule has laid the land in ruins. Financing the war is what mainly
ruined Germany, then the most thriving country. The Reichsbank financed a
large part of its war effort on a short-term basis, i.e., not with
long-term War Loans like the British. This fact, in addition to the
Versailles Treaty and unreasonable reparation payments, led to
hyperinflation, destruction of the middle class and, finally, Hitler. It
set the stage for World War II.
The monetary tragedy of the 20th century
The return to the gold standard after World War I was a fait accompli. But
it lacked wisdom and power on the part of those in charge. In 1922, at the
Conference of Genoa, the gold exchange standard was introduced. Please note
that it was not the gold standard that was reestablished, it was the gold
exchange standard that was launched. This meant that, apart from gold,
national banks could also use dollars and pounds, i.e., the currencies of
the triumphant nations, as reserves. Suddenly, dollars and pounds were
equivalent to gold. That was inflationary, because dollars and pounds were
now accounted for twice: first, in the country where they were issued; and,
second, in the country that held them in reserve.
Furthermore, it should have been known that paper-ticket currencies were in
no way immune to loss of purchasing power. Therefore, they could not be
permanent and generally valid yardsticks. Gold always keeps its value -
paper currencies do not. Today, it is generally accepted that increased
credit formation was the reason for the uncontrolled speculation in the
real estate and stock markets during the 1920s. Their collapse paved the
way for the crisis of the 1930s. The same thing can be said for the present
stock market crisis. It is also due to immense credit formation over the
past twenty years and lack of monetary discipline provided by the gold
Central banks, banks and the war
When the gold standard was abandoned, central banks were the last barrier
to rampant money creation as long as they were able to maintain their
independence. However, in the meantime we have learned from bitter
experience just how ineffective these so-called keepers of stability were.
An excellent example for this is the US Federal Reserve in 1913. This
fateful institution was founded even before the war. Since, the dollar has
plummeted to about five percent of its former value. Central bank
independence was not what it was cut out to be. Central banks became
compliant pawns of governments and their constituent banks. In today's
non-system, it is precisely central banks that, in conjunction with banks,
make financing of wars of adventure possible by means of unlimited credit
formation. There are no brakes anymore.
In his book Jenseits von Angebot und Nachfrage (The Social Crisis of Our
Time) economist Wilhelm R�pke said: "One can venture the claim that
governments very rarely had complete control over their currency without
abusing it." In today's age of the welfare state, the probability of such
an abuse is greater than ever before.
The tragic decisions of Bretton Woods in 1944
The world had not learned anything at all. At the close of World War II, it
was decided to introduce the gold/dollar standard. A direct result was
inflation in the 1970s. Again, notice the subtlety. After World War I, we
went from the gold standard to the gold exchange standard with dollars and
pounds. After World War II, we proceeded to the gold/dollar standard. The
pound had lost its previous stature in the interim, and, next to gold, the
dollar remained the only valid reserve currency and, then, only because the
dollar was convertible by foreign central banks into gold on demand. It was
a sign of the increasing economic power of the US.
The structure created in Bretton Woods gave Americans the appalling
monopoly to settle their debt with paper-ticket-token money they had
printed. Nobody could have resisted such temptation. When this structure
collapsed on August 15, 1971, we moved to a system of floating exchange
rates. That fully opened the floodgates for creation of money, credit,
deficit spending and speculation.
Today's international order is a consequence
In a speech on August 7, 2002, President George W. Bush said the following:
"There is no telling how many wars it will take to secure freedom in the
homeland." With this comment Mr. Bush announced that there might not only
be a war against Iraq, but many wars around the globe. He did not define
when a war would be considered won or lost. This means that these wars may
continue indefinitely. The consequences of these wars are very clear. Trade
and investment activities will suffer great damage in such an environment
I will now take a closer look at the question of how the US will be able to
pay for these wars. In principle, the US is bankrupt. It has been like that
since August 15, 1971. That was the day America escalated its war against
gold. Not unlike a banana republic, the US defaulted on its sovereign
obligation to redeem dollars for gold as agreed upon in the Bretton Woods
system. Theoretically, the US cannot be warring at all, i.e., under the
strict discipline of the gold standard it would not be possible.
Because of the nation's deficit, there would not be any money left to spend
on an unproductive and destructive war. The US's foreign debt is enormous.
Until the early 1980s, the US was a creditor nation. Now it is a debtor
nation, including a catastrophic balance of trade, which is running up an
annual deficit of $450 billion. And still the US is conducting wars, which
it is paying for with paper-ticket-token money, which basically is the
equivalent of counterfeit. The Americans are creating this funny money
themselves - and everybody has accepted it since 1971. Ever since then, and
for the first time in history, the world has been living on a system of
irredeemable paper-ticket-token money. So we may note that if the world
were on a gold standard, the US could not be conducting any wars. Why?
Because then they would have to pay for them in gold. Gold, therefore, acts
as a braking mechanism. Putting on the brakes has a disciplining effect.
Who, then, actually pays for these wars? The answer is simple. We all do,
out of our savings and our promises of future payment, e.g., our pensions!
It was no different for Kennedy's and Johnson's Vietnam War. We were all
footing the bill by eventual world inflation leading to rapid devaluation
of our currencies.
The 20th century
Contrary to the 19th century, the 20th century was a century of inflation,
hyperinflation, trade and currency wars, waves of speculation, military
conflicts, two world wars, hundreds if not thousands of local wars,
hundreds of millions dead, annihilation of entire nations, mass migrations,
economic ruin, and, finally, the decline of civilization.
Why are there wars? Without a doubt, economic reasons weigh in as the most
ponderous in any string of motivations for international conflict that
ultimately lead to war. They range from primeval struggles for hunting
territories, pastures, salt mines and fertile valleys, to predatory attacks
and conquests of the seafaring and trading nations, all the way to modern
battles for living space, sales territories and, the most important
motivation of all, access to natural resources. Internal political problems
also play a major part. Often wars are started to divert attention from
problems on the home front. In the Middle East, both aspects are involved:
the control over oil resources and the distraction from the disastrous
condition of the US financial system. Saddam Hussein is only a pretext.
These wars continue to contribute to the destruction of currencies'
purchasing power. While a gold coin from the times of Alexander the Great
or Julius Caesar still shines as it did then, it is the fate of the
purchasing power of paper-ticket-token currencies to revert to their cost
of production, and that is nil. The Germans can tell the US a thing or two
about that. A total loss after World War I, another total loss after World
War II, and finally admission to the European currency system, the Euro.
All that happened within less than one hundred years.
Gold-as-money is a precondition for freedom
Not only is there a correlation between gold currencies and war, but also
between gold currencies and freedom. US Federal Reserve Board of Governors
Chairman Alan Greenspan wrote a well-known essay "Gold and Economic
Freedom" in 1966 attesting to this. He recently confirmed that he believes
this essay is applicable today.
Once we remember that one of the first official acts transacted by Lenin,
Mussolini and Hitler (and, by the way, also by Franklin D. Roosevelt) was
to forbid possession of gold, we recognize the context. Even today the
price of gold is manipulated and kept artificially low. Wall Street bankers
and their helpers have been at it for quite some time. In the US a lawsuit
was filed. I cannot say more about this at the moment, but it should serve
as an impulse to reflect on the present situation. These manipulations are
described in my recently published book "The Gold Wars: The Battle Against
Sound Money As Seen From A Swiss Perspective"
All we have today is paper-ticket-token money. It is equivalent to
counterfeit money. It does not offer a citizen any security. He cannot save
enough money. If he does save, most of it is lost. The situation is worst
for recipients of wages and pensioners. In the end he is forced into the
arms of the (welfare) government, and he effectively loses his freedom.
Politicians will mostly resist the reinstallation of gold-as-money. R�pke
was right when he wrote in his book Internationale Ordnung - heute
(International Order and Economic Integration):
Today, when "Humanity is at a Crossroad," as the topic of the conference
characterizes the worldwide political situation, we want to address
academic faculties. We want to know what they can contribute to finding a
way out of this and to prevent an unimaginable escalation of suffering. As
a banker, I implore you to put the gold standard back on the agenda. The
people understand it intuitively. The gold standard would be my guild's aid
to bridle the power frenzy of the mighty.
Paper-ticket-token or funny money is like a drug addiction. It takes more
and more of the drug to satisfy the addiction. Collapse is the final
result. There is no indication today that this experiment with the
equivalent of counterfeit money will end any better than earlier, similar
experiments. Due to the US's economic power, paper-ticket-token money has
already lasted longer than one might expect.
Allow me to conclude with a quotation from a speech given in Washington
D.C. in 1948 by Congressman Howard Buffett from Nebraska, father of the
most successful investor of all times, Warren Buffett. The address was
entitled "Human Freedom Rests on Gold Redeemable Money":-
"Our finances will never be brought into order until Congress is compelled
to do so. Making our money redeemable in gold will create this compulsion
…. The paper money disease has been a pleasant habit thus far and will not
be dropped voluntarily any more than a dope user will without a struggle
give up narcotics. But in each case the end of the road is not a desirable
prospect …. I can find no evidence to support a hope that our fiat paper
money venture will fare better ultimately than such experiments in other
lands. Because of our economic strength the paper money disease here may
take many years to run its course …. But we can be approaching the critical
stage. When that day arrives our political leaders will probably find that
foreign war and ruthless regimentation is the cunning alternative to
domestic strife. That was the way out for the paper-money economy of
Hitler and others …. I warn you that politicians of both parties will
oppose the restoration of gold …. Also those elements here and abroad who
are getting rich from the continued American inflation will oppose a return
to sound money …. But, unless you are willing to surrender your children
and your country to galloping inflation, war and slavery, then this cause
demands your support. For if human liberty is to survive in America, we
must win the battle to restore honest money…. There is no more important
challenge facing the US than this issue - the restoration of your freedom
to secure gold in exchange for the fruits of your labors."
"Ladies and Gentlemen, these are the subtle relationships between freedom,
money, intellect, war, peace and gold."
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