CHAPTER EIGHT

TRILATERAL HATRED OF GOLD

Trilaterals hate gold because it is a restriction, and an insurmountable restriction, on the fulfillment of their global ambitions. An “elastic” currency controlled by the Federal Reserve System gives power to control the broad direction of the financial structure and the economy. Gold, however, gives sovereignty to individuals and removes them from the center of authority. No totalitarian system can be operated on gold: both Hitler and Stalin are proof of this point. Similarly, Trilaterals need to remove gold from the world monetary system before their globalist ambitions can be achieved.

Triangle Paper 1, Towards a Renovated World Monetary System, contains the blueprint for world monetary arrangements. Naturally, gold, the challenge to the world order authority, is treated with disdain in the New World Order central bank; and it is proposed that. Reserves will be held only as Bancor, an artificial “goldless” money, . National currencies will not be counted in reserves, and . Gold will have no role at all in the new international money system.

The Trilateral Commission has its hands squarely on the U.S. gold policy faucet: any decision to sell U.S. official gold reserves will be made by Commissioner W. Michael Blumenthal (secretary of the treasury) and Anthony Solomon (under secretary of the treasury for monetary affairs). However, Triangle Paper 1 also reflects enough realism to agree that this goldless artificial money world is “some time away.”

The authors, therefore, propose certain market actions to reduce the international monetary role of gold. “We believe in action consonant with our long-run objectives and at the same time advancing the interim aim of calming markets would be the coordinated and joint sale of official gold into private markets.” l

The stated intent in Paper 1 is to depress the price of gold “greatly” and “interject much uncertainty into the market place.” An earlier Trilateral proposal to use gold sales to raise funds for the LDCs has already been adopted, and Trilaterals have the political clout in IMF and the treasury to carry out such policies in the immediate future. For example, a recent letter (dated 19 July 1978) from assistant secretary for legislative affairs at the treasury to Congressman J. Kenneth Robinson even went so far as to reject the national security role of the U.S. gold reserves:

The Treasury program of monthly public sales of gold does not affect the ability of the United States to meet strategic or domestic gold mines which exceeds that required for defense-related uses. Moreover, our existing stocks are extremely large in relation to such uses for the foreseeable future. Gold is not an important medium of payment, and the relatively small amounts which might be useful in unusual circumstances can readily be provided. We have seen no practical need, therefore, to regard any specific portion of our stocks as a contingency reserve.

 

Trilateral gold policy reveals a long-run intent to impose a world dictatorship through control of money but also an uncomfortable awareness that gold is a fundamental challenge to these objectives. In contrast to this wariness, the Trilateral gold proposals will not solve their problem. The war on gold is age old. It didn’t start with current New World Order dreams. No political power has ever defeated gold because it is portable sovereignty. Those individuals who dislike or distrust Trilateral intentions will simply buy and hold onto gold. Gold is their lifeline to a sane world, and it will be the Achilles’ heel of the Trilaterals.

What the Trilaterals do not understand is the vital necessity of gold for any nation. Maybe the Trilaterals dream of a goldless one-world dictatorship, but they need gold to attain this dream. History is replete with instances of the usefulness of gold. The U.S. financed and won World Wars I and II with gold. In 1941 we had almost two-thirds of the world’s gold stock and a national debt of only $40 billion, short term obligations to foreigners of only $3 to 4 billion, a favorable balance of payments, and a money supply of only $42 billion covered by $24 billion in gold, a ratio better than 1:2.

In 1943, when it looked as if Rommel were defeating our forces at Kasserine Pass, General Mark Clark had to pay for military supplies in gold: suppliers would not accept paper dollars. The same happened in the Pacific following defeat at Pear I Harbor. French monetary expert, Jacques Rueff, de Gaulle’s financial adviser stated: “I am not sure that your military people, for reasons of national security in case of emergency want to be left with so little gold.” 2

Proponents of a goldless world speculate that the value of the dollar its purchasing power abroad -depends on a country’s productivity without the gold cover.
 

Under the guidance of academic monetary experts, Trilaterals have been assured that gold can safely be removed from the world monetary system. For instance, Charles Kindleberger, professor of economics at MIT made the following statement to Congress in 1968:

My inclination is to stabilize the ratio of gold to dollars as long as our gold stocks hold out -and I predict that this will be a very long time -and then to move, not to gold, but to dollars as an international medium of exchange, as it now is, and store of value, as it is in part -dollars managed by an internationally determined monetary policy, to be sure, but dollars.

An analogy between language and money suggests that the dollar is the equivalent of English, which is the world’s lingua franca for communication, especially in business and science; the French proposal to return to gold is like trying to restore
the world to the use of Latin, the language of world intellectuals in the Middle Ages. 3

This statement is ridiculous in the face of history. No fiat currency has ever survived. Yet in spite of history, the Trilateral commissioners have a concerted action plan to implement a sell-gold policy.

Commissioner John H. Perkins (chairman of the Continental Illinois Bank and Trust Company) has discontinued sales of all gold coins at his bank (Krugerrands, Mexican pesos, and Austrian coronas), reportedly because gold coin sales weren’t producing profit for the bank. More likely, however, the move was in line with overall Trilateral objectives. Paradoxically, Perkins wrote in Trialogue (Spring 1976) that “it will be little benefit to anyone if there is a repetition of the policies which led to the devastating world wide inflation and subsequent recession experienced during the first half of the 1970s.” 4

In another action, Commissioner Harold Brown (secretary of defense) has ordered the Department of Defense (DOD) to dispose of the emergency store of 15,000 gold sovereigns and gold napoleons used in the “escape kits” carried by air crew members over hostile territory. From now on, USAF crew members crash landing in enemy territory will presumably offer paper dollars or computer blip Special Drawing Rights (SDRs) to hostile inhabitants.

Commissioner Blumenthal has blocked the effort of the President’s Commission on Olympic Sports to mint a gold commemorative coin or medal. The committee estimates a gold coin would generate $300 to 500 million for the Olympics. Unknown to the committee, its gold program is unwelcome to the Trilaterals -it would put gold in the hands of individuals.
 

Moreover, a bill to strike gold medallions from the U.S. gold stock (SB 2843) introduced by Senator Jesse Helms has come under bitter attack from Blumenthal and the treasury. Blumenthal has stated publicly that he fears the medallion will be used as a coin:

I do not believe it is in the public interest for the U.S. Government to take an action which would encourage our citizens to use gold as a substitute for U.S. legal tender as a medium of exchange; moreover, the issuance of such gold medallions could lead those who favor the return to a gold-based domestic monetary system to seek to make such medallions legal tender as the next step in a continuing process to restore the monetary role of gold. 5

This statement flies in the face of history: people, not governments, decide ultimately what will be used as a means of exchange.

But, the Trilateralists are skating on thin ice in attacking gold; to attack from strength, they need gold in the vaults. Perhaps Trilaterals actually believe that the United States has the world’s largest above-ground gold stock. Not only Establishment media but well informed foreign sources assume that the U.S. has $11.5 billion of good delivery gold in Fort Knox which, if placed on the market, would collapse the price. 6

We know Trilaterals want to sell gold and that W. Michael Blumenthal and Anthony Solomon will make the decision to sell gold. The question is, Does the U.S. really have the gold to sell?

Although the official gold reserve statistics are recorded as “Gold stock -$11.719 (billions),” the United States doesn’t have that much good delivery gold in the vaults. We assume that the “gold” referred to in official statistics is good delivery bullion, valued at the “official price” of $42.22 an ounce, as established on 21 September 1973. This is not so. The bulk of U.S. gold reserves consist of unmarketable gold alloy of .85 fineness and less, not good delivery bullion of .995 fineness and above in 400 ounce bars.

The official published statistics are grossly misleading. The latest unpublished U.S. Treasury inventory of “good delivery gold bars,” the quality called for in world markets, is as follows (as of 1 November 1977, compared to 1973 to indicate changes):

NOTE: At the “official” price of $42.22 per ounce, the U.S. gold stocks should be recorded as: 48,333, 145 fine ounces times $42.22 equals $2,040,625,381, or roughly $2 billion, compared to the official published figure of $11.5 billion), assuming this gold is in the vaults. No physical inventory has been taken. While there were audits of the seals in 1953 and 1976, audits of seals are not inventories of gold bars. Readers interested in the possibility of “missing gold” should send a self addressed business size envelope (with 24 cents U.S. postage) to Edward Durell, P.O. Box 586-PW, Berryville, VA 22611 for further information.

The balance of the gold stock is “gold alloy” of .85 fineness or less, mostly coin melt (i.e., the coins seized for FDR in 1933). It cannot be sold as good delivery.

Compare this 48 million ounces of good delivery gold to the European stocks:

Why not melt the large treasury stock of gold alloy and recast into good delivery bars? To a very limited extent, the treasury has done just this. Comparison of the U.S. Bureau of the Mint inventory of gold bars between November 1973 and November 1977 shows that the mint has re-melted its stock of “Hershey bars” (i.e., end-of-melt pourings) of good delivery fineness into good delivery weights. In the earlier 1973 inventory list, the mint showed numerous bars with weights less than 400 ounces (Le., 5-, 10-, 15-,20-,25-,30-,50-, and 250-ounce bars) not acceptable in the international market.

By 1977 many of these bars had been re-melted. The 1977 inventory discloses no bars with weights of 15, 20, 30, and 250 ounces, a marked reduction in bars with weights of 5, 10, 25, and 50 ounces, and an increase of 1,665 bars of 400 ounces good delivery weight. The total inventory of good delivery gold is a little less -a reduction of 144,175 ounces to 48,333,145 ounces (compared to 48,477,320 ounces in 1973). A significant change is 280 additional bars of 1,000 ounce weight.

The question remains, what can the mint do with the coin melt bars? Considering that the U.S. has a total gold refining capacity of about 2 million ounces per year, it would take seventy-five years to convert the 150 million or so ounces of coin melt. Although up-to-date statistics on world gold refining capacity do not exist, it would surely take many years to refine 150 million ounces of gold. Moreover, the treasury has protested about the unacceptable work burden of just counting the bars for a complete physical inventory. Finally, a re-melt program would raise some awkward public questions, such as what happened to the original $24 billion of the U.S. gold stocks?

Of course, the United States could always revalue its good delivery gold at the market price giving us 48,333,145 ounces times $176.00 (7 February 1978) equals $8,506,633,520. But, this is an impossible approach for Trilaterals, as it would mean abandoning the “gold is dead” theme. It is critical for the U.S. Treasury to maintain the statistical fiction of $11.5 billion of good delivery bullion in reserve because when the time comes to sell U.S. gold against a rising gold price, the treasury wants to create the picture of a vast supply overhang crashing down into the market place. This supply overhang simply does not exist: $2 billion of good delivery gold of .995 fineness is far, far less than is needed, even for a bare minimum strategic reserve.

Now you see why in March 1965 Congress removed the requirement that Federal Reserve Banks keep a 25 percent reserve in gold certificates against members’ deposits, and why on 18 March 1968, they removed the 35 percent reserve requirement against Federal Reserve notes; and why on 15 August 1973 the U.S. closed the gold window and suspended convertibility. And remember this removal of the gold cover was done over the vehement protest of organizations such as the Independent Bankers Association of America, which warned:

The lesson of history clearly reminds us that no nation has been able to survive the deliberate removal of the gold backing from its currency. The likelihood is that if this universally recognized basis were eliminated, gold would rapidly flow out of this country.

The Association fears that depriving the United States currency of its gold backing would do irreparable harm to the nation’s economy in the years ahead.

On April 5, 1933, Franklin D. Roosevelt, who had entered the White House only a few days before, issued an executive order requiring American citizens to surrender gold coins, gold bullion, and gold certificates to the nearest Federal Reserve Bank. The treasury offered to pay any cost of transportation, and it is interesting to note the gold was ordered to the nearest Federal Reserve Bank, a private organization, not to the nearest United States mint or depository.

Later in 1933, the Federal Reserve System turned over the surrendered gold to United States mints. In exchange, the Fed received Series 1934 gold certificates each with a nominal value of $100,000, and issued only to the Federal Reserve System by the U.S. Treasury. Most appropriately, these non-circulating notes bear the face of Woodrow Wilson, who signed the Federal Reserve Act into law a few days before Christmas in 1913.

Series 1934 gold certificates are in effect a claim on seized citizens’ gold by a private money monopoly which we know as the Federal Reserve System. The certificates bear the following statement on the obverse:

“This is to certify that there is on deposit in the Treasury of the United States one hundred thousand dollars in gold payable to bearer on demand as authorized by law.”

This seizure precedent must be viewed in light of a highly significant statistic: how much of the circulating gold coin was surrendered in response to the executive order? Only 49 percent of gold coins in circulation were actually surrendered, the balance of the $287 million of gold coins were kept under mattresses and buried in backyards. This unaccounted-for balance has been written off, or as Milton Friedman puts it, “the $287 million was retained illegally in private hands.”

For a year the federal government huffed and puffed and threatened to sue these Americans who had decided to keep their own coins. Only one lawsuit was ever filed and that one objection was by an angry citizen against the federal government to protest seizure of his gold. The seized gold coins, Double Eagles and Liberty’s, irreplaceable segments of America’s artistic heritage, were melted down by the mint to plain gold alloy bars and today form part of the bulk of our gold reserves.
Gold owners of 1978 area different breed from those of 1933. There is no likelihood that 49 percent, 15 percent, or even 5 percent of the citizenry would turn over 1978 gold holdings, and this is evidenced by the rapidly growing markets for concealment devices, (safes and vaults).

A Trilateral ban on gold imports is much more likely than another attempted seizure of citizens’ gold. The excuse for the ban could be a balance of payments crisis, an energy crisis, or one of several other created crisis scenarios: the real unstated reason will be elitist fear of a mass dumping of nonconvertible paper dollars into gold. Thus the timing of any future gold ban is much more likely to be determined by a monetary crisis than by an energy or balance of payments crisis.
A gold import ban would of course generate a temporary premium on gold bullion and coins, as was the case in France and England.

However, if we follow historical precedent, the premium will decline as new gold supplies are smuggled across the Mexican and Canadian borders and lengthy shorelines, all relatively unguarded.

A ban on gold imports will be required at some point to fulfill Trilateral monetary objectives, and the risk of public alienation will be weighed against the long-run objectives. Historically speaking, the Trilaterals will find that gold bans serve only to create more anti-Establishment groups.

ENDNOTES: CHAPTER EIGHT

1. “Towards a Renovated World Monetary system,” Triangle Paper No.1, p.30.
2. Jacques Rueff, The Monetary Sin of the West (New York: Macmillan Co., 1972), p. 72.
3. “Removal of Gold Cover,” (Statement to Congress, 1978), p. 171.
4. “Looking Forward,” Trialogue (Spring 1976), p. 3.
5. See for example, The Economist. (London), 4 -10 February 1978, p. 113/4. 6. Today these certificates are recorded on the Federal Reserve “Statement of Condition” as assets. (See, for example, FRS H. 4) (a) 19 January 1978, p. 2. Gold Certificate Account $11.719 million dollars.

Back to Contents

CHAPTER NINE

TRILATERAL PAPER MONEY SCHEMES

Trilaterals by their own words are interested in political power: all objectives are subordinate to the political power needed to order the world as the Trilateralists see fit. So you will not find rational consideration of alternatives, or the weighing of options in Trilateral dogma. You can, however, expect an irrational drive, come what may, to control the world in the name of globalism and New World Order.

Therefore, you must hold a key fundamental proposition in mind:

Trilaterals are not interested in what monetary system works best, or most equitably, or whether gold is a more effective monetary device than paper, or what monetary system will support a higher standard of living for the world’s poor. The overriding drive for Trilaterals is to manage the world economy, manage being a euphemism for control. This control is exercised through so called coordination of macroeconomic policy, in spite of the dismal results from attempted macroeconomic direction. It is argued that the prime desideratum for this control device is to keep world peace. Nowhere is there any recognition of the historical fact that such control has always led to conflict: that denying national and ethnic independence is a sure road to strife and bloodshed.

Triangle Paper 14, Towards a Renovated International System, concludes that the 1944 Bretton Woods system has already “come under increasing strain,” and events have forced traumatic changes, that is, the periodic assault on the dollar and floating exchange rates. The current Trilateral objective is to build an international system, a world order based on cooperation and focusing on two aspects which require such cooperation:

. International lending
. The creation of international reserves.

he Trilateral proposal is to involve five to ten leading core countries in establishing the new system. The rest of the world will have to go along as best it can. Some ideas to this end have already been implemented: for example, a new, man-made artificial international money, the Special Drawing Rights (SDRS) has been created for central banks. As the SDR is introduced, gold will (supposedly) be phased out of the international reserve system.

The task ahead for the Trilateral Commission world managers is to integrate these ideas into the world monetary system and make them work. The immediate and most compelling task is to operate the floating rate system to dampen erratic movements in exchange rates, which are, of course, damaging to international trade. Such erratic movements do not occur in fixed rates tied to gold. However, gold moves the world away from the “cooperative” international arrangements needed by Trilaterals, and gold, therefore, is a bigger problem than floating rate disorder. Following this is the task of world reserve management. The Trilaterals want “wider cooperation since the key to world reserve management is restraint in the additions to central bank holdings of gold and of course currencies such as the U.S. Dollar, the German Mark, the British Pound and the French Franc.” 1

The sinking dollar is also a problem, and an unforeseen one, particularly as it inevitably leads to lesser use of dollars as a world reserve unit. Trilaterals with their vague views on gold were not able to foresee that the 1971 suspension of gold convertibility would be a millstone around the neck of the dollar and “international cooperation.” The following diagram illustrates far better than words the decline in value of the fiat dollar in relation to both gold and currencies tied to gold and thus the decline in the ability of Trilaterals to create a workable fiat reserve dollar world system.

The out-of-date views on gold held by the U.S. Treasury, under Trilateral control, are well exemplified by a recent letter from Gene E. Godley, assistant secretary for legislative affairs at the treasury to Congressman J. Kenneth Robinson -a letter which incidentally illustrates clearly why the treasury has been able to lose billions of dollars for the U.S. taxpayer.

There is, moreover, a high degree of uncertainty about the usefulness of gold as money. Its monetary role has greatly diminished in recent years, and its market price has varied widely. Thus, our gold stocks no longer represent an assured source of financing for our imports.

The U.S. Treasury and Trilaterals would do well to ponder the above chart, and the nonsense it makes of official anti-gold statements. Using 1971 as a base of 100, all fiat currencies have declined in value compared to gold, and the U.S. dollar has declined the most (except for the pound sterling). The Swiss franc and other currencies tied to gold have declined least. The treasury, under Trilateralist direction, has assumed facts directly contrary to the chart.

Trilaterals do recognize that as long as countries build reserves with national currencies and gold, then the SDR and global fiat systems will take second place. The IMF is the vehicle to achieve the twin objectives, and the IMF is supposed to evolve into a “central bank for national central banks.” At the moment, the IMF does not have the reserve resources for this: the Trilaterals propose to artificially create the necessary reserves out of thin air. The IMF is also supposedly the forum for “coordination of macroeconomic policies.”

How are our Trilateral friends faring with their plans? To answer this, we have to go back to Bretton Woods and the Keynes-White schemes for Bancor and Unitas. After we identify the differences in these schemes and why Bretton Woods failed, we can assess the road ahead for the Trilaterals.

JOHN MAYNARD KEYNES AND HARRY DEXTER WHITE IN 1944

Keynes was not the originator of the 1944 Bancor scheme, nor are the Trilaterals the originators of the 1978 Bancor scheme, their global monetary unit. In 1892 a German economist, Julius Wolf, came up with the idea of an international gold reserve deposited in a neutral country with international bank notes issued on the basis of this gold reserve very much the Keynesian concept reflected in Bretton Woods and the IMF. The major differences between 1978 Trilateral plans and the Anglo-American Keynes-White proposals of 1944 are these:

. Keynes wanted a “consciousness of consent” from the general public; Keynes argued the arrangements would not succeed if hatched in secret.
. The system was to be linked to gold.

Trilaterals have no “consciousness of consent,” and they have abandoned gold: these are critical differences.

The principal objective in 1944 was much narrower than current proposals: the system was to be one of multilateral clearing, a universal currency valid for trade transactions throughout the world. According to Keynes:

It is not necessary in order to attain these ends that we should dispossess gold from its traditional use. It is enough to supplement and regulate the total supply of gold and of the new money taken together. The new money must not be freely convertible into gold, for that would require that gold reserves should be held against it, and we should be back where we were, but there is no reason why the new money should not be purchasable for gold.” 2

When it came to christening this new money, Keynes said, “What shall we call the new money? Bancor? Unitas? Both of them in my opinion are bad names, but we racked our brains without success to find a better.” Even “Bezant” was proposed, interestingly the name of the last international coin (a gold coin) that circulated throughout the then known world for eight hundred years because it was a gold coin and never debased.

Actually the two proposals, Bancor (British) and Unitas (United States), had different features. The adopted American plan, Unitas, deposited part of the U.S. gold reserves with the IMF together with a specific amount of domestic currency but created no international currency. By contrast, the Keynesian plan, Bancor, provided an international currency with overdraft facilities at the clearing union. In other words, today the Trilaterals have taken us back to the Keynesian Bancor plan rejected in 1944.

A comparison of the two monetary schemes clarifies their major differences:

Bancor was not adopted in 1944. It’s now a matter of history that the related Harry Dexter White Unitas plan which was adopted led the U.S. into bankruptcy: the dollar weaknesses of today are directly traceable to the Bretton Woods Unitas plan.

Today’s Trilaterals are political animals, with New World Order objectives, not interested in orderly world trade but in a specific future world structure under their control. The question is not to design a workable system to facilitate trade and improve human welfare, but to design a system that will enhance and preserve power for the Trilaterals. The Trilateral answer is to reinvent the system not used in 1944, the Keynesian Bancor, but modified this time as a universal currency divorced completely from gold and national currencies.

The extent of insider willingness to disregard, and even distort, widely held pro-gold views of others is exemplified by an extraordinary statement in Robert Solomon’s book, which is aptly subtitled An Insider’s View. This is Solomon’s interpretation of the motivation of gold oriented economists:

Those who are worshipful of gold (gold bugs or, more politely, chrysophilites) are usually motivated by one or more of these concerns: particular economic theories now held by a small minority of economists, distrust of government, international political objectives (there is discernible among non-Americans a correlation, far from complete though it is, between attachment to gold and anti-Americanism), and, last but not least, hope of personal pecuniary gain. 3

Each of Solomon’s so-called motivations is in error. It may be that a majority of American economists dislike gold, but certainly not a majority in the world at large. Anti-goldism is an American preoccupation. It is not distrust of government per se that motivates gold holding but distrust of “insiders” who manipulate government for their own ends. Gold holding is not related to anti-Americanism, but it may be related to anti-imperialism, a different aspect altogether.
 

Neither is gold holding related to pecuniary gain: it is related to protection of wealth from marauding insiders.

COOPERATION, COORDINATION OR PIGHEADEDNESS

Trilaterals are failing to achieve the wished-for coordination of macroeconomic policies among the core countries. In early February 1978 these core country finance ministers, vital to the success of the revived and modified Bancor, met in Europe -a supposedly secret meeting that became public knowledge. There is no concealing the cold reception for the Trilateral scheme from Europeans. U.S. Secretary of the Treasury Blumenthal tried to arm-twist Germany into a “locomotive” role; that is, Germany should reflate, spur its economy in good Keynesian fashion, and hopefully, pull lagging economies onto a higher plane of economic activity.

This is presumably the “coordination of macroeconomic policies” planned. The Germans welcomed the Keynesian locomotive no more in February 1978 than in previous years. German Economics Minister Count Otto Lambsdorff commented, I am surprised by American stubbornness,” and Chancellor Helmut Schmidt indicated zero chance of a stimulative (i.e., inflationary) German policy.

This rather crude Trilateral attempt to strong-arm Europe into reflation can be compared to the publicly announced method of achieving cooperation through consultation. To quote Robert Solomon again:

Just as there is a need in each country for economic policies aimed at high employment and price stability, there is a need, at the international level, for a similar effort to make the policies of individual countries compatible with the wellbeing of the world economy. Since there exists no international authority that can directly perform this function, it can be done only by means of consultation and cooperation among representatives of independent nations meeting together in established international form. 4

This European episode and the later creation of the European Currency Unit (ECU) exemplifies the Trilateral weakness in historical precedent. Why did the Germans refuse to go along with Keynesian demand stimulation? Because two factors are locked into the German psyche and ignored by American planners. First, the unparalleled rise of the German economy from the ashes of 1946 was due to plain old laissez faire free enterprise, not artificial Keynesian locomotives.

Second, Germany has had two recent devastating price inflations (1923 and 1946), and both times the Mark went to zero. Germans know the consequences of inflation and Keynesian-type stimulation.

W. Michael Blumenthal was born in Germany and lived in Shanghai until 1947. He must have some remembrances of the postwar Chinese currency inflation and the 1946 collapse of the mark. Unfortunately, Blumenthal was not in Germany during the years of German economic revival.

In sum, a combination of factors -German refusal to adopt Keynesian stimulation, the French political scene, and the collapse in the leading indicators (signaling a depression in 1979) -has reduced international cooperation and coordination.
One can perceive in the background a central reason why the Trilaterals, essentially the big New York banking powers, must move ahead with Bancor...why they must develop the so-called Witteveen facility...why they must create elastic international reserves, to be expanded at the push of a computer key.

The central unstated propellant for global fiat money is that the international monetary system is on a precarious merry-go-round: borrow -generate a deficit -be unable to repay -reschedule -borrow some more. The world debt balloon must be kept inflated. If the balloon goes bust, so do the New York banks (remember Chase receives 78 percent of its earnings from abroad). If one of the world players decides he’s had enough, if a New York bank says no to Zaire, if Turkey or anyone of a dozen other LDCs default, the whole pack of monetary cards will come tumbling down. Trilaterals push for an international monetary system based on Bancor-created money simply because their banker necks are already in the wringer; the gold solution is no longer available because the U.S. long ago shipped out its good delivery gold.

At this stage, Keynesian dogma is useless. Keynes left no guidance to his followers for the contemporary world mess. Although he was personally aware of the role of gold, he did not anticipate that the greed of his followers might exceed their good sense.

INTERNATIONAL BANKERS AND BANCOR

The benefits of Bancor will accrue to international bankers more tl1,an to anyone else. The interlock between New York international bankers, the Trilateral Commission, and thus, Trilateral proposals in Bancor can be traced precisely.
The earnings that major banks receive from overseas is a matter of public record and is a measure of the division between their domestic interests in the United States and a global economy. The degree of domestic control over the economy by international banks has been identified in a report published by the late Senator Lee Metcalf, “Voting Rights in Major Corporations.”5 Also a matter of public record are the names of international bankers who are Trilateral Commissioners. When we integrate these three statistics,

(a) source of bank earnings

(b) control of domestic companies

(c) Trilateral membership, we identify a highly significant interlock between international banks and the Trilateral push for a global economy

Table 9-1 ranks twelve international banks in order of their 1976 earnings from overseas; that is the bank with the highest percentage of its earnings from overseas is ranked Number 1, and the bank with the least percentage from overseas is ranked Number 12 (columns 1 and 2). This percentage is compared with the equivalent 1970 figures to demonstrate that foreign earnings have ballooned over the past five years or so (columns 3 and 4). Column 5 is the Metcalf Index of domestic control by these same bankers, defined as the number of the 122 companies examined by a congressional committee in which the bank is among the top five shareholders. Column 6 lists Trilateral commissioners who are also directors of these banks.

Chase Manhattan is the bank with the highest percentage of earnings from abroad: a remarkable 78 percent compared to 22 percent in 1970. In brief, David Rockefeller’s international merchandising has made Chase a global bank, not an American bank, and we might call David a de facto world citizen, not an American citizen. At the same time, Chase has a very low rating on the Metcalf Index. The bank is among the largest five stockholders in only eight of the 122 companies studied by the sub committee (compared to Citibank’s 25 and J. P. Morgan’s 56.)

No fewer than six Chase Manhattan directors (Kissinger is on the Chase International Advisory Board) are represented on the Trilateral Commission. In sum, Chase is heavily, almost totally, oriented outside the United States. Its pecuniary interest in promoting a New World Order is slightly more than obvious.

Contrast Chase to J.P. Morgan where 53 percent of income is from overseas (up from 25 percent in 1970) with only one Trilateral representative. Banks like Charter New York (formerly Irving Trust) and Chemical Bank do not appear on the Metcalf Index at all and have no Trilateral representation, that is, they are not apparently involved in creating a New World Order.

This pattern is dramatized if we rearrange the data in table 9-1 with highest Trilateral representation first.

BANKS WITH TRILATERAL REPRESENTATION

In a few words: the Trilateral Commission is dominated by a very few international banks, essentially Chase Manhattan, and is an institution focused outside the United States. At the same time, the Trilateral Commission has taken over the United States executive branch. We have not been taken over by communists or Russians or Martians but by a group which wants to “revise” the Constitution (to organize more political power) but is without majority financial and economic ties to the United States.
 

A REALISTIC VIEW OF THE MONETARY WORLD

A rational international monetary system now evolving could brush the IMF and the Trilateral fiat “coordinated” monetary arrangements into the dust. Whatever foreign finance ministers may say to W. Michael Blumenthal face to face, a new monetary system is slowly emerging with its roots in gold, fixed exchange rates, and rejection of Keynesian demand stimulation techniques.

Pointers to this hard money, gold-based system include:

. Jacques Rueff, de Gaulle’s chief financial advisor, author of The Monetary Sin of the West, unabashedly gold oriented, was advising French and Japanese governments, prior to his death in 1978
. The European attitude to American financial policy is noticeably hardening: witness

Blumenthal’s February trip to Paris brought hostile European reaction, and more importantly, the creation of the European Currency Unit (ECU)

. Japanese citizens may now hold gold deposits outside Japan, and there are internal efforts to develop the use of gold. Soviets are interested in a gold-based international monetary system.
. Arabs are skeptical about exchanging scarce crude oil for ever-depreciating paper dollars and are searching for a reliable monetary medium.
. South Africa has awakened to U.S. imperial designs in Africa (“strangling with finesse” as Prime Minister Vorster phrases it).
. At home billions more are scheduled for boondoggles (Humphrey-Hawkins), which will backfire and push even more Americans into the hard money camp.

Project the above facts to their logical conclusions and we conclude:

. Floating rates will be rejected as too costly. Contrast this to the Trilateral proposal “learning to live with floating rates.” Fixed rates will return at some point.
. Reintroduction of gold into the world system will pull the rug from under Trilateral international monetary arrangements based on Bancor.6
. If the United States, under Trilateral guidance, cannot sell the core countries on its international monetary
arrangements, it will never sell the other hundred or so countries in the world.
. Unless the U.S. gets its monetary house in order, it will notably lose world prestige and influence; it will skirt revolution at home and endure major social consequences.

ENDNOTES: CHAPTER NINE

1. Motoo Kaji. Richard N. Cooper. Claudia Segre. “Towards a Renovated World Monetary System,” Trilateral Commission TaskForce Report No.1 (New York. 1973). p. 19.
2. John Maynard Keynes. Essays in Persuasion (London: Hart-Davis. 1952). p. 209.
3. Robert Soloman. The International Monetary System, 1945-1976: An Insider’s View (New York: Harper & Row. 1977), p. 333.
4. Ibid.. p. 336.
5. Referred to as the Metcalf Index.
6. This was written in mid-1978, before the gold-based ECU was announced.

Back to Contents