[Dave Birch] I was fascinated to read about this recent addition to the historical collection of the Holocaust museum in Israel.

the collection of 43 drawings by Felix Cytrin of his fellow Jewish prisoners have been donated to Yad Vashem, Israel’s Holocaust memorial and museum, where researchers can study them and they will be exhibited for public viewing.

[From Portraits of Jewish ‘counterfeiters’ donated – Israel Jewish Scene, Ynetnews]

Why was I reading about these particular drawings of these particular prisoners? Well, its because

They are among the few images that exist of the young men who worked in an infamous secret Nazi operation to produce fake money, fictionalized in the Oscar-winning film “The Counterfeiters.”

[From Portraits of Jewish ‘counterfeiters’ donated – Israel Jewish Scene, Ynetnews]

If you’ve never seen it, “The Counterfeiters” is an excellent film. It won the 2007 Oscar for best foreign film (I saw it in the original German with English subtitles) and is the true story of the Nazi’s plot to destroy the British economy. I originally came across it because my son was studying German at high school and he visited Sachsenhausen as part of a cultural visit to Germany a couple of years ago. I was so fascinated by the story he came back with that I ordered the movie on Amazon immediately.

The film is based on a memoir written by Adolf Burger, a Jewish Slovak typographer who was imprisoned in 1942 for forging baptismal certificates to save Jews from deportation, and later interned at Sachsenhausen to work on Operation Bernhard.

[From The Counterfeiters (film) – Wikipedia, the free encyclopedia]

Operation Bernhard was the Nazi plan to devastate the British and American economies by flooding them with counterfeit banknotes. They took 143 Jews from a variety of trades—printing, engraving and at least one convicted master counterfeiter, Salomon Smolianoff—and moved them from different death camps to a special unit: “Block 19” in Sachsenhausen concentration camp. There they set about forging first the British and then the American currency. They succeeded in making Sterling notes that fooled the Bank of England and then, almost at the end of the war, fake Dollars.

With defeat staring them in the face, the Nazis packed up all their paraphernalia, including printers’ plates and counterfeit bills, into crates which they dumped into Lake Toplitz, the deepest, most isolated lake in Austria. Toward the end of the war, they also cast chests of Nazi gold into its depths, gold which they had looted from conquered European countries. Ever since the end of the war, this has been a lodestone for treasure hunters.

[From The Counterfeiters]

The Nazis were never able to put their plot into operation. The original idea, conceived at the very start of the Second World War, was to drop the worthless banknotes over England, thus causing economic instability, inflation and recession. Remember, in 1939 the German people had very recent memory of worthless paper currency devastating the economy, as chronicled in Adam Fergusson’s book “When Money Dies” that was given out at the last London BarCampBank. In the end, the prisoners forged around Sterling 132 million, which is about four billion quid in today’s prices. Now, printing four billion quid’s worth of worthless paper money not backed by anything might sound like a reasonable way to destabilise the economy, but I don’t think it would have worked. In the last four years, under what is now know as “quantitative easing” rather than “counterfeiting”, the Bank of England has printed around two hundred billion of imaginary Sterling (i.e., fifty times as much as the Nazis).

UK’s £200bn programme of asset purchases – known as quantitative easing – on hold, Bank of England announces

[From Bank of England halts quantitative easing | Business | guardian.co.uk]

Rumours abound in today’s newspapers that they are about to turn the printing presses on again. It’s interesting to reflect that many economists think that Hitler’s plan (i.e., dropping the money from planes) would have had a more positive impact on economic growth than the Bank of England’s (i.e. giving the money to bankers). That kind of economic warfare predates Hitler by some time. In fact, he probably stole the idea from us Brits in the first place.

During the American Revolution, the British counterfeited U.S. currency in such large amounts that the Continental currency soon became worthless. “Not worth a Continental” became a popular expression of the era.

[From United States Secret Service: Criminal Investigations]

The idea was already old then! During the American revolution, the British had taken to counterfeiting money on a large scale while they occupied New York, an action seen as being one of perfidious Albion’s sneakiest tactics.

Thomas Paine was even more outraged, publishing an open letter to the British commander in which he assailed the decision to counterfeit the dollar. “You, sir,” he wrote, “have the honor of adding a new vice to the military catalogue, and the reason, perhaps, why the invention was reserved for you, is, because no general before was mean enough even to think of it.”

[From The New $100 Bill and the War Against Counterfeit Money – WSJ.com]

I can’t imagine that this is true—I’m sure it had been done before—but Paine’s outrage about the underhand nature of economic warfare is worth noting, not that economic warfare was either new or a stranger to our shores even then. Britain’s first economic terrorist and our official blog hero, Sir Thomas Gresham, had dabbled most effectively two centuries before.

In 1587, he “cornered” bills of exchange drawn on Genoan banks so effectively that he was able to disrupt the build-up of resources for Phillip II’s Great Armada , demonstrating how sophisticated economic warfare had become by the 1580s.

[From Digital Money: The queen would not have it called, as in other countries, the Bourse]

So is quantitative easing a sound government policy or a secret plot to destroy our economy? Personally, I’ll always support the cock-up theory of history over the conspiracy version. In which vein I can’t help noting the final supreme irony of Hitler’s attempt to ruin Sterling more effectively than the Chancellor of the Exchequer. Laurence Malkin (author of a detailed history of Operation Bernhard called “Krueger’s Men: The Secret Nazi Counterfeit Plot and the Prisoners of Block 19”) notes that after the war,

Through one of the Jewish money launderers, the Jewish underground passed on thousands of counterfeits to help the ingathering of exiles to Palestine and the purchase of war materiel for the nascent Israeli army.

[From Lawrence Malkin – Krueger’s Men Secret Nazi Counterfeit Plot Operation Bernhard – The Story]

There really is a law of unexpected consequences and it really does apply to money.

These are personal opinions and should not be misunderstood as representing the opinions of
Consult Hyperion or any of its clients or suppliers

Leave a Reply

Subscribe to our newsletter

You have successfully subscribed to the newsletter

There was an error while trying to send your request. Please try again.

By accepting the Terms, you consent to Consult Hyperion communicating with you regarding our events, reports and services through our regular newsletter. You can unsubscribe anytime through our newsletters or by emailing us.
%d bloggers like this:
Verified by MonsterInsights