2ndlook

Mystery of the missing Russian gold

Posted in Business, Current Affairs, European History, Gold Reserves, History, India, politics by Anuraag Sanghi on January 18, 2010

As the Soviet Empire crashed

In November 1991, the head of Gosbank the Central Bank of USSR, Viktor Geraschenko confirmed that USSR had less than 400 tons of gold reserves – and not the 1000-1500 tons as estimated. Russia, which has been one of the world’s Top 10 gold producers for the last 100 years, to have a paltry less than 400 tons of gold as reserves created a flutter in the IMF, World Bank, and the Western world. Where did this ‘estimated’ 1000 ‘extra’ gold go?

The declared gold reserves of Gosbank in mid-1937 were 374.6 tons. No additions were made after that, and the reserves were turned over to the People’s Commisariat of Finance. The size of of the reserve had been kept secret since the late 1930s. Geraschenko wrote to Gorbachev on November 15, 1991: “It was reported in October of this year that the official gold reserves of the country are only 240 tons. The declared level of official gold reserves, which is one of the most important indicators of a country’s solvency, is not commensurate with the status of a superpower and leading gold producer, according to experts. Reports of the size of the USSR gold created confusion among specialist on the gold market, who had previously estimated them to be 1,000-1,300 tons”. (via Collapse of an empire: lessons for modern Russia By Egor Timurovich Gaĭdar, page 238).

A preachy and superior writer about the Soviet implosion

A preachy and superior writer on the Soviet implosion

After Gorbachev’s ‘perestroika’ and ‘glasnost’, as the Russian economy was loosening the grip of the CCCP, the Russian Central Bank set-up an

“offshore firm, Financial Management Co., known as Fimaco, based in Jersey, the Channel Islands, to handle Russia’s foreign currency reserves. By one estimate, the offshore fund managed $37 billion between 1993 and 1998. The firm was a subsidiary of Eurobank of Paris, which is 78 percent owned by the Central Bank.”

The Washington Post revealed in another report how Russia,

funneled billions of dollars in Russia’s hard currency reserves through… Fimaco … Documents disclosed by The Washington Post showed that some of the money was then pumped back into Russia’s high-flying government bond market in 1996, in the months before President Boris Yeltsin’s reelection.

One of the few journals to get this story right was Businessweek – based ‘on-the-ground’ whispers.

Managing the Russian Central Bank during the mayhem

Described by Jeffery Sachs, repeated many times by Western bankers, as “the worst banker in the world”, Viktor Gerashchenko was chairman of the Russian Central Bank. Twice: the first time from 1992 to 1994, and the second time was after the default crisis of 1998 – upto 2002; resigning after “expressing opposition to proposed legislation that aimed to make the Central Bank subordinate to a new government led body, The National Banking Council.”

Without any conspiracy theories

For Russia, as one of the Top 10 producers of gold, to have 1000-1500 tons of gold would not be excessive. But between 1971, after the Nixon Chop, in little time, dollar value depreciated from US$35 per ounce of gold to US$800 in 1980. Over the next 20 years, through various clandestine methods (check out the Edmond Safra and the Yamashita stories below), gold prices were ‘managed’ and brought down to US$225 per ounce. Co-incidentally, along with oil prices. This reduction in gold and oil prices simultaneously, severely undermined the health of USSR’s economy – these two being the most valuable ‘hard currency’ exports from USSR.

A simple explanation may be that the central bankers of the erstwhile USSR used a lot of that gold to ‘support’ alliances. Much in the manner of the USA, which does the same with its USCAP system. To this add the possibility that Soviet apparatchiks did not want to divvy up Soviet gold with members of the CIS and the subsequent splinter countries of the USSR, or lose it to ‘impatient’ and ‘opportunistic’ Western creditors.

This ‘unexplained’ reduction in gold reserves, was done according to Gosbank head, Gerashchenko, to “to avoid the seizure of assets during talks with foreign governments and private creditors on the restructuring of Moscow’s Soviet-era debts.” Russian authorities also “questioned the $50 billion figure reported by Skuratov. They said $1.4 billion was the most FIMACO ever managed at one time, in 1994”. After his stint at Gosbank, Geraschenko became chairman of the Yukos board. Yukos is the company that belonged to the jailed billionaire, Mikhail B. Khodorkovsky.

 La Leopolda  at Villefranche sur Mer, France, the former home of King Leopold, Gianni Agnelli and Edmond Safra.

La Leopolda at Villefranche sur Mer, France, the former home of King Leopold, Gianni Agnelli and Edmond Safra.

Death Of Edmond Safra

Friday. December 3rd, 1999. TV channels (in India too) announced that Edmond Safra died in mysterious circumstances – at his villa in Monaco.

Based out of Monaco, a known off shore finance centre, Edmond Safra was reputed to have been in the know and arranged numerous gold dealings. His claim to fame was to ‘arrange’ the evacuation of Sephardic Jews, with their wealth from various West-Asian and Middle East countries between the 1920-1960s. He was ‘whispered’ to be behind the George Soros run-in with the Bank Of England gold sale and physical delivery.

The US FBI was conducting investigations about money laundering through Safra’s bank by the Russian ‘mafiya’, based on information given by Edmond Safra. Behind many of these money transfer and manipulation operations through Safra’s Bank, was the Russian ‘mafiya’ – and lubricating these transactions, were hundreds of tons of Russian-Soviet gold. Sold through Edmond Safra? Was it this investigation or a ‘double-cross’, that triggered Safra’s killing?

At the time of Edmond Safra’s death, he was negotiating the sale of his bank to The Hong Kong & Shanghai Banking Corporation.

Yamashita Gold – Underground gold from Japan

Korea claims that Japan plundered Korea of hundreds of tons of gold from 1937-1944. Philipines, Indonesia have all raised claims against Japan for war time gold loot.

Regardless, one American writer had definitely hit a jackpotGold Warriors: America’s Secret Recovery of Yamashita’s Gold (By Sterling Seagrave, Peggy Seagrave). Ian Fleming is supposed to have based his story on the Yamashita chapter of WW2.

Japan’s top underworld crime boss, Taisho (Admiral) Yoshio Kodama, (ranked as an admiral at 34 years) a major figure in the Japanese underworld was in charge of Project “Golden Lilly” – after one of Hirohito’s poems! Objective – looting gangsters in Japanese occupied territories. Supervising the operations was Emperor’s Hirohito’s brother, Prince Chicubi. Management – Japan’s top financial figures.

Central Bank - Gold Sales
Central Bank – Gold Sales

Subsequently, allegedly, a lot of this gold landed with Ferdinand Marcos; the Filipino dictator. Swiss banks, Macao criminals, American generals and politicians – all involved.

Glen Yeadon, writer of “The Nazi Hydra in America: Suppressed History of a Century” writes how Presscott Bush (grand-father of George Bush), Douglas MacArthur were involved in various launderings, diversions and subterfuge involving Nazi gold and Japanese gold after WW2.

After the Japanese surrender, Tomoyuki Yamashita, was tried by a kangaroo court, convicted of vague crimes and hung to death – which added to the rumours of Yamashita’s gold.

Recovery of Boticelli’s Venus

Sandro Botticelli’s Venus Rising, a ‘priceless’ renaissance period painting, now in the Ufizzi gallery, stolen and hidden, was ‘discovered’ by Indian soldiers, during WWII. This ‘discovery’ of Botticelli’s Venus was a highlight of the mopping up operations – and the role of the Indians soldiers has been wiped clean. No book review of a hagiographic account, The Venus Fixers: The Remarkable Story of the Allied Soldiers Who Saved Italy’s Art During World War II By Ilaria Dagnini Brey mentions this contribution by Indian soldiers. I wonder what would have happened if ‘others’ had found this painting. Blame the Nazis for the loot! The painting would never have been recovered, I presume!

Central Bank Gold Sales

Between 1999-2009, European Central Banks have sold more than 4000 tons of gold under the Central Bank Gold Agreement (CBGA).

Switzerland, which had held the most gold reserves per capita in Europe in 1999, has sold more than 1,300 tons of its gold reserves. Other major sellers in the past 10 years included France, the Netherlands, and the U.K.

Countries like France, where monetary policy is now set by the European Central Bank, still maintains its own central bank. The U.S. hasn’t sold gold.

In the past, abrupt selling has sometimes depressed gold prices. The Bank of England’s announcement in early 1999 that it was selling part of its reserves helped gold prices slump to a 20-year low. Gold traded at just above $250 an ounce by the summer of that year.

But efforts to coordinate those sales have reduced those shocks. On Sept. 26, 1999, 15 European central banks, led by the ECB, signed the first CBGA to take concerted moves on gold sales.

The banks agreed that in a five-year period, they will cap their total gold sales at around 400 tons a year, with sales in five years not exceeding 2,000 tons. The CBGA was renewed in 2004 for another five-year period. The second CBGA raised annual ceiling to 500 tons and the five-year limit to 2,500 tons.

The interesting bit was where did the European Central Banks get so much gold from! Was it the various gold hoards, that had disappeared from 1900-200o, making a re-appearance!

For long, these calls for accountability from ‘conspiracy theorists’ have been ignored. The good news. These ‘conspiracy theorists’ have not been able to locate any more of such extra sources of gold, which may disturb the market in the next few years.

Sovereign Gold – How Safe Is Indian Gold …

Posted in Gold Reserves, History, politics by Anuraag Sanghi on November 15, 2007

How safe are the world’s largest reserves of gold?

India, with the largest (private and government) reserves of gold in world, needs to examine the safety question. While, there have been many advocates and supporters for many European claims, I am yet to see any support for reclaim of any of loot from weaker nations by some of the temporarily dominant powers.

In spite of close cultural and economic relations, WW2 was started by countries of Western world for gold, oil and access to markets. With excess of printing capacity, any country in world can print notes. During any period of turmoil, what matters is gold. After all, even India with the largest gold reserves in the world, needed to pledge gold in 1991 for small loan from IMF and World Bank.

Is our gold safe? Look at the experience of some of these countries.

(L-R) Prime Minister Ramsay MacDonald of Great Britain and Governor of The Bank of England Montague Norman attending diplomatic reception at Austrian Legation. 1932, Photographer - Erich Salomon

(L-R) Prime Minister Ramsay MacDonald of Great Britain and Governor of The Bank of England Montague Norman attending diplomatic reception at Austrian Legation. 1932, Photographer - Erich Salomon

Belgian Gold

Anticipating German invasion of the Netherlands, the National Bank of Belgium moved some part of its gold reserves to Bank of France, for safe keeping. However, after France itself came under attack, Belgium instructed the French to transfer Belgian gold to London.

The French instead, moved that gold to Dakar, Africa, to a French bank. After the fall of France, Pierre Laval, Foreign Minister in the French Vichy government of Marshal Petain, handed over the gold to Hitler’s Germany – which reportedly, recast this gold, put pre-war stampings and sold it to the Swiss. What happened after that. Well, the Belgians lost it all, I presume.

British Experience

Britain itself found that the they could buy anything only with gold. A staunch ally like the USA, demanded payments in gold. Britain sold the Viscose Company, receiving a paltry amount. British investments in Canada were disposed to pay US for for raw materials.

A significant part of British gold reserves, were safely moved to Canada on board the battleship Revenge and HMS Emerald to the vaults of Bank Of Canada (which still acknowledges the British crown) banks. American warship, Louisville was sent to Simonstown South Africa to take delivery of British gold.

Czech Gold Diversion

After Hitler’s invasion of Czechoslovakia, under the British-Czech treaty, Britain was enjoined to join the war on the Czech side. Instead, Montagu Norman, the head of Bank Of England, under a technicality, handed over Czech Gold to the Germans – in spite of the British Parliamentary restrictions; a supposedly secret transaction, blown open by a connected reporter.

After many enquiries, investigations, Montagu Norman, (yes, the same racist who collaborated with Churchill to loot the Indian peasantry) was let off without even a rap on his knuckles. After the war, Montagu Norman set up an institute to do research (like Joseph Mengele) in eugenics. His former boss, another racist, Churchill, set his armies on the Mau Mau, fighting for Kenya’s independence, and hundreds of thousands black Kenyans disappeared. Did the Czechs get their gold back? I doubt!

Central BanksPortugal, Spain

From the 1980s, it became fashionable to hedge, trade, create derivatives, get into junk bonds. And the King Of Junk was Michael Milliken. His company Drexel, Burnham and Lambert.

A subsidiary of Drexel, Burnham and Lambert, used borrowed gold from Central Bank of Philippines, Pitcairn Island, Poland, Portugal, Puerto Rico – all lost money. Further investigations show that more central banks lost more money – which were finally shown as “gold sales” by many European banks – and there this where things get murky.

Death Of Edmond Safra

Friday. December 3rd, 1999. TV channels (in India too) announced that Edmond Safra died in mysterious circumstances. Based out of Monaco, a known off shore finance centre, he is believed to have been in the know and arranged numerous gold dealings. He was supposed to be behind the George Soros run-in with the Bank Of England gold sale and physical delivery.

At the time of his death, he was negotiating the sale of his bank to The Hong Kong & Shanghai Banking Corporation – set up with opium earnings by Jardine Matheson and David Sassoon and sundry others.

This time the conspiracy is supposed to have been hundreds of tons of Russian-Soviet gold (looted from Tsars?) and never returned to Soviet Russia – and now sold through Edmond Safra.

French Pragmatism

Before, during and after WW2, large numbers of national and private treasures were looted, misappropriated and generally fell into disputes. The French Government had a similar experience .

Secret of Japan‘s rise

Year 1542. The Sado gold mines were discovered. In 16th-17th century, Japan became the second largest producer of gold in the world. Rapid rise of Japan after that and the rest of story is known to the world.

Korea claims that Japan plundered Korea of hundreds of tons of gold from 1937-1944. Philipines, Indonesia have all raised claims against Japan for war time gold loot.

Regardless, one American writer had definitely hit a jackpotGold Warriors: America’s Secret Recovery of Yamashita’s Gold (By Sterling Seagrave, Peggy Seagrave). Ian Fleming is supposed to have based his story on the Yamashita chapter of WW2.

Japan’s top underworld crime boss, Taisho (Admiral) Yoshio Kodama, (ranked as an admiral at 34 years) a major figure in the Japanese underworld was in charge of Project “Golden Lilly” – after one of Hirohito’s poems! Objective – looting gangsters in Japanese occupied territories. Supervising the operations was Emperor’s Hirohito’s brother, Prince Chicubi. Management – Japan’s top financial figures.

Subsequently, allegedly, a lot of this gold landed with Ferdinand Marcos; the Filipino dictator. Swiss banks, Macao criminals, American generals and politicians – all involved.

Glen Yeadon, writer of “The Nazi Hydra in America: Suppressed History of a Century” writes how Presscott Bush (grand-father of George Bush), Douglas MacArthur were involved in various launderings, diversions and subterfuge involving Nazi gold and Japanese gold after WW2.

The Melmer Account

After WW2, and fall of Germany, at the Mercker mines, occupying armies found Nazi treasures.

And details of a bank account.

Vladimr Lenin and Joseph Stalin

Vladimr Lenin and Joseph Stalin

The bank account held in the name of Bruno Melmer, a SS captain. Further investigations revealed that this account received various looted material of the German Army – and gold recovered from Jews killed in concentration camps. After due investigations these files were returned to the the concerned German bank. In 1975, a journalist Peter Bild discovered that all these files had disappeared.

So had the gold.

Spain and Gold

For nearly 10 years, the Spanish Civil War raged – a proxy war between the Germans and Russians. The target, Spanish gold. In the see-saw of the civil war, entire Spanish gold disappeared – between the maws of the French and the Russians. Reputedly, Stalin boasted that Spain will never see their gold again.

I am sure the ghost of Incas were at peace after 400 years.

Hitler-Pavelic meeting

Hitler-Pavelic meeting

Ustashi Gold

During WW2, after Hitler’s sweep across the Balkans, a Nazi puppet government of Ante (Anton) Pavelic, headed the “Catholic State of Croatia.” Archbishop A. Stepanic established a Croat Separatist Movement and seized power with Ante Pavelic. The Pavelic regime supported “Clerical Fascism” – a mix of Catholic religion, Anti-Semitism and authoritarian politics. Mussolini’s Italy and Nazi Germany’s “Ausland” department assisted Ante Pavelic and his Catholic terrorists to set up a dictatorship. Ante Pavelic was declared Poglavnik – or what we better know as Fuhrer.

Under the Ustashi, a reign of terror descended upon Jews, Gypsies and political dissidents. The Ustashi extorted a fortune in gold and other valuables from Jews and Gypsies and thereafter shipped them to work in concentration camps. The Jews have a well-organised lobby, an organisation and a nation which has pursued banks, criminals, countries for recovery of their property.

What happened to the Roma Gypsies (claim they are of Indian descent). Nothing. Sweet nothing at all.

Quantity Of Gold – 2400 kgs atleast.

The Final Accounting

Nazi gold was found by various armies and individuals all over Europe. In Lake Toplitz and in the Thuringien salt mines. Finally,a coordinating agency was set up by Americans for gold recovered by American Armies to account, re-distribute and reconcile claims. The European banking system, especially the Swiss and the Vatican have been subject to various claims, allegations and conspiracy theories.

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