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Chapter 2

The Inter-War Period

(Does history repeat in some version?)


Denmark was in a debitor-category with Ethiopia called Abessinia at that time. All European coun-tries were head over heels in debt, just like today. But Denmark was exceptional indebted, just like today.

A Danish former member of our parliament, professor (economics) L. V. Birck had already publi-shed a great work about the debt of the nations in 1925. The Scourge of the Debt  (in Danish) is the title of the book, and it a tremendous careful enumeration of the (then) debt, and the contraction of debt for nearly 1000 years in the countries of Europe. I shall not go into any details of the economies in Denmark or in other European states either in the inter-war period.


Professor Lauritz V. Birck had been promised to be allowed to tell us the truth in relation the treason in relation to the bankruptcy of Landmandsbanken[1], but later he had been forbitten to tell the truth in writing and public speaking. I have to mention this little episode was just a mini-detail of a much bigger and more international collapse building on treason alone. In chapter 7 I shall report this scandal, this catastrophe in further details, and perhaps point at some of things which is going on in USA 2001/2002.


Not much has changed in the heads of the human beings since Plato wrote his cave parable.


Creditors, their servants, politicians of the Governments and their servants, in particularly, the re-sponsibles, they were called, and they were responsible, they certainly were to blame. The people did not get a chance, they were fooled in very effective way, as we shall see.


In the 1930s the nations apparently tried to get the best out of the awful situation of terror against the economic laws of the truth[2], but the international cooperation collapsed, and war was the only possible outcome, at last.


Nothing, absolutely nothing points in the direction that history shall not repeat itself. We have denied the possibility to learn from history, and we have not yet removed the responsibles of the treason or their influence. We shall deal with this matter below in a way most of readers perhaps have not quessed.


Just at the beginning of World War II a new system of international trade, of borrowing and of cooperation was taken into consideration and finally decided in 1944. This new system of international trade and borrowing was established as a scheme of, or a more or less designed system to be used after the war.


A new system of international trade and borrowing was establi-shed

The international gold standard disappears from the customary system of international trade, of clearing with the domestic foundations of stability in United Kingdom from 1932 and with the Bilateral System of clearing in Hitler-Germany from 1933.


Steady! I shall not teach you to advice the Government in your country. You will soon learn much more.


You shall know just a little of the basic of the international trade and borrowing, but you shall not learn any superfluous details that have no other objective than to cover up the truth to people out-side and also inside the branch of economy. The covering up has been done by a.o. Jesper Jespersen in the Danish newspaper Information on April 30th and the 31st 1995. I have to say that I can much easier tell the truth and the complete truth - so help me God - without any employment at the University-Center of Roskilde, Denmark, and without an obligation in advance to approve the inte-gration of the European states that most of all is the hide away of the responsible politicians who destroyed the natural economic basis of our nations.


Just a little about gold, gold standard, domestic stability foundation system and of bilateral clearing, but in a short and I hope easily understood formulation without the usual technical language.


Gold standard is an attempt to make a joint international scale of economic values. The values are primary measured in unites of the national currency. Because currencies is like some kind of propor-tionals, the price on gold was used to measure in international terms. Gold was desired everywhere, and it was valued in every nation[3]. In this way the gold became a joint international unit of calculati-on for all the other values. The arrangement was made so that if a country in one year ended up  with a deficit on the balance of payment in relation to another country, then the deficit country had to deliver an amount of gold whose value was corresponding to this deficit. The other way around in the other country that ended up with a surplus. The surplus-country received the mentioned amount of gold corresponding to its surplus. Such an arrangement meant a smaller stock of gold in the deficit-country, and a larger stock of gold in the surplus-country. This would signify the responsible Government in the deficit-country to decrease the amount of bank-notes, and to tighten the credits via the centralbank.


It is presupposed that the authorities were in control of, and were responsibility for, the centralbank [4], but, as you will see below their control is mostly an illusion.


There are two versions of this arrangement with gold. If you do not move the gold but only transfer the orders[5] for gold, it is called the Gold Standard. In the other version you move the gold, and then it is called Gold Coin Basic. The last version is the best of the two. The necessary interventions pressed down the prices on goods and the prices on work (wage), because the amount of money and credits have to match the stock of gold[6].

The following of lower cost for the businesses made the export-enterprises more competitive. In the end the trade-deficit would disappear, and when that happened the gold returned, and the possibility of more abundance of money, more credit and higher wages was present again.

The system was criticized for its creation of unstability - the fact that wages and prices could move in both directions. The system was suited however for its ability to restrain weak governments, espe-cially under the version last mentioned[7], because a great deal of the disorder could not be hidden.


You shall not forget that in the period with the Gold Standard, which particularly was ruling from 1870 to the mid 1920s, the national incurring of debt still flourished just as wildly[8]. This has been emphasized by Mr. Robert Triffin[9].


"Is History a light reading or an instruction, shall the theory be able to yield material of discussion to the national-economic scholastics, or should we know the economic laws so that we can make our arrangements with them and not just arrange them with us", L. V. Birck asked.


If we have to have the men of finance on the bridge, or if we rather should wake up from the sleep of the Sleeping Beauty and manage ourselves as true Danes, is decided by the voter, they say, the viewer and the reader in a democracy. We have democracy, or do we just believe we have?


"The truth is what people believe in". But are they sure? Somebody might claim:

"National debt is immoral and destroying, imperceptibly undermining the groundwork of the state, it is handing over the living generation to the curse of the next". (quotation: Napoleon I and L. V. Birck).[10]


The system of stabilization foundations were used to separate monetary policy of a nation from its economic policy. This means that countries, that were able to earn gold in another way than the usual by usual, of trading of goods for example, through debt-speculation and practical banking or trading with unusual products outside the law, could just build up a foundation of gold independent of the centralbank. With such a foundation a government could cover monetary obligations without influencing the prices and the wages, as they rather should respecting the problems of the ordinary trade-deficit. 


You use the accumulated noble metal in the foundation instead of providing the necessary intervention against the wickedness of the economy.

It was indeed the role of gold to serve as a tool to expose the wrong arrangement in relation to the imperative. Or: you did not use the gold as the noble tool to advice that something real had to be done in the community, you replaced the interventions with gold. This was truely misuse of gold.


The possibility to use this artificial trick was present only because the Bank of England was a private affair. United Kingdom was the first country that used the system to stabilize the exchange in this way without using the monetary-policy on the economy by varying the amount of money being circled, the credits and the wages and incomes. Oh! economy is very difficult, you would perhaps maintain.


No, it is not. It has been made artificially complicated, just to confuse you and to make you unfree. It has been done by camouflaging for you, what is happening, what may happen, and what there is to do using the right means for the desired effect.


An example of the fantastic witch-craft was exposed by Arne Rasmussen, who wrote and defended his thesis 'Price or Parameter policy'. The primary object and one the results in this thesis is that not only 'the prices' on the goods can be used analytically as a demand-determining factor in marketing. Arne Ramussen showed, how the parameter price was taken over by the business administrators from the macro economists. This was simply mathematically the easiest for the purpose, and in addition, it was too complicated to work with more dimensions, researching all the coherent items to determine the demand[11].


On the 21st September 1996 I attended a lecture delivered by a younger and perhaps promising politician educated in economics. The subject was EU and the economy of Denmark. This ambi-tious politician maintained that it is important for the career to perceive and to express not only the EU-problems, but also the macro-economics in “the right way” (my comment: the politically correct way). Only in questions concerning EU, he was an outsider himself, but he asserted for the large audience that at least three members more of his party (the Conservatives) which were members of our parliament Folketinget too, had the same dissolute opinion like his[12]. This is a high level of thought in Folketinget.


About inflation, national debt and of dependence

(for 7th school-class)

The payment for the result of what is being produced and sold from the businesses (the revenue) can of course not just be transferred to the employees or be used by the owners of the enterprise.

All what has been used to produce, must be settled (costs). It is raw materials, working hours, wear and tear of the machinery, electricity, heating and many other things.

If you just paid out all of the revenue, it would certainly rise problems with the supplier’s fators of production (input). Perhaps no problems with the employees, before some time had gone, and they saw that the business had to closed down, because nobody would deliver the business the necessary raw material if they were not paid.


It is a similar but also a little different way you have to look upon the total of all values, and upon the money of the community. The currency you use every day is a tool to make the trade with goods easy, and to make the tranportations and the keeping of values convenient. Values are not the cur-rency. Currency can easily be spoiled as we shall see in this reading.


Money is the right that comply with the fact that you own, has produced/created results, which somebody demands.


Of course there has to be faith in the currency and the credits. That they are worth what is written upon them. Therefore the selected ones who should rule the country, allways have to secure that the amount of currency corresponds exactly to the value of the produced and sold goods. If generally producers’ sales are increasing every month the amount of currency and credits can be increased too. This implies, of course, that no problems with the economy is present. The issueing of money has to be managed by the National Bank. It prints more notes and it bear in mind to book the responsible Government before its members begin to use the money themselves or they let the circulation begin somewhere else. They have to bear in mind that the amount of currency perhaps has to decrease somewhere else at the same time too.


The increase in the amount of money (and the credits), and the increase in the production and the revenue in real terms always have to correspond. I hope that you are beginning to understand just a little. It will certainly not be more complicated.


Because the financial affairs in Denmark from the mid 1960s to 2002 were not in order, we had to have an attendant among the formal rulers in our country (= just wishful thinking). The creditors requested it. We owed goods or foreign currency, not Danish currency. What we pay back has to be exchanged for goods that are needed. Notes themselves are of no value at all.


If something is left of the production when everything has been paid, and the Danish have bought all they want with their money, the rest can be sold to the citizens or the businesses of other countries. That is called export. If there is too little production of goods compared with the demand, we can import more goods. If we have to borrow the regular currency to pay for the foreign goods, because the foreign countries do not accept our currency, we are debited. The state have to take the full responsibility of that account with the foreign countries. An account that makes up the flow of values into and out of the country.


The single citizens or the single business have to take for sure that our currency is noble, and can be exchanged for the foreign currency which is required for the foreign goods.

But it is very easy to issue to much money, too easy to increase the credits[13], and it is even tempting for a government to let that happen. The money then looses its value like the potatoes, when too many is been brought into the market. For this reason there were particular laws in Germany, because they have very bad experiences with inflation. The German Governments could not just order the centralbank to issue in the 1950s and the 1960s.

In Denmark the Minister of Finance would just call his national bank on the telephone, and give the order until the the midd 1990s. The corresponding Minister of Finance in Germany had no such possibility. Germany has a more constitutional secured centralbank, but now Germany has joined the Euro. What the Euro may be you shalle soon see. The German centralbank - Deutsches Bundesbank - was autonomous of the German Government, it is only subject to The German Constitution.


It fortunately occurs no longer in Denmark in 2003, I hope. The reason why it is so tempting for the governments to issue too many notes and give too much cheap credit is that the politicians in the government can then much easier then be reelected. The big amount of money primary have the effect that the citizens or the voters much easier can pay for thing they buy, and they are extra interested in buying more too, because they get a feeling of being in funds. They think they have a good Government, but they have not. It goes wrong, the prices begin to rise, and in this situation that is all the same, even if they had a little more notes. Moreover there is a tendency to the prices to rise even more than the most incomes of the voters, because the governments of many countries do the same (print more money).


It happens only because the government/governments started the whole process.


In this situation the government is tempted to increase the amount of money more, even if there still is no cover. They did that in Germany too in the beginning of 1920s. in the Weimar Republic.

We shall go in to more details on this subject very soon.


The taxes and the debt (of the people) itself is not felt very much, when false money or liens on our unborn children are made all the time.[14] [15]

It is a vicious circle like too much drinking for a long time. At last the abstinences and the pain appear. In this way the rulers have artificially meddled in buying and selling, and hidden it from the people.


The result is always national debt at last, because foreign traders eventually register that our goods has become more expensive every time they buy them again. That means we buy more than we sell. Perhaps our creditors in foreign countries eventually realize, that we will never be able to manage to pay the debt that we in long run have contracted with them. We then have to follow the indications of the creditors. Sweden reached this end in 1992.


We are then eventually selling lesser than before, but if we still buy very much in foreign countries - assumed we have no borrowing problems yet, this will make the deficit much larger. To be able to continue the trade anyhow, we have to be booked again. And it may continue in this way till the creditors say “Stop!” [16]


My country, Denmark, is especially vulnerable to this phenomenon called inflation, because the busi-nesses and the consumers in Denmark have to buy (relatively) so much in foreign countries to keep us going, especially the businesses. The quote of importation (the portion of the income spent on import-goods) is very high.


There are even more dirty tricks a government can use, when things go wrong in this way. It can alter the rate of exchange on foreign money by announcing that our money from now on is valued lower in proportion to the currency of the foreign countries. This is called devaluation. But it is only a short respite with that course too. At the beginning we get lower export-prices measured in terms of the currencies of the foreign countries, and the imported goods get more expensive measured in terms of our currency. This should gradually improve the disproportion of the foreign trade, because we buy less and sell more then. The debt is written-up measured in Danish krones.

But because we still import a high proportion of what we need for producing and for consuming, as I mentioned, the rising of the import-prices will soon effect our export-prices. In addition, a government, its authorities and advisers, are tempted to increase the printing of more notes and of offering more cheap credits to illiminate these bad effects caused by devaluation.


But we can not overlook the truth about money. It is not anything but paper and coins made of some metal. Goods and working-services are something quite different. It carries conviction that you can continue the print more money without covering it, but conviction is not true, I hope you understand now.


The government carries on with having it look like everything is all right. I would say like our former Minister of Finances Henning Dyremose “inconceivable good”, but I would have to add: “Especially inconceivably”. Perhaps he did know that he was wrong, wrong indeed. In this case he was a liar. Then we got a Minister of Finances called Mogens Lykketoft. He had his “recovery” till 1995, but the Danish did not understand him or did not notice “the truth in his words”. “The recovery helt on” for about 3½ five years, if you listened to TV. 


“This recession” was another of his untrue statements while his own Department of Finance told us that 915.000 out about 3 mill. in the laborforce were unemployed or expeled.


If a lot of countries just print too much money, a few banks will decide at last, if more loans have to be contracted. The result may be - you will see in a moment - that foreign countries or banks are going to control much more in our country than the citizens apparently imagine.  An evident threat without our awakening of the citicens. The EURO surely misses, it was created so by the bankers. If all countries - as is the fact now - just continue to contract more and more debt, they will gradually compete as to who can contract debt the quickest. It is the coining and forgery of banknotes. It hurts almost everybody apart from  the politicians, the bureaucrats and the international bankers in the long run - as you will see, "the long run has been reached now." It is a very slow and painful process to stop and to turn.

It is especially difficult to do this, when the leaders have put all critics to silence, and they have lied to the public about it. The public could not sense what was happening in secret. The press would not correct what was told to it. It was intended that we should not know. We should not know.

When all or just many powerful countries are bluffing in this way, it can lead to extensive commercial wars and perhaps physical wars. Perhaps the war that will end all wars like all the other wars has started.
The number of personnel of the state in Denmark is much too large. More than 1 million are employed in it, of which 650,000 are employed in the municipalities. In Spain 2 million are employed by the state, but Spain has 8 times more citizens. You will find nearly the same proportion, regardless of what coun-try you compare with in Europe.

The most of what the state offers can not be sold voluntarily to the consumers, but official consump-tions have to be paid. The costs of them can not be used for other purposes. If you use it twice anyway, because the governments allow it, without reserving the needed sum of tax, the money has been used twice.

When the tax-payers feel like hunted cattle, but they still have their possibility to vote, then it is most convenient for politicians that want to stay in power, to print and to borrow. If the rulers only increase the tax substantially, they will lose the power given by the voters.

Less than 1/3 of all salable production in Denmark, has the authorities not snatched. It was not their task to do so in a democracy - we were taught to believe, and it is a catastrophe, a disaster that it happened.

It has developed especially bad for the last generation, the public has mixed itself up in more and more with "production-free money" (in contrast to tax-free money). It has wry-wronged the whole Danish economy so that 2/3 is more or less artificially arranged. This is the reason why we can not export enough, and at the same time employ enough manpower. This is the reason why our goods have become too expensive to buy in foreign countries[17] [18] even though their quality is not anything special. At this moment they are copying our little-easy-to-grasp country in EU. Read about The Trilateral Commission below.

The former mentioned feature writer in the newspaper "Information" Mars 30th 1995 used the wage-proportion (of the cost in the businesses) to explain the misery. This was a general and traditional mix together of cause and effect.

The money-wages are too high in Denmark and the state (all together) is more than double in relation to sale-able production (when included transfer-payments in the public dispositions), no discussion about that. By reducing the taxes it will be possible to lower the money-wages, and as a result achieve the same or even higher real-wages by natural resign from the state.

The final result will be much more foreign demand for Danish goods, and an increase in the demand for Danish labor in Denmark. With the higher production and the higher consumption the revenue from the value added tax will increase too as a basis for lowering the income tax even more year after
year. The economy will then accelerate considerably in the right direction.

In practice this kind of economic policy had been verified in both New Zealand and in Tjekky for the last few years.

The mentioned feature writer Jesper Jespersen was not included, because he is not really interesting. He is just one of those twaddlers who often has the right to write nonsense, latest in a book about EU.
Just before June 2nd 1992 Denmark was over the head and the ears in national debt. The rulers had only one proposal: Enter the European Union linked to Germany, they said. The Danes voted No. Later (May 18th 1993) we had to vote once again, the politicians decided. In 2003 The Constitution of Denmark was altered (I wish). The money-emission had to be ruled in a secure way. The highest tax collection was settled in the Constitution.

Rules against monopoly in all markets (anti-trust laws) and several other things are needed. All the fine declaration of the intentions by politicians, and many of the positive formulated so-called human rights were removed from The Constitution, because they in reality were rights given by God or the Provi-dence.

Clear rules of what the authorities could not do or decide were added to the
Constitution.[19] It was (I wish) in 2003 necessary to explain to the citizens the real prices of the goods and services of all kinds, and to tell them how they till now have paid tax and duties on their whole physical and mental life from the birth-preparation-course to the funeral. They had to know, what they had earn to get, what they needed for themselves. An example: When you buy fuel for heating your house in Denmark close to
80% of the payment is tax, the price on fuel is 20% the payment.

Those who produce, those who are out of work, the pensioners and the children (70 per cent altogether) are cheated all the time.


As a politician happened to say in a seldom clear moment: "You can cheat somebody all the time... but you can not cheat everybody all the time." I would add: if you are not transforming their children into animals.

Back to the inter-war period
United Kingdom was the first country that stabilized the exchange-rate using a clearing-foundation, so that United Kingdom deviated from monetary political interventions in 1932.

In 1934 and 1936. USA and France followed the British model, and from September, 1936, these coun-tries agreed to use the foundation in the British version, and in such a way that the three countries could stabilize their exchange-rates to one another (even hold them fixed), without any monetary
political interferences at all. Holland, Belgium and Switzerland joined this co-operation of exchanges later in 1936. The Nordic Countries without independent foundations had just followed United Kingdom. Yes, there was not very much room for independence at that time. A little like today.

The stability of the exchange-rates as mentioned was especially secured by the fact that the foundation in the cooperating countries had to sell gold to each other paying with currency of the country, and by the fact that USA had fixed the price on gold to $35 an ounce fine gold. This meant that dollars and gold could replace each other in a proportion that was fixed at any time.

The bilateral system of clearing accompanied the Hitler regime, and had to be seen from the basis in-cluding the just wild international claims on Germany after World War I
[20].In the beginning of twenties changing governments in Germany tried (as mentioned earlier) to note-print the problems away to get bearable conditions, just like the Danish state has done a lot for the last 30 years - just in a smaller size, while the rate of Danish exchange is artificially secured until Denmark perhaps leave the European Union and the link to Euro. Under the conditions of the past the result was for example that many German stock-shares went to foreign countries[21], because they gradually did not want to receive the

worthless German notes in exchange for foreign goods. They transferred actually stock-shares to get gold to buy demanded foreign goods. In this way problems were left for some time, but the stupid aggression-plans with Hitler in power also caused that there had to be full control of the currency exchange in Germany.

Germany could not get gold to secure its purchasing power, because of the war-indemnity and the excluding system of stability-foundations among others United Kingdom, Holland, Switzerland and the Nordic Countries. The gold was circulating among the countries, that were participants in the stability-system first started in United Kingdom. This system simply prevented that gold from being delivered back to Germany even when this country had a surplus on the balance of foreign trade. The system of
stability-foundation was created to prevent deliveries of gold to Germany. Germany had no gold, but nearly all trade was based on the gold, and Germany was charged with a burden of 60 % of its total national fortune after WWI.

There was both generally, weighty international causes, but also causes directly connected to a self-contradictory war of aggression. Especially France and United Kingdom had the enormous charge on Germany, but the net outstanding debt was in the international banks in Manhattan

You will perhaps understand that the international trade-connections were not just normal in the thirties, and before the war there was much talk about the decreasing total international trade between the nations. The trade was decreasing, and this was a disadvantage to everybody. The same is
happening today with the creation of blocs as a defence against globalization instead of sound reforms. The circumstances in the thirties were further worsen because of the duty and trade obstacles abroad. After WWI, the creditors claimed that Germany had to pay in gold. The gold was not in Germany
[23]. Accordingly to this fact I can tell you that one single international bank made 20 Billions $, 16,200 tons of gold on WWI [24].

The charge on Germany was about 150 Gold billions anno 1919 or the half of the German national fortune before World War I. You do not pay such amounts in gold. Gold is only to be used to pay the small differences on the balances of trade. Peculiar how such a difference could be possible. If the
charge on Germany was right or wrong means little, could you immediately think
[25]. You should not think that there was a lack of initiatives from German side. In 1920 Gustav Krupp went with the understanding of the German Navy to join a company of shipyard near Nagasaki. The objective was to exhange technical information on production of U-boats. Dr. Techel (chief-constructor by Krupp) left for Japan at last to manage the building of U-boats at Kawasaki shipyard.

In 1922 the states of Germany and Russia officially cancelled disagreements of the war with the Rapallo-Treaty, another initiative taken by high gentlemen. Besides the diplomatic negotiations that were very intensive through the whole course (as you will see below) there were secret military talks at the highest level. The chief of Germany's defence-forces, General Seeckt and the German Chancellor Dr. Wirth participated in negociations that lead to a secret military treaty between the Red Army and the German Army. It was signed July 29th 1922. The title, "provisional agreement on trade" was pure bluff, as the objective was to get the German weapon-firms like Krupp to join the construction of the Russian weapons-industry. It was about Russian fabrication of new Juncker bombers, education of
German airmen in the Sovjet Union and a common manufactoring of poison-gas and variety of artillery-ammunition. Besides the "provisional agreement on trade," Krupp got a concession of agriculture in Ukraine (1922) that was much easier to talk about.

Now back to the 1930s. The brightest gradually had realized that the war with Hitler-Germany could be an expensive, perhaps a difficult duty to solve. And who shall pay, and can they and will they pay after the war? It was necessary, necessary indeed. Here it was good for the later system and good for the United Kingdom that Henry Morgenthaus' Harry Dexter White was very easy to talk to for John M. Keynes regardless of their apparent differences.
The authorities in USA and in the former USSR knew and both set of authorities knew the others knew. Just the public did not get acces to the knowledge. He was a Sovjet spy.

Without going into details about all the differences in Keynes' and White's plans, I have to say that Keynes wanted an union of clearing that let the surplus of creditor-countries (temporarily) be used by the debitor-countries in a way that the deficit would not automatically urge the weak governments to interfere in the mess. We discuss this in more realistic terms below, and we have to say that not all the solutions were made by Keynes alone. He made some real effective proposals of a way to handle the international system of payment. But did they listen? No.

The result was, on sober consideration, a most curious system that would exempt the politicians for the responsibility for practically everything essentially, and it would indebt the country, if there should be just a slight lack of ethics among the politicians of future governments.

The White-plan had been arranged to build on the payments of gold, the currencies of the member-countries and bonds of the states. The influence on the supreme agency of clearing-systems should be founded on the quota-calculation about the sizes of the economies of the countries and the reservation of values. Thus it was partly a paper mill. Which country and which representatives that would get the deciding influence and right to command on this basis may seem nearly self evident. USA and the international banks.

Keynes would give the member-countries an automatic right to a certain credit, without any pre-arranged duty to pay in capital. Only credit accounts over a certain limit were to bear interest. Keynes would let the creditor-countries pay interest too, in order to urge, Keynes maintained, both the debitor
and the creditor country to make total balance in the foreign trade. Only if you mix up the state and the nation, I have to add. This is xactly when the state can decide and do things over the heads of the citizens in a country, when few are united.
The Constitutions seldom prevent them from it, and the Press also let it happen (see chapter 12).
And you knew that for sure, John Maynard Keynes and Harry D. White. You must have known accor-ding to your high degree of knowledge.

Keynes was not against devaluations within some limits and after a sovereign decision in the clearing unions, and with the consent of the state, you see. White attached importance to the economic policy that should be the mean against the unbalanced international trade combined to interior monetary policy in the deficit country.

You do not have to take much notice of the precise details in the introductions of the plans. They were introduction to negotiations with much talk "for the scene," but with quite another singleness of purpose behind the stage. A performance where new international money, perhaps like in the
EU now, with the names UNITAS and BANKOR was presented.

You shall not be astonished when I tell you that Keynes' BANKOR should be able to be bought for gold, but not reverse. It is very funny. More about this in appendix..

If you want to know more about how decisions are taken today in big international organizations, you can read among others Frederick K. Listers: "Decision-Making Strategies for International Organiza-tions: The IMF Model." In this book you are given the code to how things have to be done in the right way, you know. You will also learn about the salami-sausage-method in international illustration.

The final result of the negotiations should not be reached of course until World War II seemed to come to an end. The small indebted nations were much easier to talk to, while their governments were in exile, and the rain of bombs or the occupations/cooperations lasted in their native countries.
To understand who really was fighting during world war II read also  "Trading with the Enemy" by Charles Higham, 1984. Try an extract from a most interest preface of this book:

Denmark did not participate in the money-plan-negotiations, because Denmark was officially neutral in the beginning of the war, and the start of these negotiations, and the country was ranged in the lowest category of debitors next to Abessinia (as mentioned above).


Go to next chapter

[1] The largest bank of Denmark. In the 1980s it changed its name to Danske Bank (Danish Bank).

[2] They do not handle short-term planning of growth, employment and so-called activity. These thing are only for actors on the stage, where an absurd drama is being played to get people into delusion.

[3] In this way the gold was an international unit of accounting for all other values in the nations.

[4] This assumption is very important.

[5] Paper-orders. They were much easier to transfer than gold bars. Gold bars were often stolen. But there is an even more serious problem too. Paper is very patient.

[6] It happens because the buyers decide the prices on an item that is for sale. If all buyers have less money, and the supply of goods is the same, and the preferences for the different goods are unchan-ged, the prices have to decrease. This mecanism is shown very clearly at an auction, but it is ruling everywhere in spite of the capers of politicians. Hardly any politician knows anything real about economy. They try to give you the impression they know a lot, but this is another thing, I must not lie.

[7] When the gold is moved, there are few possibilities. The national debt can then be built up secretly, especially if the people are unenlighted, and if the representatives of the state manage some other values or at least are willing to do, as they are told. Just remember that.

[8] Mr. Robert Triffin, one of the famous constructors of the European currency, is pointing this out. But that the consequence of this history should be, that our nations have to come to and end is just nonsense. That the debt and the euro are the means for this purpose is another theme, as we will see below.

[9] You can read it in his book, “Europe's Money, Problems of European monetary coordination and integration”, Oxford 1984.

[10] John Maynard Keynes and Joergen Pedersen who have my concern further more later on, in the 1930s suddenly forgot, what the truth was without any limitations. And the same did the fine societies all over the Western World.

From 1996 nearly all Western countries were indebted. Now the debt meant a great deal. If someone would tell me, what they told our fathers in the thirties to be a scientific truth, I would say he is a liar. It was convinient for the “inside” world of power to get the “outside”world to believe it was the truth. And it is more than two generations ago. Never the less, it was and is a lie.  

[11] Arne Ramussen was world-famous.

[12] But no dissolution to the Keynes-economy. 

[13] Because it really works like hidden taxation on savings. The politicians love hidden taxes. In addition inflation works in the beginning promoting on the revenue. In the long run the rising of the prices works in all parts of the production and sale, and then we are back again, where we started - at a higher pricelevel, no increase in the production, but poorer with an illusion of higher wage. The phenomenon is called money illusions.

[14] Which is much the same. There is no guarantee that these unborn children will honour the debt of their parents. They certainly do not have to do so - morally seen. They have not been asked.

[15] Inflation is a breach of the right of treaty, following Hugo Grotius, who is the founder of internatio-nal law. He formulated the founding rule: “pacta sunt servanda” that means “treaties must be kept”.

[16] Then the foreign trade is effectuated totally private, the nation's money are substituted for foreign currency (Dollars or Euro; Argentina is the latest example of this), and the power of the state is more like the power of a mafia. Just one among the others. That has happened in many countries.

[17] They are still using an economic theory which is generally at fault, and it does not deal with the influence of the public sector. This public sector amounts to about 2/3 of the whole economy (when transfer-payments is accounted as private), but no theory at all is dealing with existence the public sector. A theory about the bureaucracy is not even needed, as you practically can see how it works. But the picture they show is drawn from the one third alone which remains.

[18] The German hyper-inflation is perhaps one of the biggest thefts in history of the world too. Countless older people who had saved for their old age were brought to begging. This is the perspective.

[19] Read in chapter 12 about the priciples of a good and of a bad constitution.

[20] The Versailles Treaty including the Reparation-claims on Germany was maintained by the Allied in Paris. The total economic reparation-claims was between 137 and 150 billion Mark in Gold. Maj 10th, 1921, the claim was reduced by 42 p.c. France had for example used a false nevel of prices, and had also included some factories which were closed before 1914. There were more or less obvious reasons for the reduction.

[21] When 1 German Mark was 45 (Danish) oere (1/100 of a krone), Germany let Marks flow out to the neutral countries (for example to buy food in Denmark). In the amount we received Marks for these food-products the whole Danish agriculture-export under the war made a big lost, because we received Marks to the rate 45, and perhaps they were 5 oere worth in 1921 (only 3 years after the war). Amerika had much the same problem, because USA had an awful big amount of Marks. Therefore it had to secure the exhange-rate of Mark. Germany used that fact and let Marks all over the world. Germany was interested in import to re-exporting, as long as it could pay with Marks in foreign countries, and it could get raw materials or finished goods, and re-export these for krones or pounds. Actually it was in favour of Germany to “export German factories” so that Germans in return could buy values in other countries, which they could not reach in any other way.

[22] Manhattan will in the following reading be used as a gathering indication of the financial center near Wall Street in New York, where the exchange and multi-national concerns and bank empires are represented.

The history of Wall Street is long. A little about how Wall Street started:

Originally there were 13 colonies in Amerika. They were called New England and were colonies of England. Here colonists used their own money. There were several, called "colonial script" and everything went very well. There had been international disagio-problems, but that could not explain, what was planned to happen now. When the colonists made their money themselves, they were able to control the purchasing power. The English bank-managers did not like that, they wanted to control the monetary system like they did in England. So they introduced their monetary system and decreased the amount of money to about
one half. Now the happy living in the colonies was totally changed. Unemployment and poverty were the result. The rage was turned against the Englishmen and the War Of Independence started. Two of the leading figures behind this revolutionary war were the experts of finance Robert Morris andAlexander Hamilton. He later became Minister of Finance under George Washington. It was not a good idea to try financing the war with England by tax-collecting, because taxation always hampers people. The French participation was financed (with Necker as an adviser) by loans too (1.2 billon Frcs). Necker was much more a clever man of finances than he was a skilled and wise statesman.

For this reason and for another reason the authorities let money-emission do the work to get the war that was wanted by a few. They issued Government Paper and other instruments of debt of the warrant types. They sold them to ordinary, good citizens, who bought them with their true money earned by hard wor-king. They sold paper money via the federal government, the single states and via the municipalities. When the war had ended, they also gave some of the paper, and a little real money to the home-coming soldiers. The value of the papers depended on the possibility of the state to be solvent, and if it could/would honour them to an acceptable price. While the time passed the most did not count on the paper, so they used it as wallpaper and labels.

But with Hamilton as Minister of Finance something was planned to happen. The single states (in America) made paper money to an amount of 210 millions and the Union 360 million dollars under the War Of (In)dependence. Then the paper dollar had to fall. In 1779 you could exhange 38 paper dollars with 1 silver dollar, the year after, 100 and in 1781 sometimes 1000 paper dollars for 1 silverdollar. Then they were drawn back, and for 100 dollars you got 5 dollars of interest-bearing certicates. Only a little returned, because they
had been practically used up for other purposes as mentioned.

The first time they tried to pass the new law, that was known by few, it failed, but in 1790 Thomas Jefferson, returned from France, where he had been American ambassador in Paris (and a secret adviser for the French revolutionaries). With his help they succeded as planned in America. Now the law could come to
reality - 14 years after the Declaration Of Independence? The Congressmen listened to the proposal with deepest surprise, but the speculators that had planned it from the start did not.

The papers should be honoured to nominal value, and the debt of the single states should be paid by the federal government. Now the speculators hurried out in the country to buy paper quietly from the people, who did not know of the law proposal. Alexander Hamilton wrote to George Washington that he long ago had learned that public opinion was of no value. The money to buy  the paper came from new Government Paper sold to the same people 25 years (one generation) after the war.

In this way the citizens paid the cost of war, and they paid to be ruled in the future. Wadsworth, who was a member of the Congress for Connecticut, transmitted the ships to the Southern States to buy all the paper they could get. The rumours told about unjustifiable manoeuveres "behind the scenes." They were told so loudly that the New Yorker newpaper "Daily Advertiser" even calculated, what the different speculators could foresee to gain, if the law was passed. This calculations showed that Robert Morris would pocket $18
millions (in the years 1790-1792), Jerimiah Wadsworth $9 millions and Governor Clinton, $5 millions.  Fisher Ames and Christopher Gore were also members of the syndicate. The enthusiasm was, as you will under-stand, at the boiling point in the coffee houses of Wall Street, where the speculators had their headquarters.
The only thing that was missing was to close public admission to the growing activity in Wall Street. Too much publicity, and too much public participation could damage the speculation, and make it too uncertain for the participants. This was not managed "in the right way" (nearly the same) until after the Civil War of 1861-1865. The War Of Independence should rather have been called the War of Dependence instead.

[23] November 30th 1918 there was £115,417,900 in gold in the German Reichbank, Keynes wrote or about dkr. 6 billions. The Reparations claim was between £7 and £10 billions or between $33 and $47 billions. So between 70 and 100 times more than the worth of the gold in Reichbank.

Henry Morgenthau maintains in “Germany Is Our Problem” (see more below) in 1945 that the reduction of the Reparation Maj 10th 1921 was from $56.5 to $33 billions. In 1925 Professor L. V. Birck accounted there was dkr. 25 billions in gold totally in all the national banks of the world, the half of it in USA. So even if all national banks in the world had gathered all their gold to pay the accounted debt of Germany, the result had only been dkr. 12 billions in 1925, when the price-development, the use of capital under the war and the surrendered area were counted in.

[24] Germany Germany tried as much as possible to secure its access to raw materials, foreign currency and gold. Border crossing creation of cartels in the allied and neutral countries helped a lot to the solution of this problem. Agreements, caused by the bolshevism of the Soviet Union that needed nearly everything and
especially effective equipment of production - developed to bilateral agreements about Russian leverances of oil and Russian gold.

[25] Until Until 1923 Germany should have paid about 10 billions, including 2 billions in gold, Sterlings bills and also 15 million for the Slesvig-and-North-Holsten Annexation (of Southern Denmark) from 1864 to 1920. The Germans are  accounted to have paid 60 billons. The Institute Of Economics, England, fixed the amount to 25 billions.
From January  the 11th, 1923 on, French and Belgium troops occupied the  Ruhr District that was the indu-strial center of Germany. The Germans stopped working and left the area. The French put some of them to prison, but July 31th, 1925, followed the Dawes-Plan of American initiative. That actually settled the disa-greements till the Young-Plan from 1929.