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From Frank Holmes at Frank Talk:
Although not directly addressed in [the World War II movie] Darkest Hour, the U.K. ended up evacuating billions of dollars’ worth of gold bullion and other assets across the Atlantic, all to be kept safely in Canada. The mission, codenamed “Operation Fish,” is still the largest movement of physical wealth in history.
Germany’s Economic Straits
So why was Hitler so interested in acquiring gold?
To answer that, we really need to go back to the 1920s. At the time, Germany was in serious economic straits. It faced unprecedented hyperinflation, among the very worst such incidents in world history.
This was clearly a problem for Hitler, who, soon after being appointed Reich Chancellor in 1933, set in motion the remilitarization of Germany, in direct violation of the Treaty of Versailles. Because the Western European country is not particularly resource-rich—the one exception is coal—everything from aluminum to zinc would have to be imported to manufacture the guns, tanks, ships, and warplanes needed to wage an extended conflict in the age of advanced machines.
But this was the Great Depression, which had suffocated the German economy as much as it had the United States’. Unemployment climbed to as high as 30%. In his inaugural address via radio, Hitler vowed to “achieve the great task of reorganizing our nation’s economy” through “a concerted and all-embarking attack against unemployment.”
Much like Roosevelt’s New Deal in the U.S., Hitler’s government tackled unemployment by dipping into deficit spending. It financed great public works projects such as the autobahn, railroad, housing and more.
The plan worked. Within four years, just as promised, unemployment was virtually thwarted. It’s been said that, had Hitler stopped in 1936 or 1937, he might today be remembered as one of the 20th century’s most admired leaders.
However, Hitler assumed a much more aggressive stance toward national rearmament in an effort to reclaim lost dignity—the Treaty of Versailles be damned. What stood in his way was not only his country’s lack of natural resources but also the fact that many supplier nations would not accept Germany’s worthless currency. They insisted instead to be paid in their own currency; some other international, convertible currency such as Swiss francs or U.S. dollars; or hard currency.
How then would Germany pay for Sweden’s iron ore? Romania’s oil? Turkey’s chromium? Portugal’s tungsten and Spain’s manganese?
In Gold We Trust
Before we continue, I want to make it clear that Hitler had no respect for the yellow metal, any more than he had for human life. Gold as a currency is built on trust, of which Hitler had none. He hated the metal and all it stands for—but he needed it to push forward his rearmament strategy.
Walther Funk, the Reich’s minister of economics and president of the country’s central Reichsbank, echoed this resentfulness at having to rely on gold:
“As far as currency is concerned, gold is unimportant to us,” Funk said in 1940. “We don’t need it as backing for a currency—which is being managed by price, volume, and wage control—but only to pay clearing balances.”
In other words: We have absolutely no need for gold—until we need it.
But here another problem emerged: Just as it had few natural resources of its own, Germany laid claim to a relatively small gold reserve. In 1933, the Reich’s official holdings stood at only $109 million—not nearly enough to finance the kind of force Hitler envisioned.
The Greatest Gold Heist in History
So began the Reich’s looting of Europe’s gold reserves, beginning with Austria’s in 1938. At the time, Germany’s coffers were nearly empty. The infusion of Austria’s 90 to 100 metric tons of hard currency gave Hitler the boost he needed to continue his plundering.
Today we remember the Nazi’s gold heist as “one of the greatest thefts by a government in history,” in the words of Ambassador and Undersecretary of Commerce Stuart E. Eizenstat, spoken during his 1997 hearing on the status of Holocaust assets. Although estimates vary, and although the gold price fluctuates over time, it’s believed that as much as $600 million—now valued in the billions—were seized from the central banks and vaults of neighboring, occupied countries, including Austria, Poland, Belgium, Holland and the Netherlands. Millions more in silver, platinum, diamonds, artwork and other assets were stolen as well.