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For The Record  

FTR #179 Resurgent Fascism in Switzerland and Austria

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As the 90s drew to a close, elections in two central European countries gave evidence that fascism was alive, well and gaining in the “new” Europe of the EU. In Austria, Jörg Haider’s inappropriately named Freedom Party scored significant electoral gains, placing him in a position to wield significant political influence in that country. (Haider’s Freedom Party was founded in 1949 as a vehicle for the rehabilitation of Austrian Nazis who had served under Hitler.)

Calling his political agenda “A Contract with Austria,” Haider explicitly patterned his political program after that of Newt Gingrich.

Railing against Austrian participation in the EU and the “dangers” presented by immigration from Eastern Europe, Haider has successfully played on the fears of working Austrians that they might lose their jobs. A similar xenophobia propelled Christoph Blocher to success in Swiss elections. Like Haider, Blocher has targeted Swiss participation in the EU and “immigrants”. Blocher has also railed against Swiss membership in the United Nations and successfully exploited the resentment of older Swiss citizens about recent disclosures of Swiss collaboration with Third Reich finance before, during and after World War II. It is worth noting that Blocher’s political base consists of the German segment of the Swiss population and that the recent success of his People’s Party is seen as further distancing the French-speaking minority. Blocher has endorsed a book that denied that the Holocaust took place.

Much of the program focuses on the profound role played in Swiss finance and business by the remarkable and deadly Bormann organization. The economic component of a Third Reich that literally went underground, the Bormann group was described by one banker as “the most important concentration of money power under a single control in all of world history”.

The discussion underscores the critical role that Switzerland has played in the operations of the Bormann organization. First of all, Switzerland was one of the countries in which Martin Bormann located many of the 750 corporate fronts which served as repositories for all the liquid wealth of the Third Reich at the war’s end. Switzerland was the location of numerous holding companies, which served to mask the real ownership and control of the German economy. A holding company may only hold stock in other companies. (Actual control of the German economy is maintained through bearer bonds, which grant ownership of the corporate entity in question to the bearer of those bonds.)

Of particular note is the Interhandel company, set up by I.G. Farben luminary Hermann Schmitz to mask ownership of Farben assets. (I.G. Farben was the backbone of the Third Reich’s economy and its successor companies dominate the German economy. Farben’s Schmitz was very close to Bormann and helped set up the various corporate fronts that comprised the organization.)

The discussion highlights Switzerland’s role as the vehicle for the Bormann group’s ongoing purchase of stock in U.S. blue chip corporations and concludes with a look at Martin Bormann’s demand accounts at three key American commercial banks in the post-war period!

Discussion

One comment for “FTR #179 Resurgent Fascism in Switzerland and Austria”

  1. What’s old is new again in Switzerland. Maybe. It depends on how the Swiss decide to vote in a few weeks. So what’s old may or may not be new again. But it’s definitely still ill-advised:

    Quartz
    It seems nuts, but the Swiss may go back to a gold standard

    Written by
    Matt Phillips November 6, 2014

    The British pound hasn’t been linked to gold since 1931. The US US snipped the cord in 1971. But the Swiss only fully severed ties to gold in 1999, when voters approved a revamped constitution.

    Now, a good chunk of them seems to want to go back.

    .On Nov. 30, Swiss voters will cast ballots on a number of issues including the “Save our Swiss Gold” initiative launched by the right-leaning Swiss People’s Party. The ballot measure would instantly ban the Swiss National Bank from selling gold. It also would require that the national bank keep 20% of its assets in gold within five years. (It currently has about 8% in gold.) Oh, and it would demand that all the gold be stored in Switzerland itself. (About 30% is parked abroad right now.)

    “It’s really an attempt to return to some kind of gold standard, for those who don’t trust paper money and who want gold backing it up,” UBS strategist Beat Siegenthaler told Reuters.

    While it’s not strictly the same thing as a gold standard—for instance a classical gold standard stipulated that national banknotes be freely converted to gold at a fixed price—the Swiss gold initiative is a step in that direction.

    What’s the motivation, exactly?

    It would be one thing if we were dealing with a basket-case currency and rampant Swiss inflation. But Switzerland’s currency problem, ever since it cut ties with gold, is that the franc has been far too strong, not too weak. That’s acted as a drag on the Swiss economy’s high-value export sector. In fact, it’s been such a problem that the Swiss National Bank has taken big—some might say risky—steps to smack down the currency, the effects of which would likely be reversed if the bank were forced to buy more gold.

    And the worst part of the proposed law, according to a Swiss National Bank official by the name of Jean-Pierre Danthine, is the provision that Switzerland must never, ever sell gold again. He explained in a recent speech:

    In combination with the obligation to hold at least 20% of total assets in gold, this could gradually lead the SNB into a situation where its assets would mainly consist of gold: each extension of the balance sheet for monetary policy reasons would necessitate gold purchases, but whenever the balance sheet needed to be reduced again for the same reasons, we would not be able to resell our gold holdings. This would severely restrict our room for manoeuvre.

    From a purely tactical point of view, it would be deeply silly to double down right now on gold, which gained in value during the financial crisis but has since slid from its peak in 2011 at nearly $1,900 an ounce. Committing to buy now would essentially be a giant bailout for speculators in the gold markets. Bloomberg reports that, given the Swiss National Bank has some $544 billion in assets on its balance sheet, the gold initiative would force it to buy more than $56 billion worth of physical gold over the next five years. And if current price trends continue, the value of that gold would be falling.

    In short, the Save Our Swiss Gold initiative doesn’t make sense economically. (Luckily its chances of becoming law are slim—it would need to win outright in a popular vote, and also in the majority of cantons that make up the Swiss Federation.) But referenda like this and the one Swiss voters recently passed to clamp down on immigration really aren’t about economics. They’re about the increasingly influential rightward drift of European politics, which threatens to result—especially in the case of the Save our Swiss Gold initiative—in some really terrible policies.

    “In short, the Save Our Swiss Gold initiative doesn’t make sense economically. (Luckily its chances of becoming law are slim—it would need to win outright in a popular vote, and also in the majority of cantons that make up the Swiss Federation.) But referenda like this and the one Swiss voters recently passed to clamp down on immigration really aren’t about economics. They’re about the increasingly influential rightward drift of European politics, which threatens to result—especially in the case of the Save our Swiss Gold initiative—in some really terrible policies.”

    Yes, identity politics and a generic rightward drift appear to have once again put the European lizard brain in the driver’s seat so who knows if it will pass at this point. And while the chances of this law passing are still seen as relatively small since it lacks majority backing, keep in mind that it’s getting pretty close to having that majority:

    The Wall Street Journal
    Swiss Bank Speaks Out Against Gold Initiative
    Polls Show Vote on Gold Bullion Proposal Too Close to Call

    By John Revill
    Nov. 12, 2014 5:55 a.m. ET

    ZURICH—The head of Switzerland’s central bank has warned that maintaining stable prices would be harder to achieve if the Alpine country votes to require the bank to keep a minimum amount of gold in its vaults.

    The adoption of the so-called “Save Our Swiss Gold” initiative would be a “fatal error of judgment,” Thomas Jordan, president of the Swiss National Bank, told Swiss newspaper 20 Minuten in an interview published Wednesday.

    On Nov. 30, the Swiss are scheduled to vote in a referendum on the initiative to make the Swiss National Bank to hold a fifth of its assets in gold, a level it would need to meet within five years. The SNB currently has assets of around $550 billion.

    The requirement, the campaign for which is led by members of the right-wing Swiss People’s Party, would also prohibit the bank from selling any of its gold in the future and repatriate gold held overseas.

    A recent poll showed the vote was too close to call with 44% of respondents in favor of the initiative, 39% against and 17% undecided. A majority of voters and a majority of Switzerland’s 26 cantons, akin to U.S. states, need to approve the initiative for it to pass.

    Mr. Jordan said the proposals would damage the SNB’s ability to deal with inflation, while jobs could be endangered.

    “Too little gold in the economic crisis was never the problem, the strong franc was the problem,” Mr. Jordan said in the interview. “We had a massive overvaluation which has led to major problems.

    “We must be able to dampen this problem, but our ability to do this would be severely restricted,” he said. The initiative would force the SNB to buy gold every time it buys euros, which it has done to curb the rise of the Swiss franc.

    Posted by Pterrafractyl | November 12, 2014, 12:51 pm

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