1 September 2010

Lord of Finance

One recurrent theme of Lords of Finance is how despite their best intentions, the 4 key central bankers were unable to prevent narrow national self-interests from de-railing the global economy and its needs. The French were accused of being debt to an impassioned plea for help from the German ambassador, Dr. Leopld von Hoesch who asked “Did they really want to provoke a revolution in Germany?” Paul Einzig captured the view of many in Europe at that point when he later wrote, “On the ruins of the wealth, prosperity, and stability of other nations, France has succeeded in establishing her much desired politico-financial hegemony over Europe.”

Ahmad writes that ‘The American ambassador in Berlin, Frederick Sackett, cabled to Washington that unless Germany received $300 million immediately, it would declare national bankruptcy and default on the $3 billion it owed American banks and investors. George Harrison convened an emergency meeting at the New York Fed with Under Secretary Mills and the two most knowledgeable men on Germany, Owen Young and Parker Gilbert. They concluded it would be throwing good money after bad, when the United States had already contributed $300 million by its moratorium on war debts.’

In an anti-reparations treatise of the time, German Central banker Schacht wrote of “bleeding Germany white” and “destroying Germany’s credit”Ahmed notes that ‘One excerpt in particular was heavily quoted in British and American newspapers: “Never has the incapacity of the economic leaders of the capitalist world so glaringly demonstrated as today….A capitalism which cannot feed the workers of the world has no right to exist.” ’

In 2010, we’re not quite at that point yet – although we weren’t too far from if recently on the streets of Alters!