The shooting, the
bombing and the killing of World War II stopped in August of 1945, and the
War was formally over.
The United States
and Britain knew the War was won, in 1944.
At that time, a
Conference was called among the 44 Allied Powers, to determine the nature of
the world’s monetary and financial system after the fighting was over.
It was held at Bretton Woods, New Hampshire, USA,
in July of 1944.
As a result of
the Conference, a set of Agreements were signed.
important of all the agreements was the one that established that gold should
be the money to be used to settle all trade deficits between nations, but in
lieu of gold, dollars could be used to settle these deficits; at the option
of all Central Banks, these banks could demand gold from the United States
Treasury at a redemption rate of $35 dollars for each ounce demanded.
Thus, the United
States could pay for its trade deficits either in gold or in dollars. No
other nation was allowed to pay for its trade deficits in its own currency; for
all other nations, settlement of trade deficits had to be done with gold or
with dollars previously acquired in the course of trade with the U.S. or with
other nations who had dollars. In other words, dollars – and only
dollars – were as good as gold.
General de Gaulle
(President of France, 1959 – 1969) has been quoted as saying that this
was “an exorbitant privilege”. And so it was,
a privilege of the victor in World War II.
Under the rules
of war, a country at war may loot and plunder its enemy, if it can do so.
Booty has always been a great incentive to get soldiers to fight, and World
War II was no exception. When a war is over the looting and plunder stops and
nations renew commercial relations, exchanging their goods in peaceful
In forcing on the
Bretton Woods Agreements the acceptance of the
dollar as a means of settling international debts, along with gold, the US
established the will of a victorious power to continue to loot and plunder
the whole world.
War II was over. But in fact, World War II was not only not
over, but the US had implicitly declared war on the whole rest of the world
by imposing the dollar as a means of settling trade deficits, along with
By running huge
trade deficits which arose out of its expansion of credit and consequent
money-printing, the US was able to leverage its gold holdings and send abroad
masses of dollars to pay for imports. The exporting countries received
dollars – not gold – for their export surpluses to the US. The dollars
began to pile up in foreign Central Banks as “Reserves”. The
exporting countries, not being nuclear powers, were afraid to demand gold in
payment of their export surpluses, since such a request would very probably
irritate the great power, and nobody wanted to offend the USA.
All this export
of dollars in payment of trade deficits finally moved General de Gaulle to
demand gold for dollars held by the Banque de
France. This annoyed the US government and shortly thereafter, not
coincidentally, there was an outbreak of rioting in France which threatened
to unseat President de Gaulle, who had offended the US by simply asking for
The US, by means
of the “dollar as good as gold” provision of the Bretton Woods Agreements, has been looting and plundering
the rest of the world, non-stop, since the end of World War II. Very subtly,
based on Bretton Woods, the US has continued to act
as the triumphant victor in a war; it has never since the end of World War II
“[reassumed] among the powers of the earth, the separate and equal
station to which the Laws of Nature and of Nature's God entitle” it, as
expressed in the Declaration of Independence, 1776.
The US has not
assumed an equal station among the powers of the earth, since World War II
came to a formal end. It has continued to impose its Imperial Will upon the
rest of the world, as vassal states, and has been duly exacting tribute from
the rest of the world, by means of its paying its trade deficits with
dollars, which are nothing at all since 1971. The US did not truly
“normalize” relations, neither with the Axis powers when World
War II was declared formally over, nor with the rest of the world.
Commerce is an
eminently peaceful activity. The seller forces no one to buy; the buyer
forces no one to sell. The means of payment of commerce, since written
history began, has been either goods for goods, i.e., barter, or goods for
gold – a perfected form of barter. Silver has also worked well, as a
means of payment of commerce. But anything else, any innovation, anything
decreed to be a means of payment by anybody whatsoever, cannot be anything
but an imposition, a violation of the rules of commerce.
ruinous condition of the world’s finances and its lopsided industrial
development has not yet corrected itself. If anything, we are in the
“eye of the hurricane” for the moment.
governments in the world were to collapse, commerce would not disappear; it
would arise out of the disorder, and its money would be – gold or
silver, or both. Gold and silver are the natural means of payment for humans.
Such is the intellectual decline in the world, that those in power have
forgotten this; they and their paid lackeys in the financial press and
financial media are dreaming when they think that they can come up with some
effective but artificial, fiat means of payment, decreed by some governmental
body. Any such fiat means of payment will inevitably preserve privileges for
some, and impose burdens on others. Commerce cannot thrive under those
conditions; it will go into permanent decline, along with our industrial
fiat currencies will only have the result of pitting region against region
– as illustrated in Orwell’s “1984”. This is the
fallacy underlying all talk about a “multi-polar world” while
ignoring the need for a neutral, real and time-tested medium for exchange of
principal powers should convene and come to an agreement for the
establishment of the world’s monetary and financial system on the basis
of gold as the exclusive medium for settlement of international trade
deficits – a neutral, real and objective medium for commerce and
governments of individual nations want to allow their banking systems to
diddle with fractional banking and inflation, it is their right to do so. But
when it comes to settling accounts with other nations, they must come up with
the required gold.
Only then will we
be able to say that World War II has ended.
Hugo Salinas Price
President, Mexican Civic Association Pro
by Hugo Salinas Price