there's more than meets the eye (1981, update 7.1.11)

INTRODUCTION

Schweizerische Interessen, NZZ-Inserat, Trumpf Buur, 26.3.88

Phone tapping, myopically accomodating hidden agendas, alien laws and foreign judges, and letting fester both some claims related to WW2 bank deposits and some stealthily outsourced and absorbed Nazi assets (IG Farben) did not bode well. Neither for the Swiss banking industry as a whole, nor for the UBS/SBC mega Swiss bank merger in particular [which however, 8 years later, appears to turn out better than expected].

To be sure, the growing headaches experienced by Swiss bankers, fiduciaries and related professionals have been mostly home-grown. At least in as much as they have grown in an environment of nearly perfected mediocrity, coupled with an ever-more society-permeating compliance mentality with regard to whatever bureaucrats here and there may decide is in society's, the market and their own interest. As trustees of the citizens of the world, they have inherited a unique, globally envied and obligeing goodwill. To which they grew accustomed, with many of them, over an extended post WWII period, not needing or even maintaining the capacity to effectively fight for their clients and achievements. What was projected as noble restraint in fact often only covered up lack of vision and confusion of mere flat earth arrogance with genuine authority - if not sheer incompetence. They not only failed to join or support the battles against, but even facilitated the ever more arrogant onslaughts of unelected out-of-control international bureaucrats and their unconstitutional lawmaking - with correspondingly self-inflicted long-term damages. This, at least, has been the case with such recent fiscal aberrations as the OECD's tax harmonzation initiatives and the IRS' QI (Qualified Intermediary) agreements. Thus they have often been successful less because than despite of themselves. And their public growling - like the widely applauded frontpage outcry in a professional newspaper "Satellization of Switzerland?" - would be more credible and have a better chance of being heeded by the political decision-makers here and there, if its authors had not, during decades, turned their back to related alarm signals. If they, too started in earnest to put their money where their mouth is. And if they thus would be rightly suspected - if not seen - to be fighting on the side of tax competition, fiscal sovereignty and genuine privacy, i.e. in the vanguard of protecting their clients and Swiss taxpayers from foreign fiscal aggressions facilitated by - of all places - the OECD, its FATF and its other anti-enterpreneurial outgrowths.

As to our own initial analysis and predictions on the UBS - and assuming that none of the bizarre gold and other tales who emerged so far from the Balkans, Italy, the Near & Far East and South Africa, will ever check out or grow beyond the US$ 1.25 billion Settlement Agreement of 26 January 1999 -, we have no problem admitting that we may have goofed (subscribing, as we do, to what we consider a major progress factor, i.e. the new/old human right to error which, however, is inseparably linked to the obligation to admit error).

Drawing on a generation of active investor protection experiences, we have arrived at these conclusions through such seemingly unrelated events as Interhandel, Rees-Bericht, Interfipol, Haile Selassie, Reza Palehvi, Ferdinand Marcos, Santa Fe, RJR Nabisco, Sasea, Rinderknecht, Swissair, etc. Most of these events are seen to be linked to a few but influential Swiss bankers and their myopically self-serving - and now badly back-firing - neglect of fundamental principles and promotion of lex americana universalis.

Interestingly, that also points to some real remedies in harmony with the fundamentals. Like the Pillory, i.e. the Internet's most peculiar debt exchange and e-commerce site. Thus legitimate claimants - and not only victims of recent historical wrongs - might effectively turn the table on their solvent debtors, whatever their names and sizes, e.g. the successors to Czarist Russia, to Nazi Germany's IG Farben assets, etc.

www.FAME.org 1981 (full text in pdf format) extract:

How Americans Lost Their Right To Own Gold
And Became Criminals in the Process

By Henry Mark Holzer

About the Author:
Henry Mark Holzer is a Professor of Law. He teaches constitutional law, administrative law, and other courses. His practice is limited to appeals and constitutional litigation.
Prof. Holzer has lectured widely on a variety of legal and law-related topics, and his articles have appeared in newspapers, popular and professional magazines, and academic journals. His most recent books are The Gold Clause (1980) and Government's Money Monopoly (1981).

Introduction
    For the first time since [James] Bond had known Goldfinger, the big, bland face, always empty of expression. showed a trace of life . . . . "Mr. Bond, all my life I have been in love. I have been in love with gold. I love its colour, its brilliance, its divine heaviness . . . .I have worked all my life for gold . . . .I ask you . . . . is there any other substance on earth that so rewards its owner?"1
    For centuries, most people have shared the fictional Mr. Goldfinger?s attitude about gold, though not necessarily for the same reasons. While gold has been much sought after, both for ornamental and industrial purposes, modern times?or, more specifically, modern governments?have taught men to value it for one purpose above all others: as a hedge against the debasement of paper money. Monetary economist Charles Rist acknowledged this phenomenon when he wrote: ?[I]n the absence of governments capable of maintaining stable money, private individuals seek to assure it for themselves, hoarding a purchasing power [gold] more stable than that of any other merchandise . . . stable money is one of the last arms that remains at the disposal of the individual to direct his own affairs, whether it be an enterprise or a simple household.?2
    Indeed, during the monetary crisis of the last several years, the price of gold soared in free world markets as more and more individuals around the world acquired gold as a hedge against actual and potential currency devaluations.3 Unfortunately, while others scrambled to protect themselves from the instability of paper money, Americans had to watch from the sidelines. For them, owning gold has long been a criminal offense, punishable by up to ten years in jail and/or up to a $10,000 fine; they also risk confiscation of the gold and a penalty of twice its value.4
    Most Americans are unaware of the existence of these harsh criminal sanctions. Fewer still, including the legal community, are aware of how?and why?Americans lost their right to own gold in the first place. The facts, which should startle layman and lawyer alike, expose the shaky legal foundation on which the gold prohibition rests: an unconstitutional arrogation of congressional power and the improper delegation of that power to the President, leading to what can be called the ?endless
emergency? rationale.

World War I: The Seeds Are Sown
    The existence of a state of war between the United States and Germany in 1917 had prompted the passage of the Trading with the Enemy Act,5 one purpose of which was to make unlawful all dealings between Americans and the enemies of the United States.6 However, an obscure subsection of the Act7 authorized the President to regulate, investigate, and prohibit ?under such rules and regulations as he may prescribe . . . any transactions in foreign exchange, export or earmarkings of gold or silver coin or bullion or currency . . . by any person within the United States . . . ?8 These sweeping new presidential powers had teeth in them: elsewhere the Act provided for severe criminal sanctions of up to ten years in prison and/or up to a $10,000 fine for violation of any decrees which the President might make under the Act.9. The net result of the Act, vis-à-vis transactions in gold, was the arrogation by the Sixty-Fifth Congress of a money power not granted by the Constitution10-and further: the delegation of that power to the Executive branch of the Government.
    The war emergency and the President's duty to fight the war provided Congress with a convenient rationale for the Act. The fact is, however, that the Constitution nowhere empowers Congress to prohibit dealing in gold-much less authorizes Congress to delegate that power to a coordinate branch of government.
    Worst of all, the power which Congress delegated to the President enabled him to make criminals out of honest American citizens whose crime would consist only of trying to protect themselves from official debasement of their money. In more fundamental terms, Americans henceforth would be ?under the gun? for exercising a fundamental, inalienable right: the right to deal with their own property as they saw fit. Gold, no matter what its special characteristics, is, after all, just another form of
property.
    If there were those who feared that Congress had more in mind than merely prohibiting transactions in gold during the World War I emergency, their concern would have been justified. On September 24, 1918, less than a year after its original enactment, and virtually on the eve of the War?s end, the Trading with the Enemy Act was amended in two important respects: not only was the wartime Act extended ?[u]ntil the expiration of two years after the date of the termination of the war between the United States and the Imperial German Government. . . ,?11 but the amendment actually enlarged the Executive?s power to control private gold. Now, President Woodrow Wilson could also ?[i]nvestigate, regulate, or prohibit any hoarding . . . of gold . . . by any person within the United States.?12 Less than two months later, on November 11, 1918, the war ended, and two years later Wilson?s power over private gold expired. Once again, Americans were under no restraints with regard to what they did with their gold. Presumably, the emergency was over.

The New Deal and the New ?Emergency?
    Franklin D. Roosevelt was inaugurated as President on March 4, 1933. Throughout the country, banks were slamming their doors on depositors clamoring to withdraw their own money, preferably in gold. For people who were seeking to exchange soft paper currency for the more stable metal?as existing law allowed, and as the Government had solemnly pledged?the new President had other ideas. On March 5, 1933, one day after taking office, Roosevelt issued a Proclamation convening Congress in Extra Session at noon on March 9, 1933, a decision allegedly necessitated by what the Chief Executive referred to vaguely as ?public interests.?13
    But March 9 was still four days away, and Roosevelt apparently was impatient to stop bank depositors from withdrawing their paper money or converting it to gold. Accordingly, the next day, March 6,1933, he took an unprecedented step. For the first time in United States history, an American president closed the nation?s banks. By Proclamation,14 he stated the following: the recent gold and currency withdrawals had been ?unwarranted? and for the purpose of ?hoarding?; speculation
abroad had caused ?severe drains? on the ?Nation?s? gold stocks; the result was to create a national ?emergency?; further ?hoarding?; and ?speculation? must be prevented and ?appropriate measures? taken ?to protect the interests of our people?;
the Trading with the Enemy Act, as amended, had given the President certain powers over private gold; and therefore, ?to prevent the export, hoarding, or earmarking of gold,? the banks would take a ?holiday? from Monday, March 6, 1933, to and
including Thursday, March 9, 1933, and that during the holiday no bank would ?pay out, export, earmark, or permit the withdrawal or transfer in any manner or by any device whatsoever of any gold . . . or take any other action which might facilitate . . . hoarding.?15 Roosevelt?s action was devoid of even arguable legal justification.
    Nowhere in the Constitution is any branch of government, let alone the Executive, given the power to close privately owned banking institutions. Nor did the Proclamation even purport to invoke constitutional authority. And despite the Proclamation?s passing reference to an alleged ?national emergency,? no war conditions were present which could have enabled Roosevelt to argue that, under the Commander-in-Chief?s ?war powers,?16 he had the authority to place in suspended animation a huge, crucially important part of America?s commercial establishment.
    The Proclamation?s reference to the World War I Trading with the Enemy Act, which had long since expired, was a strained attempt to find some semblance of legal support for Roosevelt?s unprecedented assumption of complete control over
America?s banking system.
    It is no wonder that Roosevelt immediately sent to a docile and compliant 73rd Congress, a hastily drawn but comprehensive bill to amend the moribund Trading with the Enemy Act and to attempt to secure a legal basis for the unilateral action hehad already taken.17

Retroactive Rubberstamping: The Emergency Banking Act
    The House of Representatives convened at noon on March 9, 1933. After the customary opening prayer and the disposing of certain routine ?housekeeping? matters,18 a message was received from the President19 which requested passage of
H.R. 1491.
    The bill?s preamble dramatizes the haste with which the President?s minions sought to railroad the bill through both Houses of Congress: ?An Act to provide relief in the existing national emergency in banking, and for other purposes. Be it enacted . . . that the Congress hereby declares that a serious emergency exists and that it is imperatively necessary speedily to put into effect remedies of uniform national application.?20
    In the House, Majority Leader Joseph W. Byrns, Democrat of Tennessee, asked for immediate consideration of the bill and that debate be limited to forty minutes, twenty minutes for each party. Mr. Byrns expressed the hope that under the peculiar
circumstances and under the serious circumstances which confront the country, we agree to take this bill up now, pass it, send it to the Senate so it may become a law this evening, and thus enable the President of the United States to open the banks tomorrow.21
    Next rose House Minority Leader Bertrand H. Snell, Republican of New York. After noting that ?it is entirely out of the ordinary to pass legislation in this House that, as far as I know, is not even in print at the time it is offered,? Mr. Snell, in a burst
of bipartisanship, observed: The house is burning down, and the President of the United States says this is the way to put out the fire. [Applause.] And to me at this time there is only one answer to this question, and that is to give the President what he demands and says is necessary to meet the situation. I do not know that I am in favor of all the details carried in this bill,22 but whether I am or not, I am going to give the President of the United States today his way. He is the man responsible, and we
must at this time follow his lead. I hope no one on this side of the aisle will object to the consideration of the request. [Applause]23
    Someone then produced a copy of the bill, and it was read by the Clerk of the House.24 The bill was passed.25 After a short discussion, the spectacle of what had just transpired in the House in that hour-and-a-half session was best expressed by
Congressman Lundeen:

    Mr. LUNDEEN. Mr. Speaker, today the Chief Executive sent to this House of Representatives a banking bill for immediate enactment. The author of this bill seems to be unknown. No one has told us who drafted the bill. There appears to be a printed copy at the speakers desk, but no printed copies are available for the House Members. The bill has been driven through the House with cyclonic speed after 40 minutes debate, 20 minutes for the minority and 20 minutes for the majority.
    I have demanded a roll call, but have been unable to get the attention of the Chair. Others have done the same, notably Congressman SINCLAIR of North Dakota, and Congressman BILL LEMKE, of North Dakota, as well as some of our other
Farmer Labor Members. Fifteen men were standing, demanding a roll call, but that number is not sufficient; we therefore have the spectacle of the great House of Representatives of the United States of America passing, after a 40-minute debate, a bill its Members never read and never saw, a bill whose author is unknown. The great majority of the Members have been unable to get a minute?s time to discuss this bill; we have been refused a roll call; and we have been refused recognition by the Chair. I do not mean to say that the Speaker of the House of Representatives intended to ignore us, but everything was in such a turmoil and there was so much excitement that we simply were not recognized.
    I want to put myself on record against procedure of this kind and against the use of such methods in passing legislation affecting millions of lives and billions of dollars. It seems to me that under this bill thousands of small banks will be crushed and wiped out of existence, and that money and credit control will be still further concentrated in the hands of those who now hold the power.
    It is safe to say that in normal times, after careful study of a printed copy and after careful debate and consideration, this bill would never have passed this House or any other House. Its passage could be accomplished only by rapid procedure, hurried and hectic debate, and a general rush for voting without roll call.
    I believe in the House of Representatives. I believe in the power that was given us by the people. I believe that Congress is the greatest and most powerful body in America, and I believe that the people have vested in Congress their ultimate and final power in every great, vital question, and the Constitution bears me out in that.
    I am suspicious of this railroading of bills through our House of Representatives, and I refuse to vote for a measure unseen and unknown.
    I want the RECORD to show that I was, and am, against this bill and this method of procedure; and I believe no good will come out of it for America. We must not abdicate our power to exercise judgment. We must not allow ourselves to be swept off our feet by hysteria, and we must not let the power of the Executive paralyze our legislative action. If we do, it would be better for us to resign and go home?and save the people the salary they are paying us.
    I look forward to that day when we shall read the bill we are considering, and see the author of the bill stand before the House and explain it, and then, after calm deliberation and sober judgment?after full and free debate?I hope to see sane
and sensible legislation passed which will lift America out of this panic and disaster into which we were plunged by the World War.26

    Neither ?calm deliberation and sober judgment, nor ?full and free debate? characterized what took place next in the Senate,27 where H.R. 1491?which affected ?millions of lives and billions of dollars??spent the afternoon with at least eighty
United States Senators. Seventy-three of them voted ?yea?28 and the bill, which had originated in the House at noon, passed the Senate by 7:30 P.M. Later that same night, Roosevelt approved it and H.R. 1491 became the Emergency Banking Act.29
    Fundamentally, the Act accomplished three things. First, it retroactively approved the President?s illegal action of March 6, 1933.30 (If Roosevelt had thought himself to be on solid legal ground when he closed the banks, one could ask why he thought it necessary to go to Congress in the first place. This legislative ?rubber stamp? approach to past and future executive action would be used more than once in themonths ahead.)
    Second, it amended section 5(b) of the Trading with the Enemy Act, to provide that: During time of war or during any other period of national emergency declared bythe President, the President may, through any agency that he may designate, or
otherwise, investigate, regulate, or prohibit, under such rules and regulations as he may prescribe, by means of licenses or otherwise, any transactions in foreignexchange, transfers of credit between or payments by banking institutions as defined by the President, and exporting, hoarding, melting, or earmarking of gold or silver coin or bullion or currency, by any person within the United States or any place subject to the jurisdiction thereof; and the President may require any person engaged in any transaction referred to in this subdivision to furnish under oath, complete information relative thereto, including the production of any books of account, contracts, letters or other papers, in connection therewith in the custody or control of such person, either before or after such transaction is completed. Whoever willfully violates any of the provisions of this subdivision or of any license, order, rule of regulation issued thereunder, shall, upon conviction, be fined not more than $10,000, or, if a natural person, may be imprisoned for not more than ten years, or both, and any officer, director, or agent of any corporation who knowingly participates in such violation may be punished by a like fine, imprisonment, or both. As used in this subdivision the term ?person? means an individual, partnership, association, or corporation.31
    Finally, it added a new subsection (n) to the Federal Reserve Act, giving the Secretary of the Treasury virtually unfettered discretion to compel holders of gold coin, gold bullion, and gold certificates to surrender them to the Treasurer of the United States, and to accept paper money instead.32
    Ironically, while the Act ostensibly reflected Congress? alleged concern with gold withdrawals, Congress itself took no action at all. Instead, consonant with the remarks on the floor of each House, Congress gave the President sole authority to regulate all banks and financial transactions in general, and everything concerning gold in particular (with the Secretary of the Treasury acting as his ?Requisitioner-in-Waiting?). And more: Roosevelt?s new powers far surpassed those granted President
Wilson by the World War I Trading with the Enemy Act; Roosevelt?s authority extended beyond ?time of war? to ?any other period of national emergency declared by the President.? Needless to say, just as the Act contained no elaboration as to what
the current ?emergency? was, neither did it establish any criteria by which thePresident was to ascertain the existence of any emergency?an omission which was to prove crucially important to future presidents?and to future owners of gold.

Cashing In on the ?Emergency?: Confiscation
    Passage of the Emergency Banking Act on March 9, 1933 did not end that day?s hectic activities. Still later that night, under the authority given him only several hours earlier, Roosevelt issued a new Proclamation. This one continued, in full force and
effect, ?until further proclamation by the President,? the provisions of his March 6, 1933 bank holiday Proclamation33 and the regulations and orders which had been issued thereunder.34 However, a last loophole remained to be plugged: many individuals still had gold in their possession and no requisition had yet been made by the Government. Something had to be done to keep the gold where the Government could get at it when the time came.
    Accordingly, the next day, March 10, under the authority of the Emergency Banking Act and ?all other authority vested in me,? Roosevelt issued Executive Order No. 6073.31 In addition to authorizing the Secretary of the Treasury to decide which of the nation?s banks could open, the order prohibited owners of gold from exporting or otherwise removing it ?from the United States or any place subject to the jurisdiction thereof. . . except in accordance with regulations prescribed by or under license issued by the Secretary of the Treasury.?36
    Given this frozen state of financial affairs, the President could now turn his attention to what earlier he had deprecatingly referred to as ?hoarding??i.e., the holding of gold by the people who owned it. It took Roosevelt a month. Acting under
the authority he thought had been given him by the Emergency Banking Act, the President, on April 5, 1933, issued Executive Order No. 6l02.37 Its title clearly discloses how Roosevelt intended to deal with ?hoarding?: ?Executive Order Forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates.?
    There were exceptions to this general prohibition: every American could retain a maximum of one hundred dollars in gold coin and gold certificates, rare coins were excepted altogether, and reasonable amounts of gold could be retained for use in
industry and the arts. Banks, however, were required to turn over gold coin, gold bullion, and gold certificates ?owned or received by them,? to the Federal Reserve Bank. This included not only gold owned by the banks, but also gold owned by their depositors. In short, on or before May 1, 1933, all privately owned gold in the United States (subject to a few minor exceptions) was to be confiscated by the Government.
    As compensation, the owners were to receive paper money, whether they liked it or not.38 Willful failure to submit to the confiscation was punishable by up to ten years in jail and/or up to a $10,000 fine.39
    During the next two months, additional steps were taken to implement the government?s confiscatory policy. On April 19, the Secretary of the Treasury advised that, until further notice, no further licenses would be granted to export gold for the
purpose of supporting the dollar in foreign exchange.40 On April 20, the President went one giant step further: he issued an Executive Order prohibiting the earmarking for foreign account, and the export, of gold coin, gold bullion, or gold certificates,
while, at the same time, authorizing the Secretary of the Treasury to issue licenses permitting such export under certain conditions.41 On April 29, the Secretary of the Treasury issued supplementary regulations relating to the Executive Orders of April 5 and 20, with respect to gold hoarding and the gold export embargo.42 Article 5, section 1, of those regulations provided that:
    any person showing the need for gold coin or gold bullion for a proper transaction not involving hoarding, or for gold coin or gold bullion for purposes specified in the Executive Order of April 5 1933, and not covered by the foregoing Articles of these regulations may make application to the Secretary of the Treasury for a license to purchase, or if such coin or bullion is already in his possession to retain such coin or bullion.43
    However, just the day before, on April 28, Acting Secretary of the Treasury Ballantine had established a precondition for all applicants: first, the gold had to be turned in. This precondition was, of course, couched in more legalistic terminology:
Until further notice the Secretary of the Treasury will grant no licenses for the acquisition of gold, gold coin, or bullion by persons making application for the same under the Executive order of April 5, 1933, for the purpose of meeting maturing obligations calling for payment in gold coin or bullion, within the United States or elsewhere, except where such applicants have surrendered gold coin, gold bullion, or gold certificates in obedience to the Executive order of April 5, l933.44
(full text in pdf format)

A TROJAN HORSE IN SWITZERLAND

by Jean Mussard, President, Swiss Investors Protection Association, Geneva
published as the Wall Street Journal's "longest letter ever" 12 April 1988

Your recent editorial "Spooking Switzerland?" (March 25-26) on the impending Swiss insider law stated: "A massive Orwellian monitoring and investigatory apparatus is the logical, even inevitable, requirement of the [lex Americana] kind of law Switzerland has passed." That, of course, holds also true for other countries willing to apply American standards and laws on their own soil.

So far, only West German bankers have successfully resisted the bureaucratic plain-levelling pressures emanating from Washington, Brussels and even from the Council of Europe in Strasbourg. Relying on voluntary self-regulation measures, they thus spare themselves and their clients the risks entailed in the ill-considered criminalization of yet another blown-up and ill-defined market abuse.

In this wider context of self-inflicted market wounds and a looming insider quagmire, something even more surprising was disclosed by the Basler Zeitung on March 31: It's not only the governments who increasingly keep a watchful ear on their residents' telecommunications. The comprehensive surveillance and information needs created and facilitated by the SEC-inspired insider laws can easily be covered by privately held high-capacity telephone monitoring systems. In the case of Switzerland, these systems will even be run by the big Swiss banks themselves under cover of PTT licenses used for answering machines. What's more, these systems are already mostly in place and operational, according to the Basler Zeitung.

Of course, the orally-run foreign exchange market, involving transactions of up to $300 billion a day (on a global basis), has given rise to a comprehensive recording of all related telephone communications. According to a spokesman of the Union Bank of Switzerland, its Geneva offices at present have some 400 telephone lines permanently on tapes for this security purpose. All banks directly participating in the foreign exchange market are said to maintain such professional recording systems of which more than 30 reportedly are installed in Swiss banks, covering more than 10,000 telephone lines. The resultant tapes are usually stored, which entails the risk of their detrimental use and - apparently overlooked, so far - of such tapes being subpoenaed in legal proceedings.

Until now, this massive recording seems to have caused no major technical or legal problem. With new high-performance equipment just entering the market and with digital telephone centrals with comprehensive, even remotely-controlled capabilities already being tested, the recording and storing of telephone conversations seems to have become a routine, escaping most people's attention and concern. The Volkswagen foreign exchange debacle may now become the first case where the data thus stored will serve to enlighten criminal investigators from abroad. With the insider law eventually in place, the SEC will be in a position to "convince" Swiss bankers to deliver on the promises contained in the Swiss-American Memorandum of Understanding of November 10, 1987, by availing their monitoring equipment and archives for accelerated insider investigations. Judging from past cases of myopic Swiss readiness to yield to U.S. pressures, the Swiss government will be glad to routinely facilitate the data flow the Swiss lawmakers unwittingly provided for but never intended.

As to the legality of this intrusion of privacy of unsuspecting bank clients, the official telephone directory published by the Swiss PTT discloses under the heading "Pick-up sign":

"This sign signifies that ... your communication may also be recorded on magnetic tape even if your call is being answered by a person." A few pages later the telephone book carries the notice:

"Whoever listens in on or records telephone conversations with corresponding equipment without being authorized to do so by the PTT is punishable under art.179bis and 179ter of the Swiss Penal Code. The authorization for recording telephone conversations is presumed granted if the subscriber arranged for the pick-up sign (Q) to be registered in the telephone book. The corresponding application identifying the kind and brand of equipment involved is to be submitted to the regional PTT directorate."

According to the PTT directorate general, the 18 official telephone directories list some 150,000 Swiss telephone subscribers with a Q entry, including most lawyers - and all big Swiss banks. It remains to be seen whether this is what the Swiss lawmakers really had in mind.

One of them, Dr.Peter Hefti of the govering coalition, has publicly expressed the view that any massive recording and storing of telecommunication data [like the then-planned extention of the surveillance capacity to 20,000 lines) would be "incompatible with the libertarian principles underlying Swiss society." In his parliamentary question of March 18, Dr. Hefti also asked the government about the extent to which the technical possibilities for systematic surveillance and analysis of telecommunications are presently "exploited from within Switzerland and from abroad with regard to messages exchanged between Swiss banks and lawyers and their foreign clients?" Those concerned about individual liberties and truly reliable and discreet Swiss services were not exactly reassured by the facts disclosed by the Basler Zeitung. Yet in the interest of the numerous Swiss bank clients everywhere, we are confident that both the Swiss bankers and the Swiss government will not fail to provide in time fully satisfactory answers.

In any case, clients of Swiss banks, for reasons of principle, too, may not accept the risk, however remote, that their telephone conversations with their bankers could one day be used against themselves or third parties. And they may not contend themselves with any assurances which are not promptly backed up by corresponding deeds. Clearly, criminalizing remaining liberties and helping to pierce Swiss banking secrecy ever more readily and rapidly on ever less real grounds will only feed the bureaucracy. Swiss bankers still have a chance to convince their clients that they really mean to protect their clients' privacy - by using their economic and political clout for getting the insider law before the Swiss voters. Failing that the technical and legal infrastructure playing into the hands of the U.S. Securities and Exchange Commission and other foreign snoops will grow into a Trojan Horse in the Swiss bankers' own backyard.

Editor's post scriptum (24 January 1998):

1. The "Pick-up sign" disappeared in the entry of most banks in the subsequently published telephone books, raising questions of the legality of the routine telephone monitoring by banks, particularly with today's coming into force of a revised penal code art. 179 (Leonardo Cereghetti, Patrick Umbach, "Heikle Aufnahme von Telephongesprächen - Handlungsbedarf bei Banken und Brokern", NZZ 30.Dezember 1997; Yves Lassueur, "Ecoutes illégales dans nos banques", Le Matin, 13 janvier 1998).

2. Following publication of the above SIPA letter in the Wall Street Journal, the pressure for disclosing the full extent of governmental and private eaves-dropping in Switzerland grew rapidly and seems to have contributed to the discovery of illegal telephone and other surveillance practices involving some 900,000 Swiss residents - one of Switzerland's biggest political scandals. After being given the opportunity, during some 5 years, to check one's own surveillance files (and how huge amounts of taxpayers' money were thus squandered - often with highly questionable motives, means and results), the Swiss Citizen generally is seen to have only partially regained confidence in the institutions charged with safeguarding his/her safety and welfare. Things were supposed to become more transparent and otherwise improve with the privatisation of Switzerland's telecom which, since 1 January 1998, has operated in competition with other service providers as a de-monopolized private company under the name ofSWISSCOM.

3. Thus was touched a more-than-ever sensitive cord when the Sonntagszeitung of 28 December 1997 revealed that SWISSCOM has also taken over a clandestinely implanted system providing for an apparently unauthorized massive monitoring and storing of telecommunications data on users of mobile phones. This was not exactly helped when, under the weight of public reactions, the fig-leave wide justification invoked (billing purposes) was later complemented by prophylactic and therapeutic police purposes. And when the end-of-the-year big bank letters sent to some if its local clients informed them that, for some years now, their calls to their bank may have been taped and stored for security purposes for some six months. It would be interesting to find out if and, in the event, on what legal basis any of these tapes actually found their way to local and/or foreign law enforcement officials. Well yes, we finally left the annus horribilis Orwell+13 behind us but, having apparently lost our will and/or our capacity to keep in check those charged with serving rather than spying on and controlling the only sovereign there should be, i.e. the upright Citizen, he/she will henceforth, too get what he/she deserves.

WHEN GOLDEN FOUNDATIONS ARE TAMPERED WITH

by Anton Keller, Secretary, Swiss Investors Protection Association
box 2580, 1211 Geneva 2 - e-mail: swissbit@solami.com - 5 March 1997

Heidyland has some problems. Its currency, the Swiss franc, is showing the strains of maintaining the "out-moded" gold standard in a sea of funny moneys. And under a suspicious combination of foreign pressures, its 2.59 mio kg gold reserves -the world's 4th largest (1) - are no longer tabou or out of reach of clever manipulators. Loaded with collective guilt and stampeded into hoped-to-be liberating actions, the Swiss may inadvertedly end up loosing their "family gold" and serve as models for drawing other vulnerable peoples into footing the bill for some other brave "New World Order".

After a year-long barrage of U.S.-lead attacks reviving old World War Two ghosts, the Swiss Government is seen to have finally lost its cool and to have "caved in" (2). Some suspect: to cut losses. Others go further, anticipating more revelations beyond "Jewish stories". To be sure, everyone was surprised when the Government received and promptly heeded the advice of the president of the Swiss National Bank (SNB). It opted for "a more active management of its gold reserves" (3). For their revaluation. And for using part of this accounting windfall to create a seven billion Swiss franc ($4.71 billion) "Solidarity Foundation" for Holocaust and other Swiss and foreign victim families.

But in monetary matters particularly, fiddling with the golden rules can be risky, particularly when done in haste. As precious metal, gold has served men best on women's skin, as a nest egg and as a universally accepted anonymous exchange tool. So far, no real substitute has been found for gold as reference value for international trade and commerce (4). Indeed, the world-wide effects of the short-sighted U.S.$/gold link cut of 1971 growingly indicates a return to some internationally usable real value money. Moreover, Piper of Hamlin gestures are no substitute for genuine leadership - initial applause then and now by politicians and pundits notwithstanding. Even the most innovative hat trick remains just that. And taking it for real can be costly.

Yes, Switzerland - almost by design - has traditionally been late on most big issues. It thus oftenavoided history's pitfalls, while successfully perfecting its art of mediocrity. And it developed a habit not only of curious - if not apologetic - attitudes but also of innovative yet occasionally badly backfiring excuses for its particularity, its "Sonderfall". Not surprisingly then, and less because than despite of itself, Switzerland may thus be the last gold standard bearer. For it is still constitutionally obliged to have its money covered by "gold and short-term deposits" (5). And the SNB, by law, is required to provide for a minimum coverage of 40% in gold at the legally fixed rate of SFR 4595/kg.

The Swiss franc now enjoys a gold coverage of over 150% - at current rates. Nevertheless, its legal coverage has fallen to 42%, giving the impetus to review the options. In theory, lowering the legal minimum gold coverage and/or bringing the exchange rate more in line with the market could be decided by the government on its own. Yet, given the internal and the international ramification of a gold revaluation, the Swiss Government may want to consult not only its international partners but also let its citizens decide. In practice then, a constitutional change would be needed, preceded by a thorough debate and supported by a majority of both the Swiss voters and the 26 cantons. On such a delicate and complex matter, the result at the end of a long road is far from certain. By coming out now with such a far-reaching proposal, the SNB may also have had reasons of its own.

Before looking at apparently hidden agendas pushing Switzerland to begin selling its gold treasure (approx. SFR44 billion), a glimpse at this Sonderfall may be in order. To be sure, Switzerland's still vibrant direct democracy, its time-consuming procedures and cumbersome institutions have evolved since its foundation some seven hundred years ago. And they have proven their value for respecting not only the prerogatives of its 26 sovereign republics and cantons, but for accomodating also the legitimate rights and aspirations of many language, religious and other minorities living in this alpine territory.

One glaring example of this Sonderfall attitude is Switzerland's short-sighted yet long-standing violation of other countries' fiscal sovereignty. On grounds of its special neutrality status, and effectively ignoring the general dismay of all foreign chancelleries, Switzerland started imposing its citizens abroad with a "military compensation tax" over 100 years ago. This gave some bad ideas to other taxmen in search for new revenues. Earlier this century, the U.S. started to tax its citizens abroad. And today we are faced with an almost generalized violation of some golden fiscal principles. For by now, each State's interest - and quid pro quo obligation - to protect one's own taxpayers against foreign snoops and taxation has been lost sight of, in favor of effective double tax-filing, double taxation and economic spying. For some time, this tendency - expressed most sharply in the OECD/Council of Europe INTERFIPOL scheme - was successfully fought in an alliance with the Wall Street Journal (Seth Lipsky), the International Chamber of Commerce and its national chapters, some loyal Geneva banker friends, and a handful of not so ordinary journalistic comrades (6).

Another illustration of its particularities is seen in Switzerland's traditional rejection of foreign pressures to observe individual human rights, and in its insistence to recognize only such magistrates who are familiar with local customs and know the law of the land. Already in their Federal Pact of 1291,

Switzerland's founding fathers had "agreed, set and ordered that the People of our valleys will, under no circumstances, receive or accept a judge who is not one of us, or who has bought his judgeship with money or any kind of favor on any way." (7)

Thus, it shouldn't have come as a surprise to anybody when Switzerland's body politics reacted the way it did in response to the multiple, persistent and increasingly savage attacks on the way it handled its affairs during and after WW2. The blunt rejection of foreign pressure tactics by last year's Swiss President was not meant to excuse the many aberrations of misbehaving Swiss officials and bankers. Nor was the public's generally favorable reaction to Mr.Delamuraz' overdue line-drawing an outburst of genuine anti-semitism.

To be sure, true to its traditions and for reasons of its own explained above, Switzerland has also been late in granting freedom of residency and equality of treatment to Jews; it did so only after its 1874 Constitution brought about the necessary changes. And with a dominently Christian population and a Catholic, Jesuit-influenced core making up most of its central cantons, it seems fair to say that to this day Switzerland has not been known to buck religious trends and evolutions taking place in the rest of Europe. And while it has not been spared its isolated bouts with racism and xenophopia, already the 1911 census shows that foreigners made up half the populations of Lugano and Geneva.

Indeed, the integration capacity of Swiss society has been as outstanding as it has been a key source for Switzerland's industrial evolution, cultural richness and economic wealth. Nevertheless, the Swiss body politics of both the WW2 and the present era is seen to be characterized by a trait some mistake for anti-semitism, when in fact it is a ratherre-assuring, for deeply-running feeling against foreign judges, laws and domination. This explains the Swiss citizenry's inclination to vote against anything resembling those self-serving lex americana universalis (8) - contrary governmental fits notwithstanding. For reasons of their own, which are partly explained below, the big three Swiss banks' attitude on these and related matters regularly - and revealingly - has contrasted with those of its Swiss clients. Through their actions and inactions, they haplessly helped bring about an endless stream of foreign pressures, culminating in the U.S. Senate's call for sanctions - which, according to their authors' own assessment "constitute economic warfare" (9) - and, more recently, in a publicly threatened boycott and shutdown of American branches of Swiss banks.

And that, in the end, may also provide a key to understanding what's really under way against Heidyland. Following a long tradition, official Switzerland strictly and successfully adhered throughout WW2 to its internationally recognized status of an armed, permanently neutral country. Contrary efforts by numerous personalities and groups notwithstanding, its particular historical, political and cultural background ruled out any other position.

This has to do with a deeply ingrained and time-tested reluctance to meddle in other peoples' affairs - or to officially side with any party to a conflict, be it nearby or far away. Until recently, Switzerland's predictability essentially rested on two noteworthy for highly successful foreign policy pillars (10): 1. its unique permanent armed neutrality, and 2. its international commercial links. The latter, over the past hundred years, have been promoted by a network of very liberal and still valid - but mostly forgotten and indeed often neglected - bilateral "friendship, commerce and establishment" treaties with all of its neighbors and over 20 other important trading partners, incl. the U.S. and Canada (11). The underlying policies have been deliberately chosen and are still generally supported by the overwhelming majority of Swiss citizens as continuously valid and practical alternatives to Swiss membership in NATO, the European Union and the United Nations. This is evidenced by the popular votes in favor of its army, but against denying itself nuclear arms, joining the UN or EEA, i.e. "Brussels'" climatized waiting room (12). Moreover, the peculiar Swiss neutrality status has never failed to be recognized by the powers that be - e.g. by the Powers of the Vienna Congress of 1815 which expressed their appreciation in the following terms:

"The neutrality and inviolability of Switzerland and its independence from all foreign influences are in the real interest of all of Europe." (13)

Nevertheless - and for reasons which neither the Foreign Minister, Flavio Cotti, nor the Defense Minister, Adolf Ogi, have satisfactorily explained so far - the Swiss Government has begun to move away from this golden fundament, too, questioning its future usefulness. And in its relations with Europe, it still has to re-discover what is already on the book. Which isn't very helpful, now that it finds itself compelled to address WW2 issues. Because on the neutrality question at least, its record is very solid and defendable. E.g. Switzerland is said (14) to have autonomously introduced a general arms export embargo already in spring 1939. Reportedly, this embargo was lifted 8 days after the war started, but only under pressure of the Allied governments and after consultations with Berlin. By March 1940, total Allied orders for Swiss war material deliveries reached SFR264 mio, compared to a paltry SFR150.000 worth of German orders. This situation changed in favor of Germany only when Switzerland was completely surrounded by the Axis powers whose supply of coal, petroleum and other indispensable raw materials was made wholly dependent on Swiss supplies of services and fabricated goods.

More problematic - from the present perspective - seem to be some non-official wheelings and dealings linking Swiss personalities, fiduciaries, banks and enterprises with various laundering and cover-up operations involving such outsourced "enemy property" as the American and Swiss subsidiaries of IG Farbe n, the takeover of Jewish-held German shoe and tabacco industries by Swiss firms, and the acquisition, by Swiss individuals, of looted paintings and other valuables belonging to persecuted Jews (15). These long forgotten or actively suppressed stories appear at the heart of a large-scale political and economic racketeering operation involving foreign intelligence services and secret armies, as well as pseudo-masonic, P2 and other clubs and their mostly highly-placed Swiss partners. For the last 50 years, these operations have been going on in various forms and with various effects designed to remain below the threshold of public scrutiny.

With the implosion of the Soviet Union, new vistas opened up and fundamentally new alliances became conceivable for the next century. Given the general confusion and the gaping leadership void which characterizes most chancelleries around the world, the members of the above clandestine bodies found themselves encouraged to push their designs ahead by using their existing networks and exploiting their secret WW2 files more vigorously. With its - by now - docile and most servile bureaucracy, with its huge gold cache, and with its biggest banks highly vulnerable for some of the things they did or failed to do during and since WW2, the obvious prime funding target has been Switzerland, with Portugal, the Netherlands and Scandinavian countries reportedly also on the target list as follow-up candidates.

The question has no longer been if, but when and how to proceed. Obviously, even for non-Jewish schemers and apprentice-sourcerers, the Holocaust offered the emotionally most potent and thus the most effective vehicle for "bringing Switzerland to its knees", as an Austrian journal headlined in the wake of President Koller's blockbuster speech. For them, it even offered an additional advantage: if anything turned sour, it wouldn't hurt them. And said constitutional obligation represents indeed a big, tricky and unpredictable obstacle in front of Berne's Alibaba cave.

Some argue that the string-pullers may even bank on the Swiss voters to gut this ill-considered project (16) - giving the former an excuse to organize a world-wide seizure of Swiss assets. Others bank on the - until recently - dissuasive effects of the notorious article 266bis of the Swiss Penal Code with regard to foreign publications (17). And in tandem with the traditionally docile and obedient Swiss press, self-censoring foreign journalists might indeed help this harmful project to sail through the rough waters of sceptical Swiss voters. In that case, more and more demands could be expected to be pressed ever more urgently for footing public debts and various projects. Switzerland's gold stock would thus rapidly dwindle at ever lower rates. And though the Swiss export industry might even like it for some time, this would ring the bell for the once gold-heavy Swiss franc. For it would inevitably loose its myth, respectability and much of its luster - like so many other things Swiss (18).

Still others have awoken to these sinister designs and to these dangers and are understood not to remain idle. They were alerted when the World Jewish Congress, last August, was made to be seen to have rejected out of hand a one-billion dollar solidarity project(19). That solidarity project would not have been burdened with referendum headaches. And it could have provided real, substantial and prompt relief to those families of Jewish Nazi victims who had placed their trust in vain inSwiss hospitality and Swiss bankers' reliability. Which, perversely, might be the very reason for its having been torpedoed by some who, manifestly, follow completely different, hidden agendas. This has given rise to some questions - and suspicions of a measuring stick being unfairly applied to Switzerland which the critics refuse to apply to their own government. What has been successfully obscured so far is that - penal code article 267 notwithstanding - some Swiss officials have appeared to act persistently in tandem with some of the schemers involved from both across the Atlantic and nearby.

It is indeed curious to see Swiss functionaries - again - do the dirty work for others. This time around the aims seem to be: helping Saddam Hussein to loot Iraq's Assyrian, Jewish, Kurdish and Turkoman landowners (who may not wait 50 years before they bring their compensation claims), and sparing some regimes avoidable embarrassment at the UN Commission on Human Rights, e.g. by handling the host country's visa prerogatives accordingly. This has resulted in refugee cases - e.g. Said Lahlali and his family - to be handled in ways which were thought to belong to a bygone dark chapter in European history. In this sense, the case of a former Iraqi governor and current opposition leader Mohammed Sidik Mahmoud is revealing and deserves attention. Even though the responsible officials of both Bundesrat Cotti's Foreign Ministry and Bundespräsident Koller's Ministry of Justice and Police could not be ignorant of the fact that Mr.Sidik was threatened with a death sentence in Baghdad, Mr.Sidik was arrested for deportation to Baghdad (sic!) when, on February 23, 1986, he arrived at Geneva airport with valid Swiss and French visas for human rights work at the UN. He was released to France only in extremis after a chilling 5 hours detention. Surely, the Swiss Government's related actions and inactions so far have not exactly helped its position in the on-going struggle to save what's left of, and to rebuild Heidyland's reputation.

In this light, recent statements by Switzerland's Ambassador to Washington, Carlo Jagmetti (20), and last year's President, Jean-Pascal Delamuraz (21), appear in a different color. For when the former, in his confidential report to his government, warned of "economic warfare", these words reflected not a diplomat's martial prose but the brutal reality. What's wrong was the impression that Switzerland still had the option to either avoid or resort to an economic war - when in fact such a war against Switzerland had been facilitated by Swiss officials and bankers and has been going on for years. In direct application of the preposterous colleagial advice by Switzerland's former Attorney General, this followed a script published in the above-quoted 1983 U.S. Senate report . And when President Delamuraz, in his end-of-the-year interview, finally elected to draw the line and speak of foreign pressures and intolerable blackmailings, he spoke his mind truthfully and from the people's soul. But he has yet to say so if he meant the notorious U.S. pressures and blackmailings - and the co-conspirators in the federal administration in Berne. And didn't have in mind the apparently misused Jewish organizations who are indeed most exposed to anti-semitic backlashes. For there are signs at the wall, indicating that dark forces try to use for their own ends the just cause of the Holocaust victims, in order to culpabilize and stampede Switzerland into disgorging its gold reserves. And there may be wisdom to be found in the paraphrased Irish saying: "The fact that you are rich and not paranoid doesn't mean THEY are not out to get your gold." Only, this time around, it may take more than 007 to outwit "Goldfinger".

NOTES

(1) According to the Swiss National Bank, the national gold reserves were in 1996 (tons):
USA 8148; Germany 3700; France 3172; Switzerland 2590; Italy 2590; Japan 746; Taiwan 435; China 404; Brasil 124. World's highest per capita gold cache: Switzerland 370g.

(2)    "Die Schweiz und die jüngere Zeitgeschichte - Erklärung von Bundespräsident Arnold Koller vor der Bundesversammlung", Neue Zürcher Zeitung 6.März 1997; "Schweiz in die Knie gezwungen, Regierung musste auf Druck der USA Milliardenfonds für Naziopfer einrichten", Voralberger Nachrichten (Austria), 6 March 1997; Margaret Studer, "Swiss gold reserves will be used to fund a humanitarian foundation" Wall Street Journal Europe 6 March 1997.

(3)     Dr.Hans Meyer, Chairman of the SNB Governing Board, in his Tages-Anzeiger interview: "Den Stein ins Rollen gebracht", 6 March 1997. For a first critical analysis, see: Beat Brenner, "Gold - wofür und wofür nicht?", Neue Zürcher Zeitung 8.März 1997.

(4)     Judy Shelton, "How To End Currency Gyrations", Wall Street Journal Europe, 22 January 1998.

(5) Swiss Constitution, Art.39, al.7

(6) "Convention on Mutual Administrative Assistance in Tax Matters", full text at: www.solami.com/127.htm; see also: "Off base at the OECD", WSJE editorial, 9 May 1986; H.Anton Keller "Europe's Taxmen Plot an Orwellian Scheme", WSJE 9 May 1986; other related WSJE editorials: "Waking Up to the OECD" 7 July 1986, "A Clarification" 11 July 1986, "Switzerland to the Rescue?" 1 Aug. 1986, "Sneak Treaty" 3 Dec. 1986, "Secretary Shultz's Fumble" 8 Jan. 1987, "Europe on Deadline" 6 March 1987, "Income Tax Interpol" 3 June 1987, "OECD on Tax Avoidance" 30 June 1987, "Skepticism on Tax Treaty" 14 July 1987, "The Antilles Heel" 15 July 1987, "Genscher on the Spot" 14 Oct. 1987, "Showdown in Strasbourg" 25 Nov. 1987, "Strasbourg's Next Step" 8 Jan. 1988, "Tax Treaty Countdown" 19 January 1988, "No-Show in Strasbourg" 26 January 1988, "An OECD Secret Session" 31 March 1988; Walter Steiner, "So nicht!", Handels-Zeitung, 15.Mai 1986; Alexandre Bruggmann, "Connaissez-vous INTERFIPOL?", Tribune de Genève, 20 mai 1986; Paul Betts, "OECD defends scheme to fight tax evasion", Financial Times, 3 June 1986; Nigel Hawkes, "Storm over tax sans frontiers", The Observer, 6 July 1986; Stefan Conradi, "Erpressbar", Handels-Zeitung, 24.Juli 1986; Peter Spori, "'Interfipol'.Konvention", Der Schweizer Treuhänder, September 1986; Federico Rampini, "Il Grande Fratello si Chiamo Fisco", Mondo Economico, 27 ottobre 1986; Georg Schwarz, "Die ominöse Steuerkonvention von OECD und Europarat", Neue Zürcher Zeitung, 3.Dezember 1986; Paul Bellinghausen, "Die Steuerschnüffelei wird vertagt", Rheinischer Merkur, 18.Dezember 1986; Gabriel Veraldi, "Europe: le complot de 'l'internationale' du fisc", Figaro Magazine, 28 mars 1987; Paul Fabra, "Interfipol", Le Monde, 21 avril 1987; Fabrizio Alazzi, "'No' delle imprese all'Interpol fiscale", Il Sole 24 Ore, 9 May 1987; James Morrissey, "Interpol-style network plan to trap tax dodgers", Irish Independent, 18 June 1987; William Dullforce, "European tax move angers businessmen", Financial Times, 27 June 1987; Paul Keller, "Wohlweisliche Distanzierung von einer Missgeburt", Basler Zeitung, 27.Juni 1987; .

(7)     translated and reproduced in: "On the Ideal Nation - Observations on Nation-Building and Citizen-State Relations" (.../nations.htm, .../nations.doc), CORUM paper, European Confederation Conference, Prague June 1991

(8)     Margaret Studer "Swiss Release Santa Fe Data Sought by U.S.", 21 February 1985; "A Swiss Mistake", WSJE editorial 22 February 1985; Erich Reyhl "Rechtshilfeabkommen: Zunehmende Übergriffe der USA in die schweizerische Wirtschaft", Basler Zeitung 15.März 1985; "Swiss Questions", WSJE editorial 18 March 1985; "Lex Americana", WSJE editorial 26 March 1985; Hans-Rudolf Böckli, "Lex Americana", Finanz + Wirtschaft; "Dubiose Tricks", Oltner Tagblatt 3.April 1985; "Schweizer Banken zu nachgiebig?", Frankfurter Zeitung, Blick durch die Wirtschaft 18.April 1985; "Paragraphitis", Oltner Tagblatt 2.Mai 1985; "Switzerland's Baby", WSJE editorial 24 May 1985; "TREATY NEGOTIATIONS are urged in the U.S. to end foreign-bank secrecy" WSJE 11 October 1985; Fritz Sturm, "Mettre notre justice au service des étrangers", Nouvelle Revue de Lausanne, 25 octobre 1985; ""Suckering the Swiss", WSJE editorial 4 March 1986; Karl Hofstetter "Powerplay der SEC", Handelszeitung 26.Juni 1986; "Watch Out for Mr. Shad", WSJE editorial 18 July 1986; Peter Platzer, "Was sind die politischen Materialien (noch) wert?" Schweiz. Gewerbezeitung, 26.Januar 1987; Pierre de Chastenay "Cela suffit!", Journal de l'USAM juin 1987; Stephen Wermiel "U.S. Justices Rule on Access to Foreign Data", WSJE 16 June 1987; A.A.Hermann "Long arm laws: A lesson from the US", FT 25 June 1987;Hans Rudolf Böckli, "IPR - kein gutes Ende?" Finanz + Wirtschaft, 22.Juli 1987; Arnold F. Thalmann, "Willkommen fremde Richter! Eigentorfreudige IPR-Musterschützen", Neues Bülacher Tagblatt, 7.August 1987; Kurt Huber, "Umstrittenes internationales Privatrecht", St.Galler Tagblatt, 11.August 1987; "Disconnected Dialogue", WSJE editorial 25 August 1987; "Switzerland's Justice Minister States Her Case", WSJE 29 October 1987; Anton Keller "No Justice in Swiss Insider Stance", WSJE 3 November 1987; Beat Brenner "Schweizer Antworten auf amerikanische Ideen", Neue Zürcher Zeitung 7.November 1987; Suzette Sandoz, "Y aurait-il un référendumn dans l'air?", Journal de Pully, 22 janvier 1988; "Switzerland's Last Month", WSJE editorial 9 March 1988; "Spooking Switzerland", WSJE editorial 25 March 1988; "Schweizerische Interessen",Trumpf Buur, Neue Zürcher Zeitung 26.März 1988; Jean Mussard "A Trojan Horse in Switzerland", WSJE 12 April 1988; Paul Fabra "Point d'argent, point de Suisse?", Le Monde 14 avril 1988; Livio Magnani "Sarà meno segreto il conto in Svizzera", Il Sole 24 ore 28 April 1988; "An Inside Look", WSJE editorial 4 May 1988; "Let the Swiss Vote on Insiders", WSJE editorial 28 June 1988; "The Poor Swiss", WSJE editorial, 29 June 1988; George Melloan "Switzerland's 'Glasnost' Has Roots in the USA", WSJE 29 June 1988; "La Lex Americana doit être réexaminée", ASDI, AGEFI 25 mai 1988; Stanley Penn "U.S.-Made Chemicals Supply Narcotics Labs Across Latin America", WSJE 15 July 1988; "Thornburgh's Own Laundry", WSJE editorial, Anton Keller "On Switzerland's Grievous Mistake", WSJE 29 November 1988; Kurt Speck "Musterknabe", Handelszeitung 1.Dezember 1988; Margaret Studer "Swiss Minister Said to Consider Resigning Post", WSJE 12 December 1988; "Justice for Mrs.Kopp?", WSJE editorial 13 Dec. 1988; Erich Reyhl "Kuhhandel: Ex-Bundesanwalt Walder arbeitete für die USA", Basler Zeitung 19.Jan. 1989; Ruth Marcus "Court Upholds Warrantless U.S. Searches Abroad", IHT 1 March 1990; William Pfaff "Less Than Decent Respect for Others' Sovereignty", IHT 5 March 1990; "This is Gunboat Law", IHT editorial 7 March 1990; Christian Campiche "Le secret bancaire vacille, les banquiers appellent à l'aide",Journal de Genève 17 oct. 1996; Gérard Le Roux "Que le meilleur gagne", "La confusion règne", Genève Home Informations, 30 janvier, 13 février 1997; Pierre Mirabaud "Satellisierung der Schweiz?", Finanz und WIrtschaft, 4.Mai 2002.

(9)    "Crime and Secrecy: the Use of Offshore Banks and Companies", Perm. Subcommittee on Investigations (Governmental Affairs), U.S. Senate, S.PRT 98-21, February 1983, p.137. The "coercive sanctions" proposed included: "requiring exit visas for all U.S. travelers to havens; ... denial of any international bank with a branch or subsidiary in the haven the privilege of the maintaining branches of subsidiaries in the U.S.; blocking accounts held in the U.S. by any international bank refusing to provide data on its haven branch depositor in a U.S. criminal case"

(10)     Hans Schaffner "Die Aussenhandelspolitik der Schweiz im Zweiten Weltkrieg", Festschrift für Konrad Ilg, 1947 (reproduced in: NZZ 8 Feb.1997).

(11)    "Portée des traités d'établissement", Direction de droit international publique JAAC 1977; Walter Stoffel "Die völkervertraglichen Gleichbehandlungs-Verpflichtungen der Schweiz gegenüber den Ausländern", Diss. Schulthess Polygraphischer Verlag Zürich 1979; Erich Reyhl "Ausländer hätten mehr Rechte - können sie aber nicht wahrnehmen", Basler Zeitung 11 August 1979; Iain Guest "Swiss Are Said to Deprive Foreigners of Due Rights", IHT 25 August 1979; H.A.Keller "Des traités internationaux 'grignotés' par l'administration", "La liberté d'établissement a favorisé l'essor économique de la Suisse", "Le Parlement n'est-il qu'une marionette au service de l'administration?", série, Journal de Genève 12, 14, 15 juillet 1980. http://www.solami.com/commercetreaties.htm

(12) Anton Keller "Disaffected Swiss Mount Attack on the Army", WSJE 23 Nov. 1989; "Twenty-First Century Europe", WSJE editorial, Anton Keller "The Swiss Won't Really 'Go It Alone'", WSJE 8 December 1992.

(13) Extract from the "Acte portant reconnaissance et garantie de la neutralité perpetuelle de la Suisse et de l'inviolabilité de son territoire" of 20 November 1815, CPJI, serie C, no 17-1, vol.II, 1929, p.1190/2

(14) Werner Rings, "Raubgold aus Deutschland", Chronos Zurich 1996, p.129

(15) As discussed also in foreign journals (e.g. John Harlow, "Nazi art loot in British collections", Sunday Times, 16 March 1997) the practice of accepting legitimately-held and looted art pieces as payment for goods or services rendered is neither new nor limited to Switzerland. Not surprisingly either, the art collections still stored in the vaults of some big Swiss banks are reportedly considerable - to the point that some observers are suspecting a link between the recent acquisition of a major art auctioneer by one such safekeeping bank.

(16) This view - signaling a trap - draws some support from Christoph Blocher's resounding and credible referendum threat which already virtually blocked a taxpayer contribution to the holocaust fund initiated by the big Swiss banks (with arguments becoming the heir apparent of the popular late conservative James Schwarzenbach). By analogy, a protest vote against the envisioned constitutional change cannot be ruled out. See also Blocher's "Die Schweiz und der Zweite Weltkrieg - Eine Klarstellung", SVP-Vortrag held on 1 March 1997 in Zurich Oerlikon (www.blocher.ch).

(17) Failure examples: Stephen Grey, "Swiss 'banked on murder' to keep Jewish cash", Sunday Times 9 March 1997; Tom Bower, "Blood money", Macmillan London 1997.

(18) Alan L. Otten "Swiss Banking Haven Losing Luster", WSJ 27 April 1982; W.L.Luetkens "The secrets of bank secrecy", FT 20 December 1984; Gary Putka "Swiss Banking Secrecy Isn't All It Used to Be, As Recent Cases Show - Pressure From Other Nations And Their Courts Brings Willingness to Give Data" WSJE 25 June 1986

(19) Christian Campiche "Les fonds juifs inspirent les médiateurs en vue d'un règlement définitif", Journal de Genève 19 novembre 1996. (english version)

(20) Under the title "Botschafter Jagmetti beleidigt die Juden - Geheimpapier: man kann dem Gegner nicht vertrauen", the Sonntags-Zeitung, unhelpfully, published on 26 January 1997 misleading extracts of Ambassador Jagmetti's confidential situation report of 19 December 1996.

(21) "250 mio pour un fonds d'aide aux victimes des nazis? 'C'est une rançon et du chantage'" interview du Président de la Confédération Hélvétique, Tribune de Genève 31 décembre 1997

ASSOCIATION SUISSE DE DEFENSE DES INVESTISSEURS
SCHWEIZER INVESTORENSCHUTZ-VEREINIGUNG
ASSOCIAZIONE SVIZZERA DI DIFESA DEGLI INVESTITORI
SWISS INVESTORS PROTECTION ASSOCIATION

Anton Keller, Secretary
box 2580 - 1211 Geneva 2
e-mail: swissbit@solami.com

20.März 1997

Herrn Bundespräsident Prof. Dr. Arnold Koller

zh. des Gesamtbundesrates

3003 Bern

re: herrenlose Vermögen

Sehr geehrter Herr Bundespräsident,

Wir begrüssen die von Ihrem Vorgänger öffentlich geäusserten Bedenken und seine dezidierte Zurückweisung der Zumutungen und Pressionen ausländischer Kreise, welche im übrigen mit unseren Stellungnahmen dazu weitgehend übereinstimmen (siehe: Journal de Genève, 17.10., 19.11., Wall Street Journal Europe, 31.12.96). Und wir unterstützen die von Botschafter Jagmetti vorgetragene Analyse und bedauern nur, dass er das ihm angelastete Zitat "economic warfare" nicht schon von Anfang an richtig zugeordnet hat, nämlich: "Crime and Secrecy: the Use of Offshore Banks and Companies", Perm. Subcommittee on Investigations (Committee on Governmental Affairs) U.S. Senate S.prt 98-21, Feb. 1983, S.137.

Trotz anhaltend widerlicher Umstände ist und bleibt es uns ein Anliegen, die legitimen Interessen nicht nur der in- und ausländischen Anleger, sondern auch der jeweiligen schweizerischen Institute und des Finanzplatzes Schweiz insgesamt statutengemäss zu schützen und zu fördern, soweit dies in unserer Kraft steht. Wie unsere Arbeiten belegen tun wir dies seit unserer Gründung am 10.11.1982 (der beiliegende Pressespiegel dürfte Sie und Ihre Kollegen an ASDI-Vorstösse erinnern, welche von Ihnen als Parlamentarier meist mitgetragen worden sind und eigentlich auch heute noch - ja mehr denn je - Ihre Unterstützung verdienen). In diesem Sinne bieten wir Ihnen unsere Erfahrungen, unseren Goodwill und unsere Dienstleistungen zur Analyse und Überwindung der eingetretenen Bedrohung an. Wir denken dabei besonders an mögliche und auch zur Stärkung unseres Finanz- platzes wünschbare Funktionen, z.B. zur Entwicklung und Verwirklichung von Mechanismen, welche die Gewährleistung der Rückführung von ausser Acht gefallenen Vermögenswerten an den Kontoinhaber oder dessen Erben zum Ziele haben. Eine bundesrätliche Ermutigung könnte auch bewirken, dass betroffene Institute selbst die Initiative zu jeweils geeigneten Massnahmen ergreifen würden - allenfalls noch bevor der Gesetzgeber oder die Bankenaufsicht diese Zusatzpflicht präzisiert. Unsere vielfach ausgewiesene Forschungserfahrung könnte dabei nutzbringend angewandt werden, und wir wären bereit, unseren Beitrag zu leisten.

In der Hoffnung, Ihnen und den Betroffenen auf diesem Weg dienlich zu sein, sehen wir Ihrer wohlwollenden Prüfung unserer Anregung mit Interesse entgegen und verbleiben, mit der Versicherung unserer vorzüglichsten Hochachtung,

Anton Keller, Sekretär

Schweizer Investorenschutz-Vereinigung

Beilage: Pressespiegel

WHO WANTS TO SACK HEIDYLAND?

by Anton Keller, Secretary,Philip Wainwright, Legal Adviser
Swiss Investors Protection Association, Geneva - swissbit@solami.com - 1 January 1998

After years of concentrically organized attacks against Swiss bank secrecy and, more recently, against Switzerland directly for the roles played by its authorities and numerous Swiss banks during World War 2, the damage done starts to show, both here and abroad. The apparent key targets have already lost much of their luster and strength and are in the process of reorganization. Particularly Switzerland's biggest bank, the Union Bank of Switzerland (UBS), is about to disappear in a merger with the Swiss Bank Corporation (SBC) behind a smokescreen called new economic world order.

In the case of these two venerable Swiss banks, the globalization thus invoked is seen to neither explain nor justify their planned merger - unless ill-considered short-term goals are to be pursued recklessly. E.g. for maximizing profits or repossessing by stealth some "lost", others say "too-cleverly-by-half outsourced" family silver. The whole operation may even badly backfire, and promptly at that. Indeed, becoming and staying one of the world's biggest and most successful banks isn't a matter of figures alone. In fact, those who let themselves be impressed and even guided by them are in for some rude surprises. For they are merely ephemeral reflections of and are far from being themselves among the constitutive things which make a big bank, such as client confidence as well as staff competence and stability. And thehome country's political and cultural environment must continually provide for the organic achievement and maintenance of these two intangible key ingredients. All that now seems at risk.

Symptomatically, only a couple of weeks before the public announcement on December 8, the members of the administrative boards of UBS and SBC - Switzerland's healthy, successful and already its two biggest banks - were presented with a self-destruct merger formula. Shell-shocked from 24 months of media attacks, sanction threats and destabilizing compensation claims, they grasped what they were told to be a survival ring for the ensuing superbank - and they signed on the dotted line. Some of them may not even have fully realized that for 29 out of 36 of them, they had just signed away their well-padded board seats. And that for most of their reputed institutions' highly qualified employees worldwide - with immediately disastrous consequences for both the working climate there and client/banker relations - the SBC and UBS manager's Season's Greetings were thus to be salted with a notification of their possible job loss.

For these banks' foundations and client base to grow to present dimensions it took longer than modern Switzerland has existed (it celebrates its150th anniversary in 1998). But if this ill-advised, inconsiderate and myopic merger is allowed to go through, chances are that for all practical purposes, Switzerland will disappear as an effective market place and financial power house. Accordingly, not only numerous UBS and SBC employees and clients - some already with their feet - but most Swiss citizens, lawmakers and enterpreneurs are seen to vigorously reject or to have grave reservations about this particular merger (1). For what maybe appropriate and even indicated for a micro-economic entity may be - and in the case at hand certainly is - a formula for financial disaster and social and political turmoil if applied by an entity operating on the macro-economic scale. So what's really going on here?

The full story may never be told and in some important details the jury is still out. Nevertheless, there are some interesting questions which can be raised and which point to possible answers (for further details click here or go to our home page at www.solami.com/gold.htm ):

First: What lies behind notably the Swiss, British, European and U.S. authorities' apparent reluctance to seriously look into whether this SBC/UBS merger serves anybody but those out for a fast buck, acheap takeover and a rapid reshuffling of the cards, whether it is compatible with existing banking and anti-trust laws and regulations, and whether with a price tag of some US$ 5 billion and a world-wide cut of 13000 jobs, this mega fusion's certain tangible and intangible fincial, social and political costs do not irresponsibly outweigh the all-but certain projected benefits?

Second: After the Kennedy Administration, in 1963, found it opportune and possible to lend a helpful hand for UBS to become Switzerland's biggest bank by almost doubling its equity overnight with confiscated Nazi assets (see below), is there any reason to expect the Clinton Administration to be less generous - and interested - in order to guarantee a "successful" outcome of the proposed banking merger in as much as the United States is concerned? Concretely, is there any truth beneath the rumor here that there is enough leverage in the hands of the managers of these Swiss banks to keep the Clinton Administration from more than fig-leaf-wide standing in the way of this ominous, for Nazi-trail covering merger, even if members of the U.S. Congress were to raise serious questions?

Third: What's really behind this foreseeably self-destructive business of focusing the new bank's energies on exotic high-return, i.e. commensurately high-risk operations? Are these the proper lessons to be drawn from the demise of the Barings Bank and from Zurich's most recent bank disaster, the Rinderknecht Private Bank (2)?

Let's begin with the last question. At their press conference on 8 December, the managers of the future UBS projected a 15 to 20% annual return on equity - a multiple of their past performances (if, be it for reason of ignorance or hidden agendas, one continues to ignore the growth of their hidden reserves and related shareholder rights, the consideration of which, in the case of UBS and for the period of 1980 to 1997, would bring the real annual profits for holders of bearer shares on average to 15.85%, according to calculations furnished by UBS, thus casting a further shadow over some claims). In an environment of one-digit equity/earning ratios and productivity growth rates by the productive sectors - and be reminded: the natural growth of most trees is about 4% - both this aim and the quantum leap to get there represent a sure-fire recipe for further soap bubbles, financial disasters and corresponding disruptions. This is the more so in the cases of SBC and UBS as they have organically grown to their present, macro-economically relevant dimensions and as they have provided - and are expected, but may see fit not to continue to provide - traditional and typically solid Swiss banking functions on both a national and an international scale. True, some of these functions are less profitable. But the health of and prospects for a multitude of smaller Swiss banks clearly shows that they are not unprofitable if properly handled. Moreover, they are time-tested, ever more needed and the more appreciated the world over as they offer an effective defense against lex americana universalis.

Unwittingly - or linked with hidden agendas - such greedy aims inescapably favor and lead to shortsighted, inconsiderate and unusually risky management strategies, policies and decisions. Such a short-term rip-off shareholder value focus thus risks to expose and seriously undermine not only the foundations and client basis on which both SBC and UBS have been able to build over generations. But it also endangers the interests of their medium and long-term owners, i.e. the very shareholders which no company can do without if it is to last, and that requires it to act the more socially and politically responsible as it operates on a macro-economic scale.

The economic dimensions of the proposed merger go far beyond Switzerland. So much in fact that Switzerland's political class and even the Swiss government (wielding, if it wanted at all, only meek anti-trust powers) find themselves overtaken by events, cornered and unable to seriously investigate and, in the event, seek to attenuate if not prevent this merger's multiple and far-reaching consequences on Heidyland's social, economic and political fabric.

Of course, these economic - no less than the social and political - dimensions should mobilize rather than mute the powers that be. Yet, hand-wringing is what is so far seen to prevail in both the Swiss and the U.S. political establishment while serious and wide-open legal, economic and political questions remain unanswered. Revealingly, the managers of this outlandish mega deal are super confident that - once again - the U.S. Departmernt of Justice will put up no significant roadblocks, with the deal sailing through and the United Bank of Switzerland, warts and all, in place and operational next May. How come?

In spring 1996 we publicly discussed, and last year we published on the Internet, some still reverberating and more or less notorious links between Nazi Germany and either of the Big Swiss Banks. Others (3) have also chipped in on this old story of the origin of much of UBS' equity (4) which is seen to be linked to so-called former"enemy assets" (IG Farben, GAF, IG Chemie, Interhandel). Basically, these assets abroad were blocked by the WW2 allies. Yet some of them had escaped confiscation with the apparently witting help of the Swiss government acting with the knowledge, if not at the instigation, of U.S. authorities (prior to the United States entering WW2, John Foster Dulles, who later became Secretary of State under President Dwight D.Eisenhower, served as IG Farben's lawyer in the U.S. (5), while during WW2 his brother Allan Dulles headed the European bridgehead of the CIA's predecessor, the Office for Strategic Services in Berne). At any rate fully aware of this background and for reasons of its own, the Kennedy Administration later cut a deal with the Swiss - reportedly (5) by way of the good offices of Count Radziwill, a relative of President John F. Kennedy's wife, and UBS' then-President Alfred Schäfer, to be precise. Since the German reunification, trusteeship claims - e.g. by the IG Farben AG in liquidation and by the formerly East-German IG Farben - are seen to somewhat disturb this cozy arrangement. During the Cold War these claims could safely be ignored or considered as "settled". And before the Wall came down, simple stone-walling by the Swiss Federal Council still helped to effectively derail related proceedings before the German Courts (5). Since then, things have changed somewhat - even unwittingly producing some strange bedfellows,if the most outspoken and persistent foreign critics of UBS in particular are indeed acting spontaneously and in the true interest of the victim families they represent. At any rate, some recent - unwittingly ill-informed? - operations directed against UBS' management, policies and present ownership, particularly those from within Switzerland (Martin Ebner, etc.) also appear to make a lot more sense when considered on this background. But then again, who really cares what's really going on?

In the service of active investor protection for over 17 years, we are, of course, greatly concerned about the effects of ill-considered, excessively risky and probably failing mega mergers on the capital markets of Switzerland and abroad. We are all in favor of cutting dead wood, streamlining operations and combining resources - naturally not as ends in themselves but as means to serve the end-users with ever higher quality products at ever lower unit costs and with due consideration of all relevant factors. This being said, e.g. in the case of the Glass-Steagall Act, we have difficulty seeing the U.S. lawmakers' original intent and purpose still heeded with ever bigger mergers at the heart of the economy. If that's what deregulation and globalization essentially is reduced to and made to be, with healthy, innovative and productive forces sacrificed inconsiderately to this trendy fashion of the latest passing guru, the powers that be are inviting contagious financial disasters and political upheavals for some time to come. I.e. until the pendulum will have swung back to less self-serving and destructive, back to more human-centered rational forms of organizing the world's productive forces.

In the case at hand, we are also concerned that opportunities to get to the bottom of the Nazi legacy and to obtain prompt and fair settlements on the outstanding issues will again be squandered. We worry that present efforts will in effect be squashed behind old and new smokescreens - perversely once again on the back of many holocaust victims and their families. As indicated above, we are not satisfied that less competition for banking and financial services and ever bigger and more anonymous trustees for one's savings is in either Swiss or any foreign citizen's interests. And we are thus a little worried about some related sheer, ripple and stampede effects on the Swiss banking and financial services industry no less than on that of other European countries and the U.S. in particular. Which is what we understand the EU Commission to look at right now for their jurisdiction, and which we would like to see also with regard to other eventually affected markets.

Previously considered mergers on either side of the Atlantic may also serve as a source of inspiration (e.g. Aerospatiale, Boeing/McDouglas, BT/MCI, etc.). In some of those cases, timely raised questions by alert lawmakers in particular have helped to overcome Titanic blindness and to improve merger conditions or even prevented inadequately prepared and balanced plans from going through. As pointed out above, some questions related to this dangerous and anyway un-Swiss Babylonian Tower project are still unanswered, and their timely examination may still spare all of us the havoc which is seen to be under way under a fashionable but ill-considered, misleading and even blinding frenzy called globalization.

____________________

(1)    some authoritative critical voices speaking out also for many professionals:
Daniel Zuberbühler, Director of the Swiss Banking Commission, interviewed by Wolfgang Hafner, "Es hat sich alles zugespitzt",Tages-Anzeiger, 23.Dezember 1997;
Hans-Rudolf Böckli, "Der Gesetzgeber vor dem Konzentrationsproblem", Wirtschaft und Recht, #2, 1961, S.95ff., "Zum Konzentrationsproblem", ibid. #3, S.196ff;
Beat Brenner, "Der Meinungswandel",Neue Zürcher Zeitung, 9.Dezember 1997;
Hans-Peter Platz, "Kommt jetzt die Firma Schweiz?", Basler Zeitung, 9.Dezember 1997;
Thierry Meyer, "Qui nous dit aujourd'hui que les grandes banques ne se trompent pas sur le demain?", Nouveau Quotidien, 9 décembre 1997;
Alain Fabarez, "Délocalisation rampante",AGEFI, 9 décembre 1997;
Antoine Exchaquet, "Fusion logique et ... tragique!",Le Matin, 9 décembre 1997;
Holger Stelzner, "Bankenmonopoly",Frankfurter Allgemeine Zeitung, 9.Dezember 1997;
Daniel Hug, "UBS - für wen?",Der Bund, 9.Dezember 1997;
Ignace Jeannerat, "Mammouth écrase les petits",Journal de Genève et Gazette de Lausanne, 9 décembre 1997;
Helga Einecke, "Wettlauf der Banken im Euroland",
Bernadette Calonega, "Das Schweizer 'Power Game'",Süddeutsche Zeitung, 9.Dezember 1997;
Christoph Blocher, befragt von Peter Morf, "Globales Denken ist notwendig", Peter Bohnenblust, "Weiterdenken", Erich Zoller, "Bedauerlicher Liquiditätsverlust - Als Folge der Grossbankenfusion verliert der Kapitalmarkt einen wichtigen Mitspieler", KK, "Eine neue Marktkraft mit alten Problemen - Auswirkungen der Fusion UBS/SBV auf den Hypothekar- und Immobilienmarkt",Finanz + Wirtschaft, 10.Dezember 1997;
Kurt Speck, "Ein Graben in der Bankenlandschaft - neu geschürte Ängste nach der Megafusion",Alain Zucker, "Fusion ist ... wenn jeder gegen jeden kämpft - Die Praxis zeigt:Aktionäre, Mitarbeiter und Kunden profitieren nicht",Peter Vollmer, "Nur noch wenige (auswärtige) Chefetagen entscheiden über die Existenz unserer Betriebe", Peider Signorell, "Gier tut nicht gut", mn, "Was die Analysten meinen",Weltwoche, 11.Dezember 1997;
Gérard Le Roux, "Une fusion explicite",GHI (Genève Home Informations), 18 décembre 1997;
André Vallana, "En trois ans, la face des banques suisses a changé",Jeudi Économie #206, Journal de Genève et Gazette de Lausanne, 18 décembre 1997;
Werner R. Müller, "Verspieltes Vertrauenskapital",Basler Zeitung, 29.Dezember 1997;
Jean-Paul Coeytaux, "A la merci des pirates",Le Matin, 2 janvier 1998;
Boris Borcic, "UBS + SBS = CH - GE", GHI, 8 janvier, 1998;
Jean-René Hulmann, "Lettre à ma banque", Journal de Genève et Gazette de Lausanne, 11 janvier 1998

(2)     Res Strehle, "Das Schwarze Loch", Tages-Anzeiger Magazin, #46, 15.November 1997

(3)    e.g. Sebastian Speich, "Geheimakte bringt SBG ins Schleudern - Nazi-Vermögen: Bundesrat muss jetzt die brisante Interhandel-Akte öffnen", "Verschlusssache Interhandel",CASH #4, 24.Januar 1997; Shraga Elam, "Interhandel: Vertuschen nützt nichts mehr", CASH #10, 7.März 1997; Daniel Hug, "Pourquoi le dossier <UBS-Interhandel> est-il gardé secret depuis plus de cinquante ans?" Nouveau Quotidien, 17 mars 1997

(4) not to speak of the Nazi-linked Eidgenössische Bank which UBS swallowed in the wake of WW2: Shraga Elam, "Eine Leiche im Keller der UBS - Die Eidgenössische Bank, 1945 von der SBG übernommen, spielte eine zentrale Rolle bei den Nazi-Geschäften", CASH #45, 7.November 1997

(5) Shraga Elam, "Verschlungene Pfade zum grossen Geld - Auf welchen Umwegen die Schweizerische Bankgesellschaft an die Gelder der I.G.-Farben kam und dadurch zur Nummer 1 unter den Schweizer Grossbanken wurde", CASH #10, 7.März 1997

ENFIN QUELQU'UN A COMPRIS

Gérard Le Roux, Genève Home Informations (GHI), 30 avril 1998
GHI a souvant tiré la sonnette d'alarme.
Les attaques contre la Suisse ont des raisons purement financières.
Le très sérieux journal financier l'AGEFI n'écrit pas autre chose.

Voici l'éditorial de notre confrère de l'AGEFI qui décrit très exactement les vraies raisons de l'attaque contre la Suisse et de son déroulement inévitable et que GHI essayait de vous prédire depuis 3 ans.

L'insulte américaine

<Ce n'est pas un hasard si un journal sérieux comme le Wall Street Journal publiait, hier, un éditorial assassin comportant un titre aussi offensif "Est-ce que le monde a encore besoin des Suisses" (1) et récitant la litanie des poncifs et des accusations les plus éculés à l'encontre de la place financière suisse, à travers le reproche de conserver le secret bancaire à des fins fiscales (2). L'introduction est éloquente: "le message sous-jacent à la controverse sur le fonds de l'holocauste est que le monde a le sentiment de ne plus avoir besoin des Suisses".

<Sa conclusion tombe comme un fruit mûr: "Faîtes descendre les Suisses de leurs montagnes et joindre le monde" (3). Le ton fait cruellement penser aux années 60, aux virulentes attaques contre l'impérialisme soviétique. Il s'agit clairement d'une entreprise de déstabilisation psychologique conduite dans le but de niveler le droit suisse, l'adapter non à la mondialisation mais à l'américanisation de la planète. Le butin visé par l'attaque n'est pas mince. Il est d'ailleurs cité par l'éditorialiste, les 2000 milliards de dollars d'actifs privés gérés dans notre pays. Toute personne qui a suivi les méandres de notre justice ces trois dernières années comprend la tactique de l'artichaut employée à propos de la place financière suisse.

<Citons brièvement quelques-uns des principes disparus au nom de la morale et du politiquement correct, l'émergence du principe d'extra-territorialité, la reconnaissance d'un principe de responsabilité collective, l'inversion de la charge de la preuve (...). Notre droit est de plus en plus "certifié américain". Reste, dernier village gaulois à résister à l'envahisseur romain, la levée du secret bancaire pour des raisons fiscales.

<Etonnamment, ce genre de discours trouve un écho certain en Suisse, aidé par un sentiment de culpabilité entretenu par les médias à propos de notre histoire. On citera par exemple l'émission sur le rôle des Etats-Unis pendant la Deuxième Guerre et son attitude scandaleuse par rapport au peuple juif, que l'on préfère passer au milieu de la nuit, alors que le comportement de certains Suisses, tout aussi détestable, tombe par hasard à une heure de grande écoute. La campagne psychologique marche à un rythme étonnant. L'affaiblissement moral poursuit son bonhomme de chemin. Mais lorsqu'un journal comme le WSJ pose la question de l'utilité d'un pays, cela démontre que les attaques sur le système financier vont redoubler de force.

<Depuis la fin de la guerre froide, la stratégie du pouvoir politique américain, et l'ensemble de ses instruments, a été réorientée à des fins économiques. Sous les traits de la morale, la première puissance au monde est parvenue à changer notre droit, à revisiter nos principes, comme celui de la protection de la sphère privée. Cette entreprise rencontre un franc succès. Le politiquement correct est même accepté par certains banquiers qui croient au miroir aux alouettes d'une stratégies on-shore banking dans le monde, c'est-à-dire d'une gestion de fortunes privées dans le pays même du client. L'espoir fait vivre.> C'est signé Emmanuel Garessus

Méfiance

Chaque mot de cet article exprime les craintes que je vous ai répétées à des dizaines de fois. La semaine dernière, après deux jours de séminaire sur les lois imposées par la Suisse aux banquiers et gérants de fortune concernant le blanchissement de l'argent, je ne peux que confirmer que quasiment tout ce qui peut faire écrouler une partie importante de l'économie suisse est en place. Si ces dispositions sont destinées, médiatiquement parlant, à simplement réduire le blanchissement de l'argent sale, elle s'appliquent en réalité à toute opération ou maintien d'argent considéré un crime pénal par la loi suisse. Chaque banquier ou gérant a le devoir de le dénoncer s'il a des soupçons fondés (et ceci n'est pas défini), il est tenu de connaître non seulement son client mais la bonne marche de ses affaires. Il ne peut pas se contenter d'une explication verbale sur la provenance des fonds ni de son affaire mais il est désormais tenu de les vérifier. Vous voyez comme c'est pratique ou possible? Il est dans l'obligation s'il a des soupçons de faire bloquer le compte de son client aussi bien que de le dénoncer sinon il est considéré comme complice. Si par hasard, on trouve après maintes recherches "approfondies" que le client est innocent, le gestionnaire n'est pas protégé par la loi contre une action juridique pour atteinte à l'honneur etc. Le client devient en passant ex-client. Génial? La Suisse peut porter le sigle Blanche Neige? Les gangsters peuvent aller ailleurs! Notre virginité est notre renom?

Eh bien mes chers lecteurs, ce procédé poussé par les USA n'est que le début des plus grands hold-ups jamais imaginés. Les diverses allocutions, durant le séminaire AGEFI, ont bien fait sentir que la Suisse, "poussée par certains partis politiques" va bientôt voter pour que le délit de ne pas déclarer tous ses revenus ou ses avoirs soit un crime (à ne pas confondre avec la fraude fiscale où on truque un bilan ou une facture, ce qui est déjà pénal). De fait, tout argent déposé par les étrangers pour éviter la rapacité du régime fiscal de leur pays et qui est considéré comme un crime chez eux devient un crime en Suisse. Ainsi le banquier suisse et gérant deviendra complice donc bagnard si un juge suisse trouve que la définition d'un crime fiscal par Stalin, Hitler, Wilson, ou Olav Palme est raisonnable. Fabuleux! Ils le méritent. OK.

La vraie fonction du secret bancaire

Mais lorsque les banques suisses n'offriront plus aucune sécurité, elles perdront aussi leur attrait. Les impôts, les frais bancaires déjà très lourds et applicables aux clients les pousseront vers d'autres pays et c'est là où les USA feront en sorte que les lois fiscales, chez eux, soient infiniment plus agréables pour l'étranger. Ainsi la chasse d'eau sera tirée!

Ce qui a été soigneusement écarté, c'est la vraie fonction du secret bancaire c'est-à-dire la sauvegarde du patrimoine de millions de gens qui à tour de rôle dans le monde ont été spoliés chez eux par des politiciens devenus fous et qui ont trouvé une bouée de sauvetage en Suisse. Ce ne sont pas seulement les riches, mais les modestes et surtout avant tout la politique suisse qui a servi de garde-fou contre l'excès de certaines politiques ruineuses et qui jusqu'à présent continue de fonctionner.

C'est bien ce dernier point qui est visé à la fin et c'est bien cela qui vous concerne tous petits et grands ici et ailleurs car mis à part ceux qui ont été achetés par les USA c'est vous chers lecteurs, petits ou moyens qui paierez les pots cassés. (Les grands partiront). Si dans les articles de GHI on insiste tellement sur le déroulement que nous avons décrit ce n'est pas pour pavoiser d'avoir eu raison mais il ne faut absolument pas que lorsque l'inévitable arrivera, ce soient des innocents individuels ou une communauté, même si certains ont été manipulés, qui soient tenus responsables pour une politique bien précise d'un Etat.

L'ICONOCLAST OBSERVE (30 avril 1998):

1. Voire aussi la réponse du publiciste suisse Klaus Stoelker, publiée dans l'édition européenne du Wall Street Journal du 28 avril 1998.

2. Curieusement, ce reproche tombe en parallèle et se trouve accentué dans le dernier rapport du notoire Comité 8 de l'autrement très sérieuse Organisation pour la coopération et le développement économique, OCDE, de Paris qui - après son échec total, dans les années 80, avec son projet orwellien INTERFIPOL d'une convention d'assistance administrative en matière fiscale - persiste à confondre la criminelle évasion fiscale avec l'évitement fiscale bien que ce dernier constitue un facteur essentiel de l'économie du marché et de la souveraineté fiscale de tout Etat indépendant et digne de ce nom; tant que les autorités politiques n'auront pas effectuées les changements qui s'imposent dans le cahier de charges et dans l'orientation de ce comité de l'OCDE, ce sera lui et non le secret bancaire autrichien, luxembourgois, suisse ou autre qui causera des effets pervers et en effet fortement dommageables non seulement pour les fiscs mais surtout pour les contribuables des pays qui continueront à souscrire à des thèses opportunistiques et depuis longtemps discréditées de quelques apparatchiks myopes et irréductibles - voirPaul Coudret et Antoine Bosshard, "L'OCDE s'attaque au 'braconnier' fiscal suisse",Le Temps, 29 avril, 1998.

3. En effet, on est loin où, dans les années 80, sous la direction de Seth Lipsky et de Peter Keresztes, le Wall Street Journal Europe (WSJE) et d'autres journaux étrangers - mais non les grands journaux suisses proches des banques, et très peu d'autres journalistes suisses - avaient mené combat contre les différentes lex americana et - en vain - ont imploré les parlementaires et banquiers suisses de se dresser sans vergogne contre toutes pressions émanent de la SEC et d'autres sources américaines, et de maintenir avec dignité, détermination et force leurs spécificités et leurs cultures bancaires, y compris notamment le secret bancaire suisse. Or, il se trouve que le WSJE n'est toujours pas sorti des chiffres rouges et que quelques membres de la famille des propriétaires pourraient donc être ouverts à des nouvelles idées. Voilà donc une occasion pour une nouvelle alliance vers de nouveaux horizons qui s'ouvre aux vrais entrepreneurs visionnaires et soucieux de l'avenir du marché financier suisse.

ASSOCIATION SUISSE DE DEFENSE DES INVESTISSEURS
SCHWEIZER INVESTORENSCHUTZ-VEREINIGUNG
ASSOCIAZIONE SVIZZERA DI DIFESA DEGLI INVESTITORI
SWISS INVESTORS PROTECTION ASSOCIATION
box 2580 - 1211 Geneva 2, e-mail: swissbit@solami.com, 022-7400362

Philip Wainwright, Legal Advisor

PRESSEMITTEILUNG - 28.Juni 1998
zum vorzeitigen Vollzug der UBS-Fusion

Wir begrüssen die in diesem Vorhaben eingeflossenen Bemühungen zum rechtsstaatlichen Abbau von Altlasten als Voraussetzung für eine erfolgreiche Firmenzukunft. Wir stellen jedoch fest, dass es auf dem eingeschlagenen Weg bisher offenbar nicht gelungen ist - und vielleicht auch nicht gelingen kann -, die berechtigten Interessen der betroffenen in- und ausländischen Kreise befriedigend abzudecken. Dies betrifft nicht nur Kunden- und Mitarbeiteranliegen, sondern auch Interessen von Aktionären insbesondere der Schweizerischen Bankgesellschaft.

Mehrere Verfahren sind noch vor Basler und Zürcher Gerichten hängig. Sie scheinen nun durch den Fusionsvollzug präjudiziert zu sein, was auch mit unserem Rechtsempfinden unverträglich wäre. So liegt z.B. in bezug auf die Durchführung einer Sonderprüfung und eine vorläufige Sperrung des Handelregisters bereits eine Berufung ans Bundesgericht vor. Uns ist jedenfalls kein bundesrätlicher Notrechts-Entscheid bekannt, welcher die rechtshemmende Wirkung aufheben könnte, welche diesem und anderen Rechtsschritten von Gesetzes wegen zukommt. Soweit wir dies beurteilen können ist es das Ziel all dieser Rechtsschritte gewesen, vor Vollzug der geplanten SBG/SBV-Fusion die zahlreichen Vorwürfe von Verlustvertuschungen, Bilanzmanipulationen, illegaler Kapitalherabsetzung und weiterer schwerwiegender Gesetzes- und Statutenverletzungen richterlich überprüfen und allenfalls ausräumen zu lassen. Dass dieses auch dem Finanzplatz und Rechtsstaat Schweiz gut anstehende Ziel wirksam hintertrieben werden konnte, gibt zu mehr als blossem Bedauern Anlass. Und es ist leider auch kein gutes Omen für ein sich als Träger der schweizerischen Wirtschaft und als Gütezeichen schweizerischer Werte verstehendes neueingekleidetes Finanzinstitut mit weltweiter Ausstrahlung.

Die noch stärker als bisher auf das Ausland ausgerichtete und davon abhängige neue UBS bedarf der Lizenzierung durch die zuständigen Behörden des jeweiligen Gastlandes. Wie auch hierzulande üblich, sind solche Lizenzen regelmässig davon abhängig, dass die Heimlizenz des Mutterhauses gültig und zweifelsfrei in Übereinstimmung mit den Gesetzes des Stammlandes zustandegekommen ist. Nachdem einschlägige Fragen vor Schweizer Gerichten derzeit geprüft werden - und der Ausgang einer rechtsstaatlich einwandfreien Prüfung dieser Fragen alles andere als gesichert gelten kann -, muss damit gerechnet werden, dass ausländische Bankenaufsichtsbehörden den laufenden Vorgängen besondere Aufmerksamkeit zuteil lassen und allenfalls entsprechende Konsequenzen ziehen werden. Dies vielleicht sogar als Ersatz für andere, vom Standpunkt des Völkerrechts eher umstrittene Massnahmen und Auflagen. Auch unter diesem Gesichtswinkel könnte der in der obigen Berufung ans Bundesgericht vom 25.Juni 1998 nachzulesende Schlussatz sich noch als guter Rat erweisen:

"Wer sich sodann in verantwortlicher Position mit einschlägigen Rechtsverweigerungen assoziiert sieht, mag gelegentlich auch bedenken, ob und wieweit eigenes Lassen und Dazutun dem um sich greifenden Eindruck einer Bananenrepublik Vorschub leistet."

PRESS RELEASE - June 29, 1998

Unduly Hasty UBS Merger

If figures alone could reliably tell the story, UBS, the "Swiss" mega bank emerging from combining the resources of the venerable Swiss Bank Corporation and the Union Bank of Switzerland, initially had a lot going for it. But in finance, too, even adding one and one sometimes is less than two. Already UBS's combined shareholder capital is some 20% smaller than the sum total of their constituant parts. Its competence backbone, i.e. its work force, is planned to be slashed by some 13'000. And the so far successfully hidden losses of Switzerland's biggest banks is yet another story. But even worse news may be in the offing on account of intangible, notably legal factors involving and eventually affecting such key values as reliability, strict observation of the rule of law and client confidence, all of which make up a bank's standing and prospect. For indications are that Swiss authorities and even Swiss courts have been bending over backwards to accomodate this company merger, warts and all, and to pay little more than lip service to Switzerland's time-honored banking culture and legal traditions.

Since the announcement of the mega bank merger, small shareholders have valiantly fought what they see as a generally damaging aberration - not least because of the already difficult-to-master Year 2000 computer bug. They have done so in- and outside of Switzerland on both the political and the legal front. The local and foreign press has been awash with allegations of past and present management wrong-doings, huge losses in the derivatives and the Asian credit market, manipulation of the merger balance statement, illegal shareholder capital reduction and other serious violations of both Swiss law and the bank statutes. Several court cases are thus still pending in Zürich, Basel and Lausanne. These cases are understood to have been brought in order to reliably clarify these allegations before the planned merger may be consumed. A Swiss first which is well under way - i.e. a class-action suit, requiring the support of at least 2 million UBS shareholder capital - seeks to have a juge order a special investigation. Also, the petitioners have regularly asked the Court for a provisional prohibition to block the registration of the new UBS in the registry of commerce. Some procedures are understood to even benefit from a suspensive effect clause provided by the law, and the Swiss Federal Council is not known to have used its emergency powers for suspending the Swiss Constitution in order to allow the UBS merger to go through. Yet, somehow, the powers that be seem to have managed to make things happen anyway - as if Switzerland were a Banana republic.

The new UBS is planned to be particularly active outside of Switzerland. It will be able to do so only on the basis of corresponding host country banking licences. As is also customary for foreign banks operating in Switzerland, the host country's licence regularly depends on the home country licence's continued validity as well as its acquisition in full harmony with the home country's laws. So far, the UBS has not shown an interest to have Swiss courts reliably and promptly examine and eventually put aside the many serious allegations surrounding its merger project. In as much as they have still confidence in Swiss courts and supervisory institutions, foreign banking regulators may be expected to follow the current Swiss court procedures attentively, perhaps even encourage the UBS to be more cooperative at least on that front. Lest they prefer to resort to more direct constraining measures, such as sanctions which, of course, are seldom mutually helpful and often violate not only the rules of international law but undermine a long-standing cooperation which has proven its worth and mutual benefit.

October 24, 2005

The Cost of Gold
Behind Gold's Glitter: Torn Lands and Pointed Questions

By JANE PERLEZ and KIRK JOHNSON

There has always been an element of madness to gold's allure.

For thousands of years, something in the eternally lustrous metal has driven people to the outer edges of desire - to have it and hoard it, to kill or conquer for it, to possess it like a lover.

In the early 1500's, King Ferdinand of Spain laid down the priorities as his conquistadors set out for the New World. "Get gold," he told them, "Humanely if possible, but at all costs, get gold."

In that long and tortuous history, gold has now arrived at a new moment of opportunity and peril.

The price of gold is higher than it has been in 17 years - pushing $500 an ounce. But much of the gold left to be mined is microscopic and is being wrung from the earth at enormous environmental cost, often in some of the poorest corners of the world.

And unlike past gold manias, from the time of the pharoahs to the forty-niners, this one has little to do with girding empires, economies or currencies. It is almost all about the soaring demand for jewelry, which consumes 80 percent or more of the gold mined today.

The extravagance of the moment is provoking a storm among environmental groups and communities near the mines, and forcing even some at Tiffany & Company and the world's largest mining companies to confront uncomfortable questions about the real costs of mining gold.

"The biggest challenge we face is the absence of a set of clearly defined, broadly accepted standards for environmentally and socially responsible mining," said Tiffany's chairman, Michael Kowalski. He took out a full-page advertisement last year urging miners to make "urgently needed" reforms.

Consider a ring. For that one ounce of gold, miners dig up and haul away 30 tons of rock and sprinkle it with diluted cyanide, which separates the gold from the rock. Before they are through, miners at some of the largest mines move a half million tons of earth a day, pile it in mounds that can rival the Great Pyramids, and drizzle the ore with the poisonous solution for years.

The scars of open-pit mining on this scale endure.

A months-long examination by The New York Times, including tours of gold mines in the American West, Latin America, Africa and Europe, provided a rare look inside an insular industry with a troubled environmental legacy and an uncertain future.

Some metal mines, including gold mines, have become the near-equivalent of nuclear waste dumps that must be tended in perpetuity. Hard-rock mining generates more toxic waste than any other industry in the United States, according to the Environmental Protection Agency. The agency estimated last year that the cost of cleaning up metal mines could reach $54 billion.

A recent report from the Government Accountability Office chastised the agency and said legal loopholes, corporate shells and weak federal oversight had compounded the costs and increased the chances that mining companies could walk away without paying for cleanups and pass the bill to taxpayers.

"Mining problems weren't considered a very high priority" in past decades, Thomas P. Dunne, the agency's acting assistant administrator for solid waste and emergency response, said in an interview. "But they are a concern now."

With the costs and scrutiny of mining on the rise in rich countries, where the best ores have been depleted, 70 percent of gold is now mined in developing countries like Guatemala and Ghana. It is there, miners and critics agree, that the real battle over gold's future is being waged.

Gold companies say they are bringing good jobs, tighter environmental rules and time-tested technologies to their new frontiers. With the help of the World Bank, they have opened huge mines promising development. Governments have welcomed the investment.

But environmental groups say companies are mining in ways that would never be tolerated in wealthier nations, such as dumping tons of waste into rivers, bays and oceans. People who live closest to the mines say they see too few of mining's benefits and bear too much of its burden. In Guatemala and Peru, people have mounted protests to push miners out. Other communities are taking companies to court.

This month a Philippine province sued the world's fifth-largest gold company, Canada-based Placer Dome, charging that it had ruined a river, bay and coral reef by dumping enough waste to fill a convoy of trucks that would circle the globe three times.

Placer Dome, which also runs three major mines in Nevada, answered by saying that it had "contained the problem" and already spent $70 million in remediation and another $1.5 million in compensation.

Some in the industry have paused to consider whether it is worth the cost - to the environment, their bottom line or their reputations - to mine gold, which generates more waste per ounce than any other metal and yet has few industrial uses.

The world's biggest mining company, Australia-based BHP Billiton, sold its profitable Ok Tedi mine in Papua New Guinea in 2001 after having destroyed more than 2,400 acres of rainforest. Upon leaving, the company said the mine was "not compatible with our environmental values."

After tough lessons, other companies, like Newmont Mining, the world's largest gold producer, are paying for more schools and housing, trying harder to ease social problems around its mines.

"I don't think any of our members want to be associated with a bad operation - notwithstanding it would hurt their ability to open new facilities," said Carol L. Raulston, spokeswoman for the National Mining Association. "News goes around the world quickly now and there is no place to hide."

Critics say corporate miners have been cloistered from scrutiny because of their anonymity to consumers, unlike, say, oil companies, which also extract resources but hang their name over the pump.

Last year the mine watchdog group Earthworks began a "No Dirty Gold" campaign, marching protesters in front of fashionable Fifth Avenue storefronts, trying to change gold mining by lobbying gold consumers.

"They just said to ask where the gold was coming from and whether it caused social or environmental damage," said Michael E. Conroy, senior lecturer and research scholar at the Yale University School of Forestry and Environmental Studies. "The repercussions in the mining media were huge - some said it was all lies, but retailers began to realize what their vulnerability was."

Mr. Kowalski, Tiffany's chairman, has tried to stay ahead of the controversy. He has broken new ground by buying Tiffany's gold from a mine in Utah that does not use cyanide.

But the largest sellers of gold are not luxury outlets like his, but rather Wal-Mart stores, and even Mr. Kowalski, a trustee of the Wildlife Conservation Society, hesitated to call any gold entirely "clean."

Asia's Insatiable Appetite

Amrita Raj, a 25-year-old bride, was shopping for her wedding trousseau on a recent Saturday in New Delhi. There was a "wedding set" to be bought that day, with its requisite gold necklace, matching earrings and two sets of bangles.

For the sake of family honor, the new in-laws would have to receive gold gifts as well - a "light set" for the mother-in-law, plus a gold ring or a watch for the bridegroom, and earrings for a sister-in-law.

"Without gold, it's not a wedding - at least not for Indians," Ms. Raj said.

For thousands of years, gold has lent itself to ceremony and celebration. But now old ways have met new prosperity. The newly moneyed consumers who line the malls of Shanghai and the bazaars of Mumbai sent jewelry sales shooting to a record $38 billion this year, according to the World Gold Council, the industry trade group.

Over the last year, sales surged 11 percent in China and 47 percent in India, a country of a billion people whose seemingly insatiable appetite for gold - for jewelry, temples and dowries - has traditionally made it gold's largest consumer.

That kind of demand leads many in and out of the industry to argue that gold's value is cultural and should not be questioned. The desire to hoard gold is not limited to households in India or the Middle East, either.

The United States, the world's second-largest consumer of gold, is also the world's largest holder of gold reserves. The government has 8,134 tons secured in vaults, about $122 billion worth. The Federal Reserve and other major central banks renewed an agreement last year to severely restrict sales from their reserves, offering, in effect, a price support to gold.

That price is not simply a matter of supply and demand, but of market psychology. Gold is bought by anxious investors when the dollar is weak and the economy uncertain. That is a big reason for gold's high price today.

For miners that price determines virtually everything - where gold is mined, how much is mined, and how tiny are the flecks worth going after.

"You can mine gold ore at a lower grade than any other metal," said Mike Wireman, a mine specialist at the Denver office of the E.P.A. "That means big open pits. But it must also be easy and cheap to be profitable, and that means cyanide."

That kind of massive operation can be seen at Yanacocha, a sprawling mine in northern Peru run by Newmont. In a region of pastures and peasants, the rolling green hills have been carved into sandy-colored mesas, looking more like the American West than the Andean highlands.

Mountains have been systematically blasted, carted off by groaning trucks the size of houses and restacked into ziggurats of chunky ore. These new man-made mountains are lined with irrigation hoses that silently trickle millions of gallons of cyanide solution over the rock for years. The cyanide dissolves the gold so it can be separated and smelted.

At sites like Yanacocha, one ounce of gold is sprinkled in 30 tons of ore. But to get at that ore, many more tons of earth have to be moved, then left as waste. At some mines in Nevada, 100 tons or more of earth have to be excavated for a single ounce of gold, said Ann Maest, a geochemist who consults on mining issues.

Mining companies say they are meeting a demand and that this kind of gold mining, called cyanide heap leaching, is as good a use of the land as any, or better.

Cyanide is not the only option. But it is considered the most cost-effective way to retrieve microscopic bits of "invisible gold." Profit margins are too thin, miners say, and the gold left in the world too scarce to mine it any other way.

"The heap is cheaper," said Shannon W. Dunlap, an environmental manager with Placer Dome. "Our ore wouldn't work without the heap."

But much of those masses of disturbed rock, exposed to the rain and air for the first time, are also the source of mining's multibillion-dollar environmental time bomb. Sulfides in that rock will react with oxygen, making sulfuric acid.

That acid pollutes and it also frees heavy metals like cadmium, lead and mercury, which are harmful to people and fish even at low concentrations. The chain reaction can go on for centuries.

Many industry officials, reluctant to utter the word pollution, protest that much of what they leave behind is not waste at all but ground-up rock. The best-run mines reclaim land along the way, they say, "capping" the rock piles with soil and using lime to try to forestall acid generation.

But stopping pollution forever is difficult. Even rock piles that are capped, in an attempt to keep out air and rain, can release pollutants, particularly in wet climates.

Cyanide can present long-term problems, too. Most scientists agree that cyanide decomposes in sunlight and is not dangerous if greatly diluted. But a study by the United States Geological Survey in 2000 said that cyanide can convert to other toxic forms and persist, particularly in cold climates.

And just as cyanide dissolves gold out of the rock, it releases harmful metals, too.

There have also been significant accidents involving cyanide. From 1985 to 2000, more than a dozen reservoirs containing cyanide-laden mine waste collapsed, the United Nations Environment Program reported.

The most severe disaster occurred in Romania in 2000, when mine waste spilled into a tributary of the Danube River, killing more than a thousand tons of fish and issuing a plume of cyanide that reached 1,600 miles to the Black Sea.

That spill led to calls for the gold industry to improve its handling of cyanide. After five years of discussion, the industry unveiled a new code this month. It sets standards for transporting and storing cyanide and calls on companies to submit to inspections by a new industry body.

But the cyanide code is voluntary and not enforced by government. And Glenn Miller, a professor of environmental science at the University of Nevada, says it does not adequately deal with one of mining's most important, unattended questions: What happens when the mine closes?

A Rocky Mountain Disaster

One answer can be found in a rural, rugged area of northeastern Montana called the Little Rocky Mountains.

There, Dale Ployhar often comes to the high bare slopes around the abandoned Zortman-Landusky gold mine to plant pine seedlings on a silent hillside that has been reclaimed by little more than grasses.

"I bring lodgepole seeds and scatter them around, hoping they'll come back," he said, looking out over the tiny town of Zortman, population 50.

Zortman-Landusky was the first large-scale, open-pit cyanide operation in the United States when it opened in 1979. The imprint it left on the environment, psyche and politics of Montana continues today.

What happened there - a cacophonous, multilayered disaster involving bankruptcy, bad science, environmental havoc and regulatory gaps - foreshadowed the risky road that gold has taken in the years since, mining experts, government regulators and environmentalists say.

"There's a lot of bitterness left," said Mr. Ployhar, 65, a heavy equipment operator, whose son bought some of the mine lands at a bankruptcy auction four years ago.

Some mining experts say that Zortman-Landusky - a combination of two open pits near Zortman and the neighboring village of Landusky - offered a steep learning curve on how chemical mining worked, and didn't.

Others say that overly ambitious production schedules by the mine's owner, Pegasus Gold, based in Canada, were to blame. A bonus package of more than $5 million for top executives, announced after the company filed for bankruptcy protection in 1998, did not help.

Mining with cyanide can be tricky even in the best conditions. At Zortman, the company made the mistake of building their cyanide heaps atop rock that turned acidic. The cyanide and the acid mixed in a toxic cocktail that seeped from the mounds.

Mining stopped in 1996, and company officials insisted in their public comments over the next year that they wanted to be responsible corporate citizens and stay to clean up the property. But the price of gold was falling, then below $280 an ounce, and Pegasus closed its doors.

"This became one of the worst cases in Montana," said Wayne E. Jepson, manager of the Zortman project at the Montana Department of Environmental Quality. "But even as late as 1990, one of the last studies for Landusky predicted no acid in any significant amounts."

Environmental risks from hard-rock mines often turn out to be understated and underreported, according to two recent studies.

Robert Repetto, an economist at the University of Colorado, examined 10 mines in the United States and abroad run by publicly traded companies. All but one, he wrote in a June report, had failed to fully disclose "risks and liabilities" to investors.

The environmental group Earthworks examined 22 mines for a report it will publish in November. Almost all of them had water problems, leading it to conclude that "water quality impacts are almost always underestimated" before mining begins.

"The combination of the regulatory approach and the science is what creates inaccurate predictions," said James R. Kuipers, a consultant and former mining engineer, one of the authors of the study.

At Zortman-Landusky, the state wrote the environmental impact study itself, based primarily on information from the company, Mr. Kuipers said.

Montana and other big mining states still often depend on mining companies for much of the scientific data about environmental impact, or the money to pay for the studies, state and federal regulators say, mainly because government agencies generally lack the resources to do expensive, in-depth research themselves.

Some mine regulators defend the practice, saying that having scientific data supplied by companies with a financial interest in the outcome is not necessarily bad if the review is stringent.

"What is important to make the system work is that state and federal agencies have the wherewithal and expertise to look at the information," said Mr. Wireman of the Denver E.P.A. office.

But one lesson of Zortman is that good information is sometimes ignored.

In the early 1990's, an E.P.A. consultant and former mining engineer, Orville Kiehn, warned in a memo to his bosses that not enough money was being set aside by the mine for water treatment.

Mr. Kiehn's opinion, vindicated today, went nowhere. The environmental agency had little legal authority then - and no more today - to protect the public from an operating mine except by filing a lawsuit, as it did in 1995 after Pegasus had already violated federal clean water standards.

The company settled the suit in 1996 and agreed to pay $32.3 million mostly to upgrade and expand water treatment.

At the time, state officials rejected the idea of squeezing Pegasus to put up more money. This spring, Montana's legislature created a special fund for water treatment to make up for it, for the next 120 years, at a cost of more than $19 million.

Washington is also coming to grips with the failure to plan for the cost of mining. The Government Accountability Office, the investigative arm of Congress, sharply criticized the E.P.A. in August for not requiring metal mines to provide assurances that they can pay for cleanups, a failure that it said had exposed taxpayers to potentially billions of dollars in liabilities.

For Montana, the Zortman experience was chilling. In 1998, as the catastrophe was making headlines across the state, voters approved the nation's first statewide ban on cyanide mining, halting any new gold projects. They renewed the ban last year.

Profit and Poverty

Today gold companies are striking out to remote corners of the globe led by a powerful guide: the World Bank.

The bank, the pre-eminent institution for alleviating world poverty, has argued that multinational mining companies would bring investment, as well as roads, schools and jobs, to countries with little else to offer than their natural resources. For the bank, which tries to draw private investment to underdeveloped lands, the logic was simple.

"We invest to help reduce poverty and help improve people's lives," said Rashad-Rudolf Kaldany, head of oil, gas and mining at the bank's profit-making arm, the International Finance Corporation.

The bank has worked both ends of the equation. At its urging, more than 100 cash-strapped governments have agreed to cut taxes and royalties to lure big mining companies, said James Otto, an adjunct professor at the University of Denver law school.

At the same time, the bank put up money for or insured more than 30 gold-mining projects, looking for profits.

Though mining was a small part of the bank's portfolio, it was not without controversy as accidents mounted. In one of the worst disasters, in 1995, a mine in Guyana insured by the bank spilled more than 790,000 gallons of cyanide-laced mine waste into a tributary of the Essequibo River, the country's main water source.

By 2001, the World Bank president, James D. Wolfensohn, imposed a two-year moratorium on mining investments and ordered a review of its involvement in the industry.

Emil Salim, a former minister of environment of Indonesia, led the study. "I said, up to now the International Finance Corporation was only listening to business," he said in an interview in Jakarta. "I said, so now let's give some voice to civil society."

Mr. Salim recommended reducing the use of cyanide, banning the disposal of waste in rivers and oceans, and giving communities veto power over mining company plans.

But the industry complained. And developing country governments said they liked the bank's loans to gold mines. In the end, the bank settled on more modest goals.

It pledged to make environmental impact statements understandable to villagers and to back only projects with broad community support. It also urged governments to spend mining companies' taxes and royalties in the communities near the mines.

But critics and environmental groups say the bank demands little from the mining companies in return for its money and its seal of approval.

The bank's guidelines for arsenic in drinking water are less stringent than those of the World Health Organization, and mercury contamination levels are more lenient than those permitted by the E.P.A., said Andrea Durbin, a consultant to nongovernmental groups pressing for tougher standards.

The International Finance Corporation is drafting new guidelines that will clarify what it expects from miners, said Rachel Kyte, its director of environment and social development.

But the draft rules give mining companies even more latitude, said Manish Bapna, the executive director of the Bank Information Center, a group that monitors the bank. They will make it easier for companies to evict indigenous people and to mine in some of the globe's most treasured habitats, he said.

Despite the World Bank's two-year review, little has changed, said Robert Goodland, a former director of environment at the bank who was an adviser on the study. "The bank insists on business as usual," he said.

Resistance in Guatemala

The first piece of new mining business the bank invested in after its review can be found today in the humid, green hills of western Guatemala.

Bishop Alvaro Ramazzini, a big burly man who mixes politics and religion with ease, doesn't understand why the World Bank lent $45 million to a rich multinational company for a gold mine in his impoverished region of Mayan farmers.

"Why not spend the money directly to help the people?" he asked.

Sprawled across a deep wooded valley, a new mine built by Glamis Gold, a Canadian company, was chosen by the World Bank last year as a new model for how gold mining could help poor people.

But the mine has faced protest at every turn.

At the June 2004 board meeting of the International Finance Corporation, there was considerable skepticism about its $45 million loan to Glamis.

Members questioned why a $261 million project was creating only 160 long-term jobs and giving money to a "well capitalized" company like Glamis at all, according to minutes of the meeting provided to The Times by a nongovernmental group opposed to the project.

Others were worried that the I.F.C. was relying too heavily on information from Glamis about the potential for pollution.

The World Bank had pledged to back only mines with broad local support. But on the ground in Guatemala, opposition boiled over last December.

Angry farmers set up a roadblock to stop trailers carrying huge grinding machines for the mine. After 40 days, and battles between police and protesters, the equipment had to be escorted by soldiers.

To persuade the villagers of the mine's benefits, Glamis flew 19 planeloads of farmers to a mine it runs in Honduras.

But the villagers of Sipicapa still wanted their voices heard. On a cool Saturday morning in June, more than 2,600 men and women dressed in their weekend best, with children in tow, crowded into the community's yards, churches and verandas to vote in a nonbinding referendum.

"We are already regretting that our forefathers allowed the Spaniards to buy our land for trinkets and mirrors," said Fructuoso López Pérez, a local mayor. "So we should vote so our children will thank us for doing right."

At that, a church full of local people raised their hands in a unanimous show of opposition to the mine.

Much of the peasants' fury was informed by Robert E. Moran, an American hydrogeologist, who was asked by Madre Selva, a Guatemalan nongovernmental organization, to visit the mine and review its environmental impact statement.

Mr. Moran, who was on the advisory board of the bank's mining study, found it badly lacking. It did not address the "very large quantities of water" the mine would use, or give basic information on the "massive volumes" of waste the mine would produce, he said.

Tim Miller, vice president of Central American operations for Glamis, said the environmental impact statement had been a "working document."

In Guatemala City, the Vice Minister of Mining, Jorge Antonio García Chiu, defended approval of the mine, saying it followed four months of consultation.

Mr. Kaldany, the I.F.C. official, said the investment and the environmental impact statement were both sound. "We are a bank," he said. "We go on the basis of a business development project. Then, as well, the bank asks: Are we needed? Are we adding any value?"

Glamis had already spent $1.3 million on social programs in the villages as part of the bank's requirements, Mr. Kaldany said.

At the mine, the grinding and churning of new machinery being tested already echoes across the valley. Production could begin as early as November.

Mr. Miller, of Glamis, said the mine was a winner for the people, and his company. In fact, he said, Glamis didn't need the bank, the bank came to Glamis.

Bank officials "were anxious to make some investments" in the region, he said. The company is expecting to gross $1 billion over the life of the mine, with profits of $200 to $300 million.

"That's a return of about 25 to 30 percent," he said.

Ghana: The Social Costs

The men of Binsre on Ghana's ancient Gold Coast carry on their own hunt for gold. Nearly naked, their arms and legs slathered in gray ooze, they sift through the muck in a large pit, using buckets and hard hats, looking for any last scrap.

So far industrial mining has not lived up to its promise for these men and their families. They are illegal miners who find work not inside the highly mechanized mines of Ghana's first-world investors, but on the fringes, scavenging the waste left behind by AngloGold Ashanti, the world's second-largest gold company, based in South Africa.

Six miners have died in the last several years, most of them overcome by fumes when waste from the mine gushed into the pit, said Hannah Owusu-Koranteng, an advocate for the illegal miners. The mine tried to keep the men out.

"We used to use dogs," said AngloGold Ashanti's chief financial officer, Kwaku Akosah-Bempah. "Then they said we were using dogs to bite them." So the mine stopped using the dogs and the men returned.

In the nearby village of Sanso, a few men said they had lost their land to the mine. Now they carve shafts into a mountain of waste rock, where they haul, hammer, chip and sift.

"You wake up one day and you realize your farm is destroyed," said Assemblyman Benjamin Annan, a local politician. "They say they will compensate but it takes one or two years. So people are compelled to go to illegal mining, the way our ancestors did."

Industrial-size shaft mining has existed in Ghana for 100 years, but with the price of gold soaring, more companies are arriving now, this time bringing open-pit cyanide mines. The investment has been greeted warmly by the government.

Newmont is set to spend a billion dollars on a new mine next year and on a second mine - in one of the badly deforested country's last remaining forest preserves - in 2007.

The World Bank is here, too, preparing to lend the company $75 million. Together, the bank and Newmont say, they aim to show how social development and gold mining can be married.

Newmont compensated the farmers who were moved off their land. It is offering training for new jobs, like growing edible snails and making soap. It built new concrete and tin-roofed houses to replace homes made of mud.

But the mine will create just 450 full-time jobs. More than 8,000 people will be displaced.

"The house is O.K.," said Gyinabu Ali, 35, a divorced mother of five children, who recently moved into her gaily painted two-room house, with a toilet out back, that overlooks several dozen similar units resembling a poor man's Levittown. "I miss my land where I could grow my own food."

Near the mine of Newmont's competitor, AngloGold Ashanti, in Obuasi, only half of the homes have an indoor bathroom, and 20 percent have running water. With the exception of the brick villas of the company executives, Obuasi today looks like a vast and squalid shanty town.

The chief financial officer, Mr. Akosah-Bempah, said he was offended by the poor conditions. Most of the company's taxes and royalties had stayed in the capital, he said, leaving the ramshackle town bereft of the benefits of gold mining.

"Sometimes we feel embarrassed by going to Obuasi," he said. "Not enough has gone back into the community."

Somini Sengupta contributed reporting from New Delhi for this article.

October 25, 2005

The Cost of Gold | Treasure of Yanacocha
Tangled Strands in Fight Over Peru Gold Mine

By JANE PERLEZ and LOWELL BERGMAN

SAN CERILLO, Peru - The Rev. Marco Arana drove his beige pickup over the curves of a dirt road 13,000 feet high in the Andes. Spread out below lay the Yanacocha gold mine, an American-run operation of mammoth open pits and towering heaps of cyanide-laced ore. Ahead loomed the pristine green of untouched hills.

Then, an unmistakable sign that this land, too, may soon be devoured: Policemen with black masks and automatic rifles guarding workers exploring ground that the mine's owner, Newmont Mining Corporation, has deemed the next best hope.

"This is the Roman peace the company has with the people: They put in an army and say we have peace," said Father Arana as he surveyed the land where gold lies beneath the surface like tiny beads on a string.

Yanacocha is Newmont's prize possession, the most productive gold mine in the world. But if history holds one lesson, it is that where there is gold, there is conflict, and the more gold, the more conflict.

Newmont, which has pulled more than 19 million ounces of gold from these gently sloping Peruvian hills - over $7 billion worth - believes that they hold several million ounces more. But where Newmont sees a new reserve of wealth - to keep Yanacocha profitable and to stay ahead of its competitors - the local farmers and cattle grazers see sacred mountains, cradles of the water that sustains their highland lives.

The armed guards are here because of what happened in the fall of 2004 at a nearby mountain called Cerro Quilish. For two weeks, fearing that the company's plans to expand Yanacocha would mean Quilish's desecration and destruction, thousands of local people laid siege to the mine. Women and children were arrested, tear gas was thrown, the wounded hospitalized after clashes with the police.

In the end, the world's No. 1 gold-mining company backed down. Father Arana, who runs a local group formed to challenge the mine, helped negotiate the terms of surrender. Newmont withdrew its drilling equipment from Quilish - and the promised reserves from its books. Now, in large part because of the loss of Quilish, the company says production at Yanacocha may fall 35 percent or more in two years.

The forced retreat, a culmination of years of distrust between the peasants and the mine, was a chastening blow for an industry in the midst of a boom. It underscored the environmental and social costs of the technologies needed to extract the ever-more-valuable ore from modern mines. And it showed how a rising global backlash against those costs was forcing mining companies to negotiate what has come to be known as "social license" if that boom was to go on.

But the history of Yanacocha, pieced together in a six-month examination by The New York Times and the PBS television program "FrontlineWorld," is also an excursion into the moral ambiguities that often attend when a first-world company does business in a third-world land.

Gold miners say they have no choice but to go where the ore is; they cannot choose the governments they deal with. Yanacocha shows how one company maneuvered in a country, Peru, dominated by a secret web of power under a corrupt autocracy.

Newmont gained undisputed control of Yanacocha in 2000 after years of back-room legal wrangling. Behind the scenes, Newmont and its adversaries - a French company and its Australian ally - reached into the upper levels of the American, French and Peruvian governments, employing a cast of former and active intelligence officials, including Peru's ruthless secret police chief, Vladimiro Montesinos.

Much of that arm-twisting has been dragged into the light, in secret recordings by the spy chief. The tapes, apparently intended to blackmail and manipulate Peru's powerbrokers, surfaced in 2000 and led to the downfall of Mr. Montesinos and the president he served, Alberto K. Fujimori.

The tapes captured everything from plotting to fix elections to shopping bags of money being unloaded for payoffs in Mr. Montesinos's office at the Peruvian National Intelligence Agency.

They captured Newmont's maneuverings, too. In one audio recording, the No. 3 Newmont executive at the time, Lawrence T. Kurlander, is heard offering to do a favor for Mr. Montesinos.

"Now you have a friend for life," Mr. Kurlander tells the spy chief.

"You have a friend for life also," Mr. Montesinos replies.

Last year, a Justice Department investigation into whether Newmont's victory resulted from bribing foreign officials was dropped after the Peruvian government failed to cooperate fully and the statute of limitations expired, according to law enforcement officials familiar with the case. The Peruvian government investigated the Yanacocha affair without bringing charges.

Mr. Kurlander has agreed to speak out publicly about his meeting for the first time. He says he regrets seeking out Mr. Montesinos, now in jail charged with everything from corruption to gun running and drug trafficking. But Mr. Kurlander and Newmont are adamant that no bribes were paid, nothing illicit done, at least not by them or their allies.

"Everybody involved on the American side, in the American government, that went to see him or spoke to him, asked for a level playing field," said Mr. Kurlander, who retired in 2002. "Not a single person asked for him to influence the outcome of the case."

Newmont's senior executives declined repeated requests for interviews for this article, though they did allow Times reporters to make an extensive visit to the Yanacocha mine. But in a written statement, Newmont said of its legal battle for the mine, "We are satisfied that the company complied in all respects with applicable laws."

Whatever the past environmental problems, Newmont says Yanacocha now meets all Peruvian and international standards. And the company says it is committed to gaining and maintaining the approval of the community.

Still, to many of the local people, the continuing struggle for Yanacocha evokes a tale of treachery nearly any Peruvian school child can recite.

In 1532, the Spanish conquistador Francisco Pizarro captured the last Inca emperor, Atahualpa, in Cajamarca, the provincial capital 28 miles from Yanacocha. The young Inca, a god to his people, was held for months while he scrambled to amass a ransom: enough gold to fill a room as high as his arm could reach.

He turned over his gold, expecting to be freed. But Pizarro killed him anyway.

Living on Water

At first, people here saw possibility in the mine. Yanacocha - "black lake" in the indigenous Quechua tongue - sits in one of the poorest agricultural regions of Peru.

"When Yanacocha began its operations, we would only hear about how everyone was happy," Father Arana said. "The mine was going to bring jobs, improve roads." No one thought much, he said, about the inevitable collisions.

The collisions began almost immediately.

In the Andean peasants' universe, water is the heart of the land. The people depend on it - for their animals, for drinking, for bathing. Community life is organized around it.

But the mine lives on water, too. The bits of gold here, so small they are called "invisible gold," can be mined profitably only by blasting mountains, then culling the gold with vast quantities of cyanide diluted with similarly vast quantities of water.

It was not long before the peasants began to complain. Streams and canals were drying up, they said. They were filled with murky sediment. The water smelled foul.

But on the ledger books, Yanacocha was a fast success.

The mine had started with 1.3 million ounces of reserves in the ground. Within a year, it claimed over 3 million. It was the biggest foreign investment in Peru.

"Everywhere we drilled and looked, there was gold," said Len Harris, Yanacocha's first general manager.

Dueling Companies

Celebration soon gave way to strife.

A year before, a partnership had been formed to develop the mine: Newmont; a Peruvian partner, Buenaventura; and a French government-owned company, Bureau de Recherches Géologiques et Minières (BRGM). No partner had a controlling interest. The World Bank's investment arm, the International Finance Corporation, later took a 5 percent stake, hoping to promote development in a country plagued by economic chaos and roiled by a Maoist insurgent group, Shining Path.

With the mine expanding and the guerrilla leader captured, BRGM announced plans to sell a large part of its increasingly valuable stake to an Australia-based company, Normandy Poseidon. Newmont, considering the involvement of another major mining company unacceptable, sued, arguing that the partnership agreement gave it and Buenaventura first right of refusal on any sale.

Twice, Peruvian courts agreed. Then, in September of 1997, the Peruvian Supreme Court issued a startling ruling, agreeing to review a case Newmont thought it had definitively won. Stunned and suspicious, the company called in Mr. Kurlander.

Mr. Kurlander, then 56, had spent most of his life in government, as a prosecutor and as chief criminal-justice adviser to Gov. Mario M. Cuomo in New York. He later moved to corporate work and was recruited by Newmont in 1994. He had no experience in mining, but in an industry known for its rough edges, he became a top Newmont executive, valued for his political contacts and easy ability to walk between the halls of government and the corporate suite.

On his arrival in Peru, Mr. Kurlander says, he was told by Newmont's lawyers and security chief that the French were "behaving inappropriately in the litigation."

"The mere fact that they were doing this," he said in an interview, "was unseemly at best and corrupt at worst."

Newmont, he said, was at a distinct disadvantage: the Foreign Corrupt Practices Act forbids American companies to pay anything of value to a foreign official in exchange for a "result." By contrast, in 1997, most European countries, France included, did not prohibit paying bribes.

The French ambassador to Peru at the time, Antoine Blanca, said in an interview that no one connected to the embassy had ever offered bribes or otherwise acted improperly.

Still, what emerges from documents and interviews with participants is a picture of three years of increasing pressure and intimated threats by Normandy and the government of France.

In the Peruvian press, the French ambassador insinuated corruption of the judiciary; French government emissaries suggested to Peruvian officials that there would be consequences if Newmont was awarded the disputed shares.

Normandy recruited Patrick Maugein, a well-connected French businessman. By phone, fax and letter, Mr. Maugein placed Newmont and Buenaventura on notice that the dispute had become a "matter of state"; the French, he warned, "had every intention of fighting it to the bitter end." Mr. Maugein had ties to the French president, Jacques Chirac, and soon Mr. Chirac wrote to President Fujimori, urging a Supreme Court review and his personal intervention.

Mr. Maugein declined to be interviewed for this article, but in a letter wrote that any allegations of illicit activity "come from people who have been paid to make them."

From Lima, in the days after the Supreme Court agreed to take the case, Mr. Kurlander headed to Washington to enlist help on the American side. By the end of October 1997, Stuart E. Eizenstat, under secretary of state for economic affairs, wrote Peru's prime minister to press for "a fair and impartial hearing," according to documents released under the Freedom of Information Act.

"A politically tainted decision would adversely affect U.S. investment in Peru," he wrote

On Jan. 5, 1998, Peru's Supreme Court came back with a preliminary decision; 3 to 2 for the French, one vote shy of victory.

As the Peruvians prepared to assign two more judges to the case, Mr. Kurlander says, he and Buenaventura's chief, Alberto Benavides, appealed to Mr. Fujimori.

Soon after, Mr. Kurlander said, the president's office sent word about the man to see.

Spy Chief's Favor Bank

Vladimiro Montesinos's titles never matched his stature. Officially, he was "counselor" to Mr. Fujimori and de facto head of the National Intelligence Service. In reality, he was the second-most-powerful man in Peru - "Rasputin, Darth Vadar, Torquemada and Cardinal Richelieu" rolled into one, according to an American Army intelligence report.

The National Intelligence Service was also on the payroll of the C.I.A., which gave Mr. Montesinos a million dollars a year for his supposed help in combating the narcotics trade, according to former C.I.A. officials who approved the payments.

This was the man Mr. Kurlander headed to see alone on Feb. 26, 1998. While he says he knew that Mr. Montesinos was "an extremely bad man," he maintains that the extent of the government's corruption and human rights abuses were not well known at the time. There was, however, one case he was aware of.

Not long before, the Fujimori government had seized the television station of a Peruvian-Israeli businessman, Baruch Ivcher, after it began broadcasting reports tying the intelligence chief to drug trafficking and corruption. Mr. Kurlander knew that publicity about the case was threatening to become a headache for Peru's government.

As the secret tape rolls, Mr. Montesinos says he is aware of Mr. Kurlander's problems and is "very glad to do whatever I can for you."

Mr. Kurlander describes his own links to the intelligence community and how he has enlisted "friends" - two former C.I.A. officials - to assist him, because the French side "has been acting quite strangely."

Their conversation is interpreted by Grace Riggs, a lawyer and former lover of the spy chief who had a child with him.

Soon Mr. Kurlander raises the Ivcher case. Mr. Montesinos assures him that the pursuit of Mr. Ivcher is not an anti-Semitic "persecution," and Mr. Kurlander offers to help by lobbying his fellow Jews in the United States and abroad.

"Tell him I going to help him with the voting," Mr. Montesinos directs his translator. He is well aware of the "tricky practices of the French government," he says, making a joke about "The French Connection."

The reference, in English, gets the men laughing. Soon spy chief and executive are pledging friendship for life.

The spy chief then proceeds to discuss with another man, who has never been identified, the lawyers and judges who may need to be influenced. The conversation is in Spanish, which Ms. Riggs does not translate.

Finally, she tells Mr. Kurlander that because he helps Mr. Montesinos "without expecting anything in return," the spy chef "wants to do the same thing for you."

"I appreciate that," Mr. Kurlander replies.

"Amor con amor se paga," Mr. Montesinos exclaims.

Love is repaid with love.

Washington Is Heard From

Still, Mr. Kurlander says, he had doubts. In the following weeks, "nothing happened," he said. "I was very worried that we were lost." In fact, the channel between Mr. Montesinos and the Americans was open and bustling.

Peter Romero, then assistant secretary of state for Western Hemisphere affairs, acknowledged in an interview that he had twice called Mr. Montesinos to show that the case was being "monitored" in Washington.

"He seemed to be a nice enough fellow," he recalled.

The "compelling reason" to get involved, he said, came from Peruvian and American Embassy officials who confirmed the direct involvement of President Chirac and others at the top of the French government.

"We wanted to ensure that that was neutralized," Mr. Romero said.

Two and a half years later, Mr. Romero left government and was hired by Mr. Kurlander as a consultant on Peru for Newmont, where he remained for 18 months.

On April 14, six weeks after the Montesinos-Kurlander meeting, the video cameras were rolling for a visit from the C.I.A. station chief, Don Arabian.

As the meeting nears its end, Mr. Montesinos says he has been collecting information on the French attempt to influence the case and will not let them use "extortion, blackmail and other gangster" methods.

"I'm not working with the telephones, but we will if necessary," Mr. Montesinos says, an apparent reference to wiretapping. "We'll sort out the technical support." The men laugh.

Mr. Arabian, who recently retired, declined a request for an interview.

On May 8, the sixth Supreme Court justice voted in favor of Newmont and Buenaventura. With the vote deadlocked, 3-3, the court administrator appointed a final judge, Jaime Beltrán Quiroga. He was summoned the next day by Mr. Montesinos.

A videotape shows the justice settled on the couch as Mr. Montesinos talks about how, as a lawyer he, too, would normally "keep a distance" from events. But "in these cases," he says, "one has to intervene directly."

Mr. Montesinos avoids direct pressure - "as if we are imposing on you" - but reminds the judge that the case is a matter of national interest: the United States is a key guarantor of coming deliberations over Peru's border conflict with Ecuador.

There is no discussion of payoffs, but the spy chief does question the judge about his professional ambitions. The men reminisce.

"Well, doctor, you have a friend here," Judge Beltrán says.

"My dear, Jaime, then, a pleasure to see you, brother," Mr. Montesinos replies, assuring his guest that he will soon be transferred to Peru's Constitutional Court.

Judge Beltrán's vote was announced two weeks later: Newmont and Buenaventura were awarded BRGM's share - at the purchase price set in 1993: $109.7 million.

When the final transfer was negotiated a year later, the stake was valued at more than five times that.

Today Mr. Kurlander says that whatever his reservations at the time about meeting Mr. Montesinos, he went ahead because nearly everyone told him, "If the French were to be stopped, he was the only one in Peru who would dare to do it."

The transcript is "terribly unfair," Mr. Kurlander says, and leaves out a number of his statements that all he wanted was a "level playing field."

Mr. Kurlander's name has been attached to the meeting and his reputation harmed, he says, though he insists the meeting was no secret. He says his Newmont superiors and his partners in the Benavides family were thoroughly briefed.

"It was my government who recommended - strongly - that we speak with him," Mr. Kurlander said at his home outside Denver. "Tell me what my option is at that point. Do I lay down and just fold, fold up and go home? Or do I fight for what I think is right and fair and just?"

In an interview at his Lima offices, Mr. Benavides, now Buenaventura's chief executive, insisted, "We didn't know what Mr. Kurlander was doing," and added that he did not learn about the Montesinos meeting until the tape was made public several years later.

The Mercury Spill

At Yanacocha, year after year, the mine's geologists had kept striking gold. And with every ton of earth sifted, it became ever clearer that the mine had not just ripped up the landscape; it had remade the social architecture, too.

There were growing class divisions, between the many campesinos who had received well-paying jobs - Yanacocha would eventually employ as many as 2,200 people, two-thirds locals, full time, and up to 6,000 on shorter-term contracts - and the tens of thousands more who had not. People migrating to the region in pursuit of work brought overcrowding and rising crime.

In June 2000, a truck contracted to carry canisters of mercury, a byproduct of mining, spilled 330 pounds of the poisonous metal over 25 miles of road around Choropampa, 53 miles from the mine.

The villagers believed that the mercury was mixed with gold. They scooped it up. Some took it home to cook on their stoves. A World Bank report later said the mine delayed reporting the accident to the national authorities and initially played down its seriousness to the bank.

In the end, the Peruvian government fined the mine $500,000; the company says it has paid $18 million more. A class-action suit has been filed against Newmont in Denver, charging that more than 1,000 people were harmed, some for life.

The extent of that damage has been in dispute from the start. Even so, the spill left deep psychic scars. It became common mythology that mercury had killed newborn babies and caused cancer and other diseases, Dante Vera, a former Peruvian Interior Ministry official hired in 2004 as an adviser to Newmont, wrote in a report to company executives.

At Newmont, it was becoming increasingly clear that the social turmoil was a business problem. The spill, Mr. Kurlander said in a speech a year later, "served as a wake-up call for us."

Soon, he was headed back to Peru, to lead an environmental audit of the mine.

Newmont kept the audit's results within the company, never acknowledging them publicly - either to its shareholders or to the local people. Mr. Kurlander found "a high level of mistrust" of the mine.

But the 44 findings of Mr. Kurlander's audit, which was given to The Times, also confirmed many of the villagers' specific complaints: that fish were disappearing and that lakes, streams and canals were being contaminated, at least one with cyanide.

One stream, Quebrada Honda, had 13 fish per kilometer in 1997, but none by 2000, the audit said. Thousand of tons of rock not processed for gold recovery were generating dangerous acidic runoffs.

In a letter after the audit, Mr. Kurlander says that as the mine expanded, "we eliminated many environmental safeguards that were in the construction and environmental management plans." In all, he wrote to Newmont's new chief executive, Wayne Murdy, the findings were so serious that they could jeopardize the mine's continued operation and leave senior executives subject to "criminal prosecution and imprisonment."

Mr. Kurlander's tough words came on the heels of another memo to Mr. Murdy about the spill: On Jan. 18, 2001, Mr. Kurlander recommended that all the top executives, including himself and his boss, take cuts in their bonuses, of 50 to 100 percent, and that the punishment be made public. Mr. Kurlander singled out the company's environmental team, saying that despite public pledges, Newmont had failed to adhere to American environmental standards.

To his disappointment, Mr. Kurlander said, some bonuses were indeed reduced, but without public notice and much more modestly than he had recommended.

In a letter to Mr. Kurlander three years later, Mr. Murdy said the company had learned from the accident and the audit. Newmont, he said, spent $100 million to fix the environmental problems, including $50 million for a water-treatment plant and $20 million on two dams to prevent sediment from clogging streams and canals. Mercury is now shipped inside triple-sealed, stainless-steel containers and escorted by a convoy of cars.

To Mr. Kurlander, the spill showed the folly of a company ignoring the people, particularly the people most set against the mine. In a memo, he warned that with the mine sunk so low in the peasants' esteem, Newmont would never be able to mine Quilish.

"We have come to this because we have been in denial," he wrote. "We have not heeded the voices of those most intimate with our mine - those who live and work nearby."

It was less than a year after the audit that he retired.

The Peasants Protest

The protests began not long after people began seeing the drilling machines up on the cone-shaped hill above Cajamarca.

Quilish had long been on Newmont's drawing boards. Last year, Newmont mined three million ounces at Yanacocha, its most profitable single source of gold. But the more it pulls from the ground, the more it must replace to remain No. 1.

Back in 2000, the local government had passed an ordinance declaring Quilish and its watershed a protected natural reserve. But Newmont had persuaded a Peruvian court that it had the right to mine because it had acquired the concession years before. In August 2004, the machines moved in.

To many people, that was the final betrayal, said Mr. Vera, the former Newmont consultant. He quit this summer, saying his advice had been ignored.

On Sept. 2, deploying boulders, vehicles, anything they could find, hundreds of campesinos blockaded the narrow mountain road that runs from Cajamarca to the mine.

Several hundred armed officers, including 150 special operations police officers from Lima, were sent in to guard the mine.

The first day was the most violent; protesters were arrested, many of them women and old people, according to Father Arana's colleague, Jorge Camacho. At times during the siege, the police used tear gas. One man was shot in the leg. The company kept the gold coming out of Yanacocha, but only by helicoptering the workers in.

On Sept. 15, there was a regionwide strike, with street demonstrations in Cajamarca. The message, on one of the blizzard of placards in town, was: "Listen Yanacocha. Cajamarca is to be respected."

The protests were organized by the peasants themselves, Mr. Camacho and others say. But the 43-year-old Father Arana, son of teachers from Cajamarca, had been nurturing the movement for many years, even before he founded his group, Grufides, in the late 1990's. (These days, it receives financial assistance from Oxfam.)

The campesinos call him Father Marco, and he is a devoted adherent of liberation theology and its doctrine of social activism for the poor.

He is not the easiest of men. Last spring, he met Newmont's chief, Mr. Murdy, on the sidelines of the company's annual general meeting in Denver. As the priest recalls it, Mr. Murdy tried to be conciliatory, saying he lived by his mother's motto: "We are given one mouth but two ears to listen with." Father Marco says he rebuffed the overture, replying, "In the Bible, there is a saying about some people have eyes that don't see and ears that don't hear."

As the siege ran on at Yanacocha, the priest became a key negotiator between Newmont, the peasants and the Ministry of Mines. It was not long after the demonstrations in Cajamarca that the company surrendered. The machines came down from Quilish. At Newmont's request, the ministry withdrew its permit, too.

What remains up on the mountain is a symbolic wall of mud and straw that the campesinos built to keep the miners at bay.

More Gold Needed

Standing down at Quilish, with its 3.8 million ounces of reserves, has only intensified the need for new reserves.

"The pressure feels like you're laying track and knowing there's a locomotive right behind you," said the mine's exploration manager, Lewis Teal.

So Newmont is looking elsewhere, in the highlands near San Cerillo, where the jade-green lagoons and peaty grasses act as a store of water for the peasants below.

Many people there worry about the effects of a new mine. Which is why, after Quilish, Newmont is paying for the Peruvian police units protecting the drilling team, said the mine's manager, Brant Hinze.

Even so, Mr. Hinze said, leaving Quilish was the right thing to do. "The thing that the company did - both Newmont and Buenaventura - is listen to the communities, and they said this is something we want you to stay away from," he said.

Newmont's Peruvian partner, Mr. Benavides, argued that exploration of Quilish had not been abandoned, simply suspended.

"We have the concession, and we have the land," he said. He added: "I do not understand what social license means. I expect a license from the authorities, from the minister of mines. I expect a license from the regional government. I don't expect a license from the whole community."

Still, the idea of social license is at the heart of the agreement that ended the siege: If Newmont hopes ever to mine Quilish, it first must win the community's consent.

So to promote Yanacocha's well-being and expansion, Mr. Hinze has become the kind of mine manager he never imagined being. He says he had asked for the job running Yanacocha because of its sheer scale - "it's big, it's profitable," is how he puts it. Fifty years old, silver-haired and steely eyed, 6 foot 3 and 255 pounds, he is a man of scale himself. His idea of recreation, he says, is riding his Harley or swimming with hammerhead sharks.

Now, he says, he spends 70 to 80 percent of his working time on social issues. On a recent day, he ate roasted guinea pig at a lunch with a peasant group. A few days later, he attended a ceremony celebrating a gift of $500,000 for a new road around San Cerillo.

"Modern mining can coexist with cattle, agriculture and tourism," he told one gathering. "Today we begin a new history for communities around here."

Newmont says that it paid $180 million in taxes to Peru's government last year, and that under a new law, half was returned to the Cajamarca region. But to its frustration, the company says, the local government has largely been unable to use the money to benefit the people - and most of the people here remain achingly poor.

So the company, albeit ambivalently, has become something of a surrogate government. It is contributing money for schools and clinics and building some small water treatment plants in the villages. In all, the company says it will spend nearly $20 million this year on social programs.

Water remains a divisive issue: Father Arana and his allies argue that a new, every-three-weeks testing protocol is insufficiently independent. The peasants continue to complain.

But company and local officials say there have been no environmental accidents at Yanacocha in more than two years, and the mine says it manages its water to ensure there is enough for the community.

But the biggest issue is the one looming over every modern industrial gold mine: What happens when the ore that lured the miners here is gone?

Over 13 years, Newmont has moved mountains for gold - 30 tons of rock and earth for every ounce. By the time it is through, the company will have dug up a billion tons of earth. Much of it will be laced with acids and heavy metals.

Three years ago, after Newmont acknowledged that 36,700 fish were missing from a river contaminated by the mine, the World Bank hired an American geochemist, Ann Maest, to study the streams and canals flowing from the mine.

In the short term, she concluded, the water was safe for human use. But long term, she said in an interview, the company's own tests show that all the components are in place for the huge piles of rock to leak acids that will pollute surface and groundwater.

The only preventive, she said, would be "perpetual treatment."

Mr. Hinze, who was recently appointed head of Newmont's North American operations, insists that the company's plan for closing the mine will take care of long-term treatment and cleanup.

"We plan on being here a very long time," he said.

Newmont has yet to put aside money for long-term treatment, though it says it will comply with a Peruvian government requirement due to take effect in 2007. But to pay for cleanups, the company needs to keep profits high. To keep profits high, it needs to keep finding and mining more gold. Yet increasingly, the unmovable reality is that to keep mining more gold, it has to make peace with the people who will be here long after the miners leave.

Mr. Hinze and Newmont insist that that can - in fact, must - be done, even if some people may never be won over. "There will always be a level of mistrust," he said. "Unfortunately, we can't please everyone."

Mr. Vera, the former Newmont consultant, is not so confident. He says he sometimes thinks that the clash between the mine and the peasants is so fundamental as to be beyond even the best intentions.

"Mining negatively affects the Andean cosmic vision of the unity of nature," he said. "The conflict cannot be settled with money. Mining generates resentments that are difficult to heal."

Marlena Telvick and Natasha Del Toro contributed reporting for this article.

Citizen-State Relations in Review
Dear Henry Mark Holzer,

25 December 2005 - I just discovered your most informative, eye-opening & in many ways saddening study "How Americans Lost Their Right To Own Gold And Became Criminals in the Process". This while doing background research on the evolution - from ancient time to now - of the citizens/state relationship as reflected in their abilities to effectively challenge each other (i.e. citizen vs state) for acquiring, holding onto, and utilizing such private property as gold, land, information, etc.

    Seen from this peculiar perspective, the history of man takes on a look, dimension and content which in many ways are different from what we ordinarily discuss. It may be summarized as a history of ego-, gut- or intelligence-driven resources redistribution by conquest, looting or imposed sharing, i.e. of endlessly changing fortunes - for both the citizens and the community they live in and adhere to. And it seems to offer rare insights into the mechanics of mankind and its component parts, from the individual human as an integral part of the devine creation, to their combinations in the current form of national states which are organized and governed in line with the current dominent understanding of devine design, be it - as in pharaonic times - by devine birth, or by way of the current, more or less "vox populi, vox dei". To wit:
-    The Pharao who introduced monotheism may not have done so for "religious", but primarily for political & economic reasons. For that may have been the most effective, if not the only way to overcome the resistance of his economy-controlling priests - i.e. the thus powerful earthly representatives of a plethora of gods. I.e. resistance to his plans to effectively prepare for and provide for the upcoming 7 lean years by raising from the traditional 10 to the temporarily elevated 20% the harvest contributions the thus "nationalized" religious estates were to deliver to Pharao's national graneries. By no longer recognizing their gods, he thus drew the carpet from under his egocentric priests and freed his hands to successfully execute his visionary plans (www.solami.com/a1.htm).
-    The French kings - and their more recent republican successors - may have regranted their citizens the right to anonymous gold possession only when their war-depleated treasuries could be filled again by amnesties for past & current gold hoardings.
-    Some - particularly Western - U.S. States, as well as Turkey, Tajikistan and other countries are known to have adopted the Swiss Civil Code of 1907, where the first ten articles reflect fundamental principles and achievements of civilized society, perhaps drawing inspiration from the Avesta, the Ten Commandments and other ancient writings. Also, the universally postulated presumption of innocence until proven guilty, provides a helpful guideline when considering the above question of citizen/state relation - not least in fiscal matters. Yet, when looking around, I find myself to travel on the wrong train, and perhaps even to live in the wrong time period with my view that taxmen here and there, preposterously, have managed over the last decades to stealthily shove the burden of proof from their office onto the taxpayers' shoulders. For a Swiss employee, e.g., it isn't sufficient anymore to turn in his tax declaration in time and, with his signature, to engage his penal responsibility for false declarations; the law now obliges him to attach the salary certificate (.../lohnausweis.htm) as proof of what he declares, thus not only diminishing his signature but also - in law and effect - submitting him to state tutelage. This is seen to be in direct contradiction to article 8 of the Swiss Civil Code, which explicitly provides that it is incombant on each party to prove the facts from which it deducts its claims. And it is all but clear why, of all entities, the relatively much more powerful state should be exempted from this fundamental rule, particularly in fiscal matters.
-    Of course, I am not sure what, if any influence a more benevolant reception of Silvio Gesell's monetary ideas might have had on the course of events leading up to and beyond the demise of the Weimar Republic. But neither can I rule out a link between both academia's and the national monetary authorities' manifest failure to-date to explore and develop those ideas and such watershed events as the 1929 Crash (.../1929.htm), Roosevelt's 1933 bank holiday & gold criminalization, Hitler's comprehensive looting of Jewish properties culminating in the Holocaust, Nixon's 1971 closing of the gold window, Bush's disaster-prone flat-earth "policies" on Iraq and elsewhere, and the forthcoming financial tsunamis & the ensuing political upheavals.

As of now, I have little to offer in the way of ready-made solutions. And I am in no position to really make a dent anywhere - even if some of the ideas taking shape in my mind were of any current use to anybody. Nevertheless, I'd appreciate your comments on some related observations, as summarized: .../costbenefit.htm ¦ .../swissbanks.htm#Titanic ¦ .../1929.htm ¦ .../bubbles.htm ¦ .../hedge.htm ¦ .../warfare.htm ¦ .../swift.htm ¦ .../porkbellies.htm. While looking forward to hearing from you at your earliest convenience, I remain, with Season's Greetings

Anton Keller, Geneva - 0114122-7400362 - swissbit@solami.com ¦ url: www.solami.com/goldies.htm
.../capitalism.htm ¦ .../buccaneers.htm¦ .../1929.htm ¦ .../hedge.htm ¦ .../bubbles.htm¦ .../swissbanks.htm ¦ .../warfare.htm ¦ .../oecdmandate.htm ¦ .../costbenefit.htm ¦ .../crime.htm ¦ .../glasnost.htm ¦ .../vision.htm

Roosevelt Quote: "The United States Constitution has proved itself the most marvelously elastic compilation of rules of government ever written."

Editorial

January 9, 2006

Recklessness in Indonesia

Freeport-McMoRan, an American company that operates a giant open-pit copper and gold mine in Papua, is a major contributor to Indonesia's economy. The company is also one of Indonesia's most reckless polluters and a source of hard cash - cash the company concedes is protection money - for the Indonesian military, which has one of the worst human rights records anywhere.

A recent report in The Times by Jane Perlez and Raymond Bonner described Freeport's activities in great detail. The report was part of a series of articles over the past year detailing environmental and other abuses by American mining companies at home and abroad.

Several of these companies are being sued by local governments that argue that these companies' environmental practices would never be tolerated in America and that local citizens are seeing too few of mining's benefits while paying too heavy a price. Newmont Mining, based in Denver, has been sued by the Indonesian government for dumping poisoned wastes in local waters, and Placer Dome, based in Canada, has been sued by a Philippine province for similar infractions.

Freeport's activities are particularly disheartening. Over the past decade, the company has built what amounts to an industrial city in Indonesia's easternmost province. On the plus side, the company provides jobs for 18,000 people and, according to company estimates, has provided Indonesia with $33 billion in direct and indirect benefits from 1992 to 2004, almost 2 percent of the country's gross domestic product.

The environmental damage, however, has been breathtaking. So far, the company has produced about one billion tons of waste, with five billion more tons to come before the operation shuts down. Some of this waste has been dumped into the mountains surrounding the mine, and some into a system of rivers that descend steeply into the island's low-lying wetlands and coastal estuaries. The damage has been enough to render the rivers, wetlands and parts of the estuaries - all critical to the food chain - unsuitable for aquatic life.

Meanwhile, records show that between 1998 and 2004, Freeport gave officers in the police and military nearly $20 million in direct payments in addition to tens of millions more for military infrastructure like barracks and roads. The company told The Times that the payments were necessary to provide a secure working environment for its employees, and that "there is no alternative to our reliance on the Indonesian military and police."

Papua has long been home to a low-level, separatist insurgency against the central government, which made the company nervous. Yet what is missing from the company's response is any recognition that its environmental practices contributed to the unrest and allowed the military to establish a strong presence in a region where it had barely a toehold before Freeport arrived.

Freeport's environmental record and its support for the Indonesian military have caused rumbles in Washington, particularly among human rights advocates like Patrick Leahy, a Democratic senator from Vermont. Citing human rights abuses, Congress in 1992 restricted arms sales and most American training for Indonesian officers, and it enacted new prohibitions in 1999 after a rampage by army-backed militia in what was then East Timor Province. Mr. Leahy sharply criticized Secretary of State Condoleezza Rice's decision to resume aid last year, which the administration described as a reward for Indonesia's improved human rights record and its cooperation with the post-Sept. 11 counterterrorism campaign.

Indonesia's critics say that the present government is an improvement over the authoritarian rule of President Suharto, who ran the country for three decades ending in 1998. Yet the military continues its abusive practices. Setting aside for the moment Freeport's environmental horror show, the company is not doing Indonesia's civilian authorities any favors by underwriting the generals. Freeport describes its payments as an essential cost of doing business. But it appears not to have measured the costs to democracy.

Liebes Ratsmitglied,
    Unter dem Suchbegriff "Gold" finden sich in der Curia Vista derzeit 115 parlamentarische Vorstösse. Hinter einzelnen Titeln, die manchmal einen Zusammenhang mit Gold nicht einmal vermuten lassen, verbergen sich mitunter echte Informationsperlen - wie dem nachfolgenden Chronologieauszug zu entnehmen ist: "Nabelschnurblut", "Strategische Rohölreserven im Ausland", "100 Millionen Franken zur Beschleunigung der Bildungsoffensive im Jahre 2001", "Amerikanisches Abhörzentrum Shakarchi?", "Der Bundesrat und das Völkerrecht", "Wo ist unser Gold?", "Goldreserven der SNB in den USA", "Wiedereinführung des Goldstandards", und "Primat der Politik beim Verwalten der Goldreserven". Es ist dies sodann ein aufschlussreicher & anregender Querschnitt - auch bezüglich der sich abzeichnenden gesellschaftlichen, wirtschaftlichen & aussenpolitischen Fragestellungen und Entwicklungen.
    Und ohne den derzeitigen Mitgliedern des Bundesrates zu nahe treten zu wollen: ich kann mir die schon wiederholt von Ratskollegen gestellte Frage der verfassungs- und gesetzmässigen Zuständigkeit nicht verkneifen. Nämlich wer hierzulande real die politische Verantwortung trägt, wenigstens für's Eingemachte (dem Vernehmen nach sogar im Notfall), d.h. für den aussenpolitischen & -wirtschaftlichen strategischen Einsatz unserer Goldreserven, deren Schutz vor Erpressung und Terroranschlägen im Ausland, und für entsprechende Umdisponierungen, welche gemäss Verfassung (Art. 54 Abs. 1, 174, 184, 185, 187 Abs. 1a), und Nationalbankgesetz (Art. 5 Abs. 3, 7 NBG) allesamt der bundesrätlichen Domäne unterstehen soweit sie die Aussenbeziehungen der Schweiz betreffen. Und da gemäss Art.6 NBG die Unabhängigkeit der Nationalbank sich wesentlich auf innerstaatliche technische Fragen beschränkt, ernüchtert die Aussage des damaligen Finanzministers im Nationalrat: "Wo diese Goldbarren nun genau liegen, kann ich Ihnen leider nicht sagen, weil ich es auch nicht weiss, es nicht wissen muss und es nicht wissen will." (AB 2003 N 156; Frage Günter 04.5154).
    Allzuoft noch zeichnen sich die vom Bundesrat auf der punktierten Linie unterzeichneten Antworten auf parlamentarische Vorstösse aus durch verwaltungs-typische Abwehrhaltungen, Engstirnigkeit & ARIGIN-Phänomena (für: ARroganz, IGnoranz, INkompetenz). Bei der bisherigen Verarbeitung der völkerrechtswidrigen Verarrestierung der ausgeliehenen Gemälde des russischen Puschkin-Museums ist dies besonders deutlich zum Ausdruck gekommen (www.solami.com/arrest.htm ¦ .../arrestabwehr.htm ¦ .../initiative.htm). Von einem mehr als punktuell erleuchteten, zukunftsweisenden & hoffnungs-trächtigen Heft-in-die-Hand-Nehmen durch den Bundesrat kann m.E. jedenfalls erst ausnahms- & ansatzweise die Rede sein. Z.B. in der eben vom Bundesgericht gestützten, und vom Postulat Stähelin 04.3464 vorgespurten Wiederbelebung unseres in Vergessenheit geratenen Handels- und Niederlassungsvertrags mit Russland von 1872. Nicht aber im Verhältnis zu den USA, wo allen Warnungen zum Trotz mehr Spiegelbilder verfolgt als vergessene & neue Gelegenheiten wahr genommen werden (.../europa.htm ¦ .../extradition.htm ¦ .../ciaprisons.htm). Und schon gar nicht im ebenfalls durch Verdrängung geprägten Verhältnis zu Europa (.../europae.htm ¦ .../regiogenevensis.htm ¦ .../wasser.htm ¦ .../swissbanks.htm).
    Aber vielleicht ergeht es auch unseren Bundesräten so: ob der allgemeinen Saturierung - und internet-technologisch noch zugespitzten Überlastung - kommen sie, einmal im Amt, kaum mehr dazu, die eigenen Adrenalin-Erfahrungen mit Bundesratsantworten zu berücksichtigen. Dies lässt sich z.B. an den pre- und post-referenda Vorstössen des damaligen Vertreters des Standes Appenzell A.-Rh. zur "Verwendung der Goldreserven" aufzeigen. Aber auch an den Folgen seiner seitherigen Abkapselung und seltener gewordenen Erleuchtung (.../merz.htm), die trotz hartnäckiger Vorstösse aus Parlamentskreisen i.S. Goldreserven-Verwaltung den Eindruck einer erstaunlichen und wenig Gutes verheissenden Abgehobenheit vermitteln - wenigstens im Falle der Anfrage Kaufmann. Dies ganz im Gegensatz zu seinen vorausgegangenen Bemühungen zur zwar diskreten aber entschieden politisch bestimmten, proaktiven Verminderung unserer Exponierung gegenüber den traditionell rücksichtslosen, konfiskatorischen und goldeigentums-feindlichen amerikanischen Goldpraktiken: siehe dazu auch Henry Mark Holzer's bemerkenswert anschauliche Studie "How Americans Lost Their Right To Own Gold And Became Criminals in the Process" ¦ .../goldpossession.htm ¦ .../costbenefit.htm ¦ .../oecdmandate.htm).
    In diesem Sinne wünsche ich Ihnen alles Gute im Neuen Jahr, bedanke mich für das mir bisher bezeugte Vertrauen, und stehe für weitergehende Fragen nach Kräften gerne zur Verfügung.

Anton Keller, Genf 022-7400362 swissbit@solami.com ¦ url: www.solami.com/cvgold.htm ¦ .../a2.htm (3.1.06, update 17.6.07)

Chronologie

08.3718 - Motion.    Freysinger Oskar
Bretton Woods-Nachfolgekonferenz und Währungs-Selbstschutz
"Der Bundesrat wird beauftragt, die Einberufung einer Bretton Woods-Nachfolgekonferenz zu prüfen, und in Absprache mit interessierten ausländischen Regierungen vorzubereiten. Im Interesse der Schweizer Wirtschaft ist die Nationalbank anzuhalten, die von ihr gepflegte Praxis der faktischen Anbindung des Schweizer Frankens an den amerikanischen Dollar unverzüglich aufzuheben. Und es sind alle Abklärungen und Vorbereitungsmassnahmen zu treffen, welche für eine allfällige Rückkehr zu einer beständigen schweizerischen Realwert-Währung geeignet sein mögen, inklusive sofortige Unterbindung aller Goldverkäufe der Nationalbank zur Stützung der amerikanischen Währung." (English translation)
08.491 - Parlamentarische Initiative.    Stamm Luzi
Stopp weiterer Goldverkäufe durch die Nationalbank
08.489 - Parlamentarische Initiative.    Stamm Luzi
Gold-Währungsreserven der Nationalbank schrittweise erhöhen
08.469 - Parlamentarische Initiative.    SVP-Fraktion
Lagerung der Goldreserven der Nationalbank in der Schweiz
"Gestützt auf Artikel 160 Absatz 1 der Bundesverfassung und Artikel 107 des Parlamentsgesetzes reichen wir folgende parlamentarische Initiative ein:
Artikel 99 der Bundesverfassung ist mit einem zusätzlichen Absatz mit folgendem Text zu ergänzen: 'Die Goldreserven der Nationalbank werden in der Schweiz gelagert.'"
08.404 - Parlamentarische Initiative.     SVP-Fraktion
Schutz der Goldreserven im Interesse unseres Landes
07.3709 - Interpellation.    Stamm Luzi
Wo liegt das Nationalbankgold?
07.3708 - Postulat.     Stamm Luzi
Hintergründe des Goldverkaufs der Nationalbank
"Der Bundesrat wird beauftragt, dem Parlament einen Bericht über die Hintergründe des Goldverkaufs der Nationalbank vorzulegen. Wer hat wann - und aus welchen Gründen - die verschiedenen Goldverkäufe vorgeschlagen? Im Speziellen ist die Frage zu beantworten, ob es Abmachungen mit ausländischen Nationalbanken zum koordinierten Verkauf von Gold gibt."
07.481 - Parlamentarische Initiative.     Stamm Luzi
Wahrung von Goldbeständen in der Schweiz
07.5267 - Fragestunde.     Kunz Josef
Goldverkäufe der Nationalbank
06.5115 - Fragestunde. Frage. Bührer Gerold
Will die Nationalbank weitere Goldreserven verteilen?
"Gemessen an der Grösse und an der Bedeutung des Schweizer Finanzsystems sind die Währungsreserven unseres Landes sogar knapp dotiert. Es besteht daher kein Spielraum für eine weitere Reduktion der Währungsreserven beziehungsweise für weitere ausserordentliche Goldverkäufe der Nationalbank." Bundesrat H.R.Merz (AB 2006 N 865)
05.5117 - Fragestunde. Frage. Kaufmann Hans
Verfügungsgewalt über SNB-Gold im Ausland
05.3172 - Postulat. Freysinger Oskar
Strategische Rohölreserven im Ausland
05.3166 - Interpellation.    Freysinger Oskar (Abgeschrieben, weil seit mehr als zwei Jahren hängig.)
Primat der Politik beim Verwalten der Goldreserven
"Das Nationalbankgesetz (SR 951.11) bestimmt die Aufgaben, Kompetenzen und Vorrechte der Nationalbank. Im Gesamtinteresse des Landes führt sie die Geld- und Währungspolitik und gewährleistet die Preisstabilität unter Berücksichtigung der konjunkturellen Entwicklung (Art. 5 Abs. 1 NBG).
In den auswärtigen Beziehungen, deren Handhabung gemäss Bundesverfassung dem Bundesrat untersteht (Art. 54 Abs. 1, 174, 184, 185, 187 Abs. 1a), ist die Nationalbank in der Wahrnehmung ihrer Aufgaben gehalten, mit dem Bundesrat zusammenzuarbeiten (Art. 5 Abs. 3 NBG). Zur Wirtschaftslage, zur Geld- und Währungspolitik sowie zu aktuellen Fragen der Wirtschaftspolitik des Bundes erfüllt die Nationalbank ihre Pflicht zur Rechenschaftsablegung und Information durch regelmässige Kontakte mit dem Bundesrat. Und "vor Entscheidungen von wesentlicher wirtschaftspolitischer und monetärer Bedeutung" unterrichten sich der Bundesrat und die Nationalbank gegenseitig (Art. 7 NBG).
Die in Artikel 6 NBG umschriebene Unabhängigkeit der Nationalbank beschränkt sich demnach auf innerstaatliche technische Fragen. Im Sinne des verfassungsmässigen Gesetzgebers vermindert diese technische Unabhängigkeit keineswegs die Informations- und Konsultationspflichten der Nationalbank gegenüber dem Bundesrat in einschlägigen politischen, vor allem aussenpolitischen Fragen. Dazu gehören nicht zuletzt die Wahl, die fortlaufende Beobachtung und die politische Einschätzung der ausländischen Standorte, sich daraus allenfalls ergebende Standortwechsel sowie insgesamt die Verwaltung und Aufteilung der Goldreserven auf die in- und ausländischen Depotorte." NR Freysinger (AB 2005 N 964)
04.5154 - Fragestunde. Frage. Günter Paul
Wo ist unser Gold?
04.3283 - Postulat. Grüne Fraktion
Begrenzte Ölvorräte. Szenarien
03.5101 - Fragestunde. Frage. Scherer Marcel
Stopp des Goldverkaufes aus den Währungsreserven der SNB
03.5038 - Fragestunde. Frage.    Günter Paul
Schweizer Gold in den USA
03.3213 - Interpellation. Abate Fabio
Nationalbankgold für Eisenbahn-Grossprojekte?
03.2004 - Petition. Hirt Walter
Goldverkäufe der SNB sind einzustellen
02.447 - Parlamentarische Initiative. Dupraz John
Goldreserven der Nationalbank. Ausgewogene Verteilung
02.3593 - Interpellation. Steiner Rudolf
Fehlende Depeschen im EDA
02.3452 - Motion. Merz Hans-Rudolf
Verwendung der veräusserten Goldreserven
02.3089 - Interpellation.    Merz Hans-Rudolf
Verwendung der Goldreserven nach dem 22. September 2002
02.1159 - Einfache Anfrage. Baumann J. Alexander
Verunstaltung des schweizerischen Hoheitszeichens
00.3560 - Motion. Riklin Kathy
100 Millionen Franken zur Beschleunigung der Bildungsoffensive im Jahre 2001
00.3298 - Motion. Freisinnig-demokratische Fraktion
E-Switzerland. Gesetzesänderungen, Zeitplan und Mittel
00.3293 - Motion.Zisyadis Josef
Eidgenössische Pensionskasse für die Landwirtschaft
00.3149 - Interpellation. Guisan Yves
Stiftung solidarische Schweiz. Wie weiter?
98.3495 - Interpellation. Stamm Luzi
Kritik an der Bergier-Kommission
98.3476 - Interpellation. Gusset Wilfried Ernest
Goldreserven der SNB in den USA
98.3244 - Interpellation. Schlüer Ulrich
Der Bundesrat und das Völkerrecht
98.3137 - Interpellation. Hollenstein Pia
Aufklärung bezüglich Mobutugelder
98.2016 - Petition. Wahl Edouard
Revision aller Todesurteile sowie Revision aller weiteren existenzbrechenden Strafurteile wegen Landesverrat sowie Petition für die Revision des Washingtoner Abkommens von 1946
98.1145 - Einfache Anfrage.    Gusset Wilfried Ernest
Einsatz der Nationalbank-Währungsreserven für die Grossbanken
97.5037 - Fra. Schmied Walter.
Golddeckung des Frankens
97.3629 - Interpellation. Sozialdemokratische Fraktion
Raubgold und die Schweiz
97.3364 - Interpellation. Felten Margrith
Nabelschnurblut
97.3073 - Interpellation. Spielmann Jean
Nutzung des Nationalbankvermögens
97.3027 - Interpellation. Aguet Pierre
Verschlechterung des Image der Schweiz und der Schweizer Wirtschaft. Rolle der Banken
97.1148 - Einfache Anfrage.Dardel Jean-Nils
Gestohlenes Gold aus Südafrika
97.1116 - Dringliche Einfache Anfrage. Rechsteiner Paul
Die Schweiz und das Raubgold
96.3016 - Interpellation. Tschopp Peter
Währungsreserven. Änderung der Politik
91.5033 - Fra. Ziegler Jean.
Kriegskasse der P-26
90.5157 - Fra. Hafner Rudolf.
Einlösungspflicht für Banknoten
88.1078 - Einfache Anfrage. Weder Hansjürg
Amerikanisches Abhörzentrum Shakarchi?
86.928 - Interpellation. Salvioni Sergio
Entgegennahme von Geldern zweifelhafter Herkunft
86.568 - Interpellation. Oehen Valentin
Wiedereinführung des Goldstandards
85.512 - Motion. Bürgi Jakob
Finanzplatz Schweiz. Förderung

url: www.solami.com/cvgold.htm (3.1.06)

Weltwoche 29.Juni 2006

Zur Sache, Schatz

Von Claude Baumann

Zuerst die schlechte Nachricht: Die Goldreserven der Schweiz werden zu einem fast lächerlichen Preis verkauft. Und nun die noch schlechtere: 300 Tonnen sollen nicht mehr dort sein, wo sie sein müssten. Von Claude Baumann (Text) und Dirk Fellenberg (Bild)

Würde man alles Gold zusammenschmelzen, das je gefördert wurde und in Tempeln und Tresoren, in Museen und auf dem Meeresboden liegt, entstünde ein Würfel mit einer Kantenlänge von gerade mal zwanzig Metern. Man könnte ihn in einem Öltanker versorgen oder unter den Eiffelturm schieben, wie die Deutsche Bank errechnet hat. So dicht und so knapp ist Gold.
Der Würfel hätte ein Gewicht von 150 000 Tonnen und wäre zu aktuellen Preisen etwa 3750 Milliarden Franken wert. Einen kleinen Teil davon besitzt die Schweiz: 1290 Tonnen. Dieses Gold im Wert von derzeit rund 32 Milliarden Franken gehört zu den Währungsreserven der Schweizerischen Nationalbank (SNB) und gibt aktuell wieder Anlass für heftigste Kontroversen. Denn in den vergangenen fünf Jahren hat sich der Goldpreis fast verdreifacht. Während dieser Zeit verkaufte die SNB die Hälfte ihrer Goldreserven und löste dafür zwanzig Milliarden F ranken. Damit wollte sie allfälligen Klumpenrisiken in ihrer Bilanz vorbeugen. Eine fragwürdige Spekulation, wie sich herausgestellt hat, denn inzwischen wäre dieses Gold gut dreissig Milliarden Franken wert.
Ungeachtet dessen erschallen bereits neue Forderungen, die Goldreserven zu beschneiden. Unlängst sprach die Geschäftsprüfungskommission des Nationalrats davon, eine weitere Tranche dieses Staatsschatzes zu veräussern. Letzte Woche plädierte der Lausanner Wirtschaftsprofessor Thomas von Ungern-Sternberg einmal mehr dafür, das gesamte Gold der Eidgenossenschaft zu verkaufen und den Erlös in lukrativere Anlagen zu investieren. Und im nächsten September kommt eine Volksinitiative (Kosa) zur Abstimmung, die einen Teil der Nationalbank-Gewinne - und damit auch des Goldes - in die Kassen der AHV überweisen will. Das alles ist paradox, denn die meisten Auguren gehen davon aus, dass der Goldpreis in den nächsten Jahren noch erheblich steiler ansteigen wird.

Den Schatz in der Heimat hüten
    Viele Schweizerinnen und Schweizer gehen davon aus, dass unser Gold noch immer im amerikanischen Fort Knox im Bundesstaat Kentucky gelagert sei, wo während des Zweiten Weltkriegs zahlreiche europäische Staaten ihre Goldvorräte in Sicherheit brachten. Andere Vermutungen gehen dahin, dass das Gold in einem unterirdischen Bunker in New York liegt. Doch die Nationalbank, so haben Recherchen der Weltwoche ergeben, baute in den letzten Jahren ihre Goldbestände in jenen Ländern ab, wo der Schutz von Staatsguthaben nicht mehr gesichert ist. Dazu zählen auch die USA. Das dortige Rechtsverständnis wird wegen seiner Unwägbarkeiten als Risikofaktor betrachtet - «weil es eine Realität des amerikanischen Systems ist, dass ein Richter einfach kommen und aufgrund einer Klage irgendwelche Vermögenswerte konfiszieren kann», sagt ein hoher Mitarbeiter der SNB. Mehrheitlich repatriierten die Notenbanker das Gold, wie inoffiziell eingeräumt wird: «Der grosse Teil unseres Goldvolumens lagert nun an verschiedenen Orten in der Schweiz.» Und: «Von den informierten Kreisen geht niemand mehr davon aus, dass Schweizer Gold in den USA liegt.» Den kleinen Teil, der sich noch im Ausland befindet, hat die SNB in sogenannte Triple-A-Länder transferiert. Gemeint sind damit Länder, in denen ein historisch gewachsenes Rechtsverständnis existiert, das Staatsguthaben zuverlässig schützt. Dazu zählen vor allem Kanada und Grossbritannien, wie es bei der SNB intern heisst.
    Das ist ein Paradigmenwechsel: Über Jahrzehnte hinweg verliess sich die Schweiz auf die Dienste der USA. Heute, in einer Welt mit veränderten geopolitischen Akzenten, ist das nicht länger der Fall. «Wenn irgendwo auf der Welt etwas passiert, das unsere Goldbestände tangiert, rufen wir die Vorräte ab, schicken sie anderswohin oder bringen sie heim», lautet nun die Devise der SNB. Oder mit anderen Worten: Die Schweiz will ihren Goldschatz nicht länger dem latenten Zugriffsrisiko amerikanischer Richter aussetzen.
    Offiziell macht die SNB dazu keine Angaben - «aus Sicherheitsgründen», wie Nationalbank-Sprecher Werner Abegg anfügt. Ein Staatsgeheimnis? Selbst dem eher besonnenen früheren Bundesrat Kaspar Villiger platzte einmal im Nationalrat deswegen der Kragen. Entnervt erklärte er: «Wo diese Goldbarren nun genau liegen, kann ich Ihnen leider nicht sagen, weil ich es auch nicht weiss, es nicht wissen muss und es nicht wissen will.»
    Wie gross der Schweizer Goldschatz nun tatsächlich ist, darüber gehen die Meinungen auseinander. Offiziell besitzt die Schweiz 1290 Tonnen. Mit einem Wert von rund dreissig Milliarden Franken machen sie einen Drittel der SNB-Aktiven aus. Ob das Gold aber auch physisch vorhanden ist, bleibt umstritten. «Zwischen den ausgewiesenen und den tatsächlich vorhandenen Goldbeständen besteht keine Differenz», sagt Werner Abegg. Manche bezweifeln dies. In der Vergangenheit waren das vor allem die sogenannten Goldbugs. Jene Leute also, die das gelbe Edelmetall seit Jahr und Tag vergöttern, viele Goldbarren in ihren Tresoren horten und sich an die Zeiten erinnern, als die Welt noch in Ordnung war, weil alle wichtigen Währungen mit Gold gedeckt sein müssten und die Notenbanken nur so viel Papiergeld drucken konnten, wie sie dafür Gold zur Deckung hatten.
    Heute ist das passe; selbst die Schweiz hob mit einem Parlamentsbeschluss von 1999 die Goldbindung des Frankens auf. Der im vergangenen Jahr verstorbene Zürcher Privatbankier Ferdinand Lips zählte bis zu seinem Tod zu den Verfechtern des Goldstandards, weil er davon ausging, dass das Papiergeld dereinst wertlos werden würde. Umso wichtiger seien daher hohe und gesicherte Goldbestände. Lips' Publikationen gelten heute als Offenbarung für viele Goldbugs, die davon besessen sind, dass ein Grossteil der Reserven der Zentralbanken gar nicht mehr vorhanden ist.

Abnehmende Bestände
    Anfang Jahr nun erhielten sie überraschend Sukkurs vom französischen Finanzkonzern Credit Agricole, der mit einer 56-seitigen Studie für Aufsehen sorgte: Darin heisst es, dass die westlichen Zentralbanken - und damit auch die schweizerische - heute nachweislich 10 000 bis 15 000 Tonnen Gold weniger besitzen als die offiziell gemeldeten 31 000 Tonnen. Autor der Studie ist der britische Metall- und Minenexperte Paul Mylchreest von Cheuvreux, einem Brokerhaus, das zum Credit Agricole gehört. Für seine Berechnungen stützte er sich auf historische Daten, er untersuchte die Aktivitäten mit Derivaten aus den Berichten der Bank für Internationalen Zahlungsausgleich (BIZ), und er besorgte sich Ein- und Ausfuhrzahlen von Goldtransfers von und nach Grossbritannien, einer der wichtigsten Drehscheiben für das gelbe Metall. Tiefere Goldbestände hätten die Zentralbanken deshalb, weil sie einen Teil davon fahrlässig ausgeliehen haben, sagt Mylchreest. Als der Goldpreis zwischen 1980 und 1999 von 850 auf 250 Dollar pro Unze absackte, hätten zahlreiche westliche Notenbanken einen Teil ihrer Reserven gegen eine bescheidene Kommission (rund ein Prozent) an grosse Geschäftsbanken wie JP Morgan, UBS, Goldman Sachs oder die Deutsche Bank ausgeliehen. So Hesse sich das Gold rentabler bewirtschaften, als wenn es in den Tresoren lag, argumentierten die Zentralbanker. Die Geschäftsbanken verkauften das Gold weiter an andere Finanzinstitute oder an Schmuckhersteller und legten den Erlös in besser rentierende Staatsanleihen zu etwa vier Prozent an. Das war leicht verdientes Geld, solange der Goldpreis tief blieb oder sank. Sobald die Finanzinstitute ihren Verbindlichkeiten gegenüber den Zentralbanken nachkommen mussten, beschafften sie sich das benötigte Gold zu tieferen Preisen am Markt. So funktionierte der Gold-Carry-Trade, wie Experten diese Transaktion nennen.
    Nach dem Börsenkrach von 2001 und 2002 veränderte sich die Ausgangslage jedoch drastisch, da der Goldpreis nachhaltig zu steigen begann. Viele Investoren entdeckten im Gold eine Anlagealternative zu den Aktien. Gleichzeitig begannen asiatische Zentralbanken, Edelmetall zu kaufen, um ihre Währungsreserven aus der Abhängigkeit des Dollars zu befreien. Für die im Gold-Carry-Trade involvierten Banken hatte das ungeahnte Folgen. Sie konnten sich nicht mehr am Markt zu günstigeren Preisen mit dem benötigten Gold eindecken. Und das effektiv ausgeliehene Gold hatten die Schmuckhersteller längst zu Ringen und Halsketten verarbeitet, oder es lagerte in den Tresoren der Käufer. Mit dem weiteren Anstieg des Goldpreises in den letzten drei Jahren hat sich die Situation so zugespitzt, dass die Geschäftsbanken den Zentralbanken bis zu 15 000 Tonnen Gold schulden. Zu viel, als dass sie es jemals physisch wieder zurückbezahlen könnten, resümiert Paul Mylchreest.
    Zu ähnlichen Schlussfolgerungen kommt auch der Zürcher Publizist und Finanzexperte Walter Hirt in Bezug auf die Schweizerische Nationalbank. Er geht davon aus, dass die physischen Goldreserven der SNB nicht 1290 Tonnen betragen, sondern bis zu 300 Tonnen tiefer sein könnten - was immerhin einer Differenz von aktuell 7,5 Milliarden Franken entspräche. Walter Hirt stützt seine Annahmen auf Hinweise in den Geschäftsberichten der SNB, wonach mehrere hundert Tonnen Gold ausgeliehen seien.
    Selbst heute, nachdem die Gold-Carry-Trades aller Zentralbanken aufgrund des gestiegenen Goldpreises massiv rückläufig sind, weist die SNB per Ende 2005 immer noch 135 Tonnen Gold aus, das physisch an in- und ausländische Finanzinstitute ausgeliehen ist. Ein Risiko? Als Sicherheit habe die SNB dafür «Effekten» - gemeint sind erstklassige Obligationen - erhalten, sagt Nationalbank-Sprecher Werner Abegg.

Tiefere Reserven, explodierende Preise
    Walter Hirt, der bereits 2002 mit einer Petition das Parlament in Bern auch dazu aufrief, die Goldverkäufe der SNB einzustellen, weist indessen daraufhin, dass sowohl die deutsche wie auch die britische Zentralbank als Folge von Carry-Trades in den letzten Jahren die Höhe ihres ausgeliehenen Goldes nachträglich korrigieren mussten. Das ist brisant. «Wenn sich die Erkenntnis weiter durchsetzt, dass die Goldreserven westlicher Zentralbanken tatsächlich tiefer sind, wird der Preis explodieren», sagt Marc Gugerli. Der vierzigjährige Zürcher zählt in der Schweiz zu den profundesten Kennern der Materie. Mit seinem Know-how berät er so renommierte Finanzhäuser wie die Bank Julius Bär, die Zürcher Kantonalbank oder Lombard Odier Darier Hentsch. Daneben betreibt er mit einigen Partnern einen eigenen Goldfonds. Insgesamt verwaltet er eine Milliarde Franken, die in physisches Gold (Barren) und in Goldminenaktien investiert ist.
    Als sich Marc Gugerli vor bald zehn Jahren «aus einem Bauchgefühl heraus» für das Edelmetall zu interessieren begann, kostete die Unze 250 Dollar. In den Neunzigern habe sich niemand für Gold interessiert, erinnert er sich. Die Welt stand im Bann der New Economy und des Aktienbooms. Er fand aber, dass eine Anlageklasse wie Gold, die jahrhundertelang als Gegenwert für Papiergeld gedient hatte, nicht einfach verschwinden konnte. Darum machte sich der UBS-Banker selbständig. Inzwischen ist Gugerli überzeugt, dass der Preis für eine Unze Gold in den nächsten Jahren «auf 1000, 2000, möglicherweise sogar auf 5000 Dollar» steigen wird. Wenn er das sagt, wirkt er so gelassen, dass seinen Projektionen etwas Selbstverständliches anmutet. Derzeit kostet die Unze Gold knapp 600 Dollar, umgerechnet etwa 750 Franken.
    «Gold ist extrem knapp», sagt Gugerli. «Der globalen Nachfrage von jährlich knapp 4000 Tonnen steht ein Angebot von 2500 Tonnen gegenüber. Bisher konnte die Lücke durch die Ausleihungen und Verkäufe der Zentralbanken grösstenteils ausgeglichen werden. Doch je stärker die Nachfrage zunimmt, desto weniger wird das möglich sein.» Von der Angebotsseite ist auch nicht viel zu erwarten, da viele Explorationsfirmen es versäumten, neue Vorkommen zu fördern. Aufgrund des tiefen Preises lohnte sich das gar nicht mehr. «Das Fehlen neuer grösserer Goldfunde wird darum auch künftig den Preis stark beeinflussen», bestätigt SNB-Direktor Philipp Hildebrand.
    Gold, lange verschmäht, avanciert damit vom Rohstoff zum hochlukrativen Investment. An der Börse hat sich das noch kaum niedergeschlagen. Die existierenden Reserven, inklusive offizieller Bestände der Zentralbanken (31 000 Tonnen), machen heute 1,4 Prozent der globalen Marktkapitalisierung aller Finanzprodukte aus. Zum Vergleich: Im Jahr 1934 machte das Gold gut 20 Prozent der weltweiten Börsenkapitalisierung aus, 1982 waren es sogar 25 Prozent. Auch der Wert aller Goldminenfirmen ist mit rund 200 Milliarden Dollar ein Klacks. Er entspricht gerade einmal jenem eines Blue-Chip-Unternehmens wie Shell oder Toyota.
    Gold als heisseste Anlage der Zukunft? Selbst wenn die Volatilität wie bei allen anderen Rohstoffen überdurchschnittlich hoch ist und es dadurch auch immer wieder zu Kurseinbrüchen kommt, zweifeln die Experten kaum am langfristigen Kurspotenzial des Edelmetalls. Der Amerikaner Jim Rogers, der in den siebziger Jahren als Finanzpartner von Investor George Soros ein Vermögen machte, geht davon aus, dass sich die Welt erst am Anfang einer fünfzehn- bis zwanzigjährigen Rohstoffhausse befindet. Einmal mit dem Motorrad und später mit einem umgebauten Mercedes reiste er um die Welt und verschaffte sich einen Eindruck vom riesigen Rohstoffbedarf in den Schwellenländern. Weil der Aufbau neuer Förderanlagen noch Jahre in Anspruch nehme, dauere der Rohstoffboom länger als jede andere Hausse, betont Rogers. «Dass sich der Ölpreis wieder abschwächt, erwartet ja auch niemand.»
    Der Amerikaner John C. Hathaway von der Firma Tocqueville Asset Management zählt zu jenen Menschen, die als Fondsmanager täglich grösste Mengen Gold bewegen. Auch er geht von einem Unzenpreis in vierstelliger Höhe aus. Seine Gründe für den Anstieg: «Im globalen Finanzsystem mit seinen vielen Derivaten stecken mittlerweile enorme Risiken. Auch die Höhe der Verschuldung amerikanischer Haushalte und die Blase im Immobiliensektor beunruhigt», sagt Hathaway. Als weiteren Unsicherheitsfaktor wertet er die Tatsache, dass mehr als vierzig Prozent der amerikanischen Staatsanleihen von ausländischen Schuldnern, darunter zahlreiche asiatische Zentralbanken, gehalten werden. Besinnen sich nur wenige Notenbanker darauf, dieses Dollar-Engagement zu reduzieren und stattdessen in Gold zu investieren, wie das in den vergangenen Jahren der Fall war, steigt der Unzenpreis weiter.
    Als das Gold im vergangenen Mai auf 730 Dollar kletterte, verglichen zahlreiche Auguren diese Entwicklung mit dem Höchststand von 1980, als es bis auf 850 Dollar gestiegen war - auch damals in einer Zeit, die von Inflationsängsten, politischen Konflikten und einem hohen Ölpreis geprägt war. Was allerdings viele Marktbeobachter vor Monatsfrist nicht berücksichtigten: Relativ gesehen entsprächen die 850 Dollar von damals einem heutigen Wert von 1700 Dollar. So besehen hat der Goldpreis noch viel Potenzial. Darum erstaunt es kaum, wenn Analyst Paul Mylchreest seinem Goldreport den Titel gab: «Start Hoarding!» - (Fangt an zu horten!)
    Angesichts steigender Preise hat auch die Finanzwelt in den letzten Jahren reagiert und eine Unmenge von Produkten und Indizes lanciert. Weit verbreitet sind sogenannte Exchange-Traded-Funds (ETF). Dabei werden mehrere Goldminenaktien zusammengefasst und gemäss einem Börsenindex angelegt. Bezogen sich solche ETF Ende 2003 noch auf rund zwanzig Tonnen Gold, haben sie heute die Grenze von fünfhundert Tonnen überschritten. Das belegt, welcher Nachfrage sich das Edelmetall bei Anlegern bereits erfreut.

Verkaufen? Reines Wunschdenken
    Nachdem die Schweizerische Nationalbank die Hälfte ihres Goldes verkauft hat, kommt den verbliebenen Reserven eine umso grössere Bedeutung zu. Schliesslich geht es bei den Goldreserven um eine Art Notgroschen unseres Landes, selbst wenn der Schweizer Franken heute nicht mehr durch das Edelmetall gedeckt sein muss. Die 1290 Tonnen entsprechen einem Anteil am Bruttoinlandprodukt von 12,5 Prozent. Im internationalen Vergleich liegt die Schweiz damit im Mittelfeld, gemeinsam mit Dänemark etwa. Allerdings besitzt der skandinavische Staat keinen bedeutenden Finanzplatz wie die Schweiz. «Deshalb entbehrt die Auffassung jeglicher Grundlage, wir verfügten noch über <überschüssige> Währungsreserven», sagt Hansueli Raggenbass, Präsident des Bankrats der SNB. Umso unverständlicher ist es, wenn Politiker von SP bis SVP weitere Gold verkaufe suggerieren. Der Bundesrat und die SNB haben sich davon distanziert. «Weitere Verkäufe sind reines Wunschdenken», sagt SNB-Direktor Philipp Hildebrand.
    Mehr Sorge bereitet den Währungshütern die im September zur Abstimmung gelangende Kosa-Volksinitiative. Sie fordert, dass Gewinne der Nationalbank der AHV zugeführt werden. Allerdings gehen die Initianten von einem gleichbleibenden Gewinn der SNB aus, der in den letzten Jahren gerade dank der Goldverkäufe überdurchschnittlich hoch ausfiel. Um solch einen weiterhin zu garantieren, müsste die SNB ihre Aktiven riskanter bewirtschaften. Damit verlöre sie aber ihre Unabhängigkeit und würde zum Spielball politischer Begehrlichkeiten. In einer Zeit, in der sich geopolitische Akzente verschieben und sich manche Staaten veranlasst sehen könnten, Restriktionen beim Goldbesitz zu erlassen, weil kein anderer Rohstoff in der Menschheitsgeschichte eine längere Beständigkeit besitzt, kann sich die SNB das nicht leisten. Wie haushälterisch man mittlerweile mit dem Gold umgeht, beweist die Zürcher Kantonalbank (ZKB). Vor kurzem lancierte sie einen ETF, der sich darauf beschränkt, in physisches Gold zu investieren. Mit anderen Worten: Jede Einzahlung in den Fonds wird mit Goldbarren unterlegt, so dass der Investor sein Investment jederzeit in Bargeld oder auch in physischem Gold zurückfordern kann. Damit hat der Anleger die Gewähr, dass er seine Einlage, selbst wenn es weltweit zu einschneidenden Restriktionen im Goldhandel käme, zurückfordern kann.
    Für die ZKB setzt das voraus, dass sie für den finanziellen Gegen wert des Fonds laufend neues Gold am Markt, namentlich in Zürich, London und New York, beschaffen muss. Darum fährt auch regelmässig ein gepanzerter Lieferwagen am Hauptsitz der ZKB an der Zürcher Bahnhofstrasse vor und liefert neue Barren ein. So stapelt sich das Gold in den Tresoranlagen der Zürcher Staatsbank. Bleibt zu hoffen, dass dafür nicht bei der Schweizerischen Nationalbank auf der anderen Strassenseite einige Tonnen im Tresor fehlen.

Literatur:
Peter L. Bernstein: Die Macht des Goldes. Finanzbuch, 2005.454 S., Fr. 69.40
Ferdinand Lips: Die Gold-Verschwörung. Kopp, 2003.382 S., Fr. 33.60
Robert Nef, Walter Hirt: Eigenständig. Die Schweiz - ein Sonderfall. Moderne Industrie, 2002. 362 S., Fr. 45.60
Jim Rogers: Investment Biker. Börsenmedien, 1998.497 S., Fr. 74.50
Petition gegen Goldverkäufe:www.walterhirt.ch/gold—snb.html
Gold-Studie von Cheuvreu im Internet: www.gata.org/CheuvreuxGoldReport.pdf

17.Juni 2007

BNS: 250t d'or à vendre!
Goldbürgerstreich II: SNB will weitere 250t Gold abbauen!
Email an die Mitglieder der Eidgenössischen Räte

Sehr geehrtes Ratsmitglied,

"Die Schweizerische Nationalbank passt die Struktur ihrer Währungsreserven an. Sie wird bis Ende September 2009 250 Tonnen Gold verkaufen und ihre Devisenreserven entsprechend aufstocken." So gemäss SNB-Direktionsmitglied Thomas Jordan anlässlich des SNB-Pressegsprächs vom 14.Juni 2007.

Cher Membre des Chambres fédérales,

"La Banque nationale suisse adaptera la structure de ses réserves monétaires. Jusqu'à fin septembre 2009, elle vendra 250 tonnes d'or et accroîtra ainsi ses réserves de devises." (spns). Décision communiquée à l'occasion de la Conférence de presse de la BNS du 14 juin 2007 par Thomas Jordan, Membre de la direction.

Der hierzulande gemäss Verfassung und SNB-Gesetz für solche Verfügungsentscheidungen über das Eingemachte allein zuständige Bundesrat hat vor einem Jahr - also noch vor der erhöhten Einstufung der Gefahr von systemischen Riskiken als Folge von Hedge Funds- & anderen prädatorischen Operationen - in der Fragestunde vom 12.6.06 Herrn NR Bührer wie folgt geantwortet:
"Gemessen an der Grösse und an der Bedeutung des Schweizer Finanzsystems sind die Währungsreserven unseres Landes sogar knapp dotiert. Es besteht daher kein Spielraum für eine weitere Reduktion der Währungsreserven beziehungsweise für weitere ausserordentliche Goldverkäufe der Nationalbank."
Bundesrat H.R.Merz (AB 2006 N 865)

Inzwischen sind im Mittleren Osten mehrer Krisenherde in bürgerkriegsähnliche Wirrnisse umgekippt, und weist einiges darauf hin, dass wir mit einem grösseren und unmittelbar vorausstehenden (Nuklear-)Waffengang gegen den Iran rechnen müssen. Allen voran die USA, aber auch Russland, China, Japan und die arabischen Staaten sind dementsprechend daran, ihre Papierwerte in Goldreserven umzuwandeln. Fehlte also nur noch, dass die Nationalbank von einem Hedge Fund übernommen werden könnte, und auch deren blauäugige Manager gegen die Attraktivitätskraft von goldenen Fallschirmen sich als zuwenig wiederstandfähig erweisen würden.

Bei dieser bedenklichen Sachlage gebietet sich ein unverzügliches Machtwort seitens der verfassungsmässigen Hüter der nationalen Goldreserven, sowie eine Überprüfung der einschlägigen Praktiken, Strukturen und Kompetenzen der Nationalbank.

Mit freundlichen Grüssen und besten Wünschen für eine erholsame Sommerpause.

Anton Keller, Sekretär, Schweiz. Investorenschutz-Vereinigung
022-7400362 swissbit@solami.com

PS: Zum CH/USA-Rechtshilfeabkommen (06.069) empfehle ich Ihnen angemessene begleitende Massnahmen zu beschliessen, z.B. in Form der Reaktivierung der "Beratenden Kommission" zum verlässlicheren Schutz der "Souveränität, Sicherheit oder ähnlicher wesentlicher Interessen" der Schweiz. Dies in Anlehnung an die entsprechende Formulierung im CH-USA Vertrag von 1850, wonach Rechtshilfegesuchen in Strafsachen u.a. nur dann stattgegeben werden mögen, wenn sie "genügend begründet und durch die nöthigen Aktenstücke unterstüzt" sind. Womit auch endlich der PUK-Kritik einer selbstschädigenden und "willfährigen Haltung" unserer Behörden insbesondere gegenüber den USA Nachachtung verschafft, und die Lehren aus den Aerospatiale-, Marc Rich-, und CIA-Überflugs-Affairen gezogen würden. Und womit den mahnenden Worten von Carlo Schmid nachgelebt würde:
"die USA sind im Moment kein Rechtsstaat nach unserem Standard. Von daher muss man aufpassen, was man macht. Es ist ein heikles Thema, ein heikles Gebiet. Die USA dehnen ihre Kompetenzen enorm aus und fahren die Rechte der Betroffenen enorm zurück. Hier sind wir mit unserer Auffassung natürlich noch 'altmodisch', und daher ist die Aufsicht über dieses ganze Thema von extremer Bedeutung."
(AB 2004 S 174: .../owa.htm#Schmid).

commentaire

18 juin 2007

BNS: vente de 250t d'or = affaiblissement du pays
Jean-René H. Mermoud

La leçon n'a pas suffit. Le franc suisse comme monnaie refuge est désormais un mythe : plus aucune banque centrale sérieuse ne conserve de francs suisses. La part de cette monnaie comme réserve est passée de 6 % des réserves mondiale à presque rien du tout. Le franc suisse baisse continuellement depuis l'entrée en service de l'Euro. En fonction directe des ventes d'or. Non seulement le franc suisse perd du terrain face à l'Euro, mais face à pratiquement toutes les monnaies : Livre sterling, couronne suédoise etc. Il n'y a bientôt plus que Thomas Jordan (de la BNS) pour y croire.

Pour les chinois, l'or a une importance particulière. Le franc suisse était considéré aussi longtemps qu'il correspondait à une importante réserve d'or. La BNS a perdu cette clientèle. La Russie a clairement annoncé que ses excédents seront désormais consacré non plus à l'achat de monnaies étrangères, mais à l'investissement dans le redressement de son industrie et dans le redéploiement de sa position pétrolière. Quand à l'excédent algérien, il va directement de là où il provient : aux USA. Sur quoi repose donc la valeur du franc ? sur la force de notre économie ? avec Sulzer qui a perdu sa division fonte et celle de la construction des moteurs de bateaux ? avec Castolin qui s'est expatrié en allemagne ? avec Phillip Morris qui n'est venu que pour les économies fiscales et qui met les chômeurs qu'elle produit à la charge de la caisse publique ? avec Oerlikon B qui est incapable de concéder une part de son capital en échange d'un des plus gros marché mondiaux, préférant ménager la susceptibilité nombriliste de quelqus gnomes qui n'ont plus d'autres interlocuteurs qu'eux-mêmes ! C'est vrai, les gnomes ont sauvé Saurer d'une prise de participation "sauvage". Qu'ont-ils sauvé en réalité : le nombril hélvétique, sinon son
destin.

Comble de la privatisation, la SIC AG, notre clearstream à nous, est géré sous forme de ... société privée. Comme si la monnaie était une marchandise comparable au gruyère. Le cours CHF/big mac en quelque sorte. Un vrai modèle de gestion selon les bonnes vieilles recettes Swissair. Tout le monde est innocent, peu importe les cadavres. Vendez M. Jordan. Vendez-nous, vendez-vous. Notre pays n'aura absolument plus aucun avenir.

Today's Zaman, AP April 9, 2008

IMF approves sale of 400 tons of gold to close budget gap

The International Monetary Fund's executive board approved on Monday a broad financial overhaul plan that envisages the eventual sale of 403.3 tons of its substantial gold supplies. The sale cannot occur without approval by the US Congress and legislative action in many of the 184 other member nations of the Washington-based lending institution.

IMF Managing Director Dominique Strauss-Kahn welcomed the board's decision to propose a new income and expenditure framework for the fund designed to close a projected $400 million budget deficit over the next four years.

It is "a landmark agreement that will put the institution on a solid financial footing and modernize the IMF's structure and operations," he said in a statement.

The budget proposal includes sharp spending cuts of $100 million over the next three years that will include up to 100 staff dismissals.

"We have made difficult but necessary choices to close the projected income shortfall and put the fund's finances on a sustainable basis, but in the end it will make the fund more focused, efficient and cost-effective in serving our members," said Strauss-Kahn, a former French finance minister.

The IMF said the board agreed to revamp the fund's income model from one that primarily relies on lending to one that generates money from various sources.

During the 1990s the IMF lent billions to countries in Asia and Latin America that were facing financial crises and financed its operations on interest from those loans. In recent years, IMF lending has dried up as many of those countries have built up reserves to prevent them from having to borrow again from the IMF, which often puts severe restrictions and conditions on its loans. The declining interest payments led to the IMF's budget gap.

Actual sale of the gold cannot start because the US member on the IMF board cannot vote for it until Congress approves. Congress has made approval conditional on a broad range of operational changes that Strauss-Khan has pledged to carry out to preserve the relevancy of the 64-year-old organization, whose mission is to promote global financial stability.

Under the plan, the IMF would sell the 403 tons, or nearly 13 million ounces, of gold for about $11 billion over several years. The IMF would keep $4.4 billion on its books, and the remaining $6.6 billion would go into an investment account.

The IMF, which has sold gold before, said it would coordinate the sales with central banks in an effort to prevent market disruptions.

"Gold sales would be conducted in a transparent manner with strong safeguards to ensure that they do not add to official sales and avoid any risk of market disruption," the IMF said in a statement.

The Bush administration said in February it could support selling a limited amount of IMF gold as away to ensure the agency's long-term financial stability, but US Treasury officials realized this would be a hard sell. In 1999 Congress rejected a previous proposal to sell IMF gold, and the current majority leader of the Senate, Democrat Harry Reid, comes from the gold-mining state of Nevada.

Strauss-Khan, who took over last November as head of the IMF, said the financial overhaul was another major step in the organization's reform process. It followed a decision last month to increase slightly the voting power of rapidly developing countries such as China, India and Brazil, who are playing a growing role in the world economy. Since its founding, the United States, the largest shareholder, and European nations have dominated IMF decision-making.

Besides using the gold sales to produce an income stream, the fund's narrow investment authority will be broadened.

September 24, 2008

The Buck Stopped Then
By JAMES GRANT

CRITICS of the administration’s Wall Street bailout condemn the waste of taxpayer dollars. But the taxpayers aren’t the weightiest American financial constituency, even in this election year. The dollar is the world’s currency. And it is on the world’s opinion of the dollar that the Treasury’s plan ultimately hangs.

It hangs by a thread, if Monday’s steep drop of the greenback against the euro is any indication. We Americans, constitutionally inattentive to developments in the foreign exchange markets, should be grateful for what we have. That a piece of paper of no intrinsic value should pass for good money the world over is nothing less than a secular miracle. We pay our bills with it. And our creditors not only accept it, they also obligingly invest it in American securities, including our slightly shop-soiled mortgage-backed securities. Every year but one since 1982, this country has consumed much more than it has produced, and it has managed to discharge its debts with the money that it alone can lawfully print.

No other nation ever had it quite so good. Before the dollar, the pound sterling was the pre-eminent monetary brand. But when Britannia ruled the waves, the pound was backed by gold. You could exchange pound notes for gold coin, and vice versa, at the fixed statutory rate.

Today’s dollar, in contrast, is faith-based. Since 1971, nothing has stood behind it except the world’s good opinion of the United States. And now, watching the largest American financial institutions quake, and the administration fly from one emergency stopgap to the next, the world is changing its mind.

“Not since the Great Depression,” news reports keep repeating, has America’s banking machinery been quite so jammed up. The comparison is hardly flattering to this generation of financiers. From 1929 to 1933, the American economy shrank by 46 percent. The wonder is that any bank, any corporate borrower, any mortgagor could have remained solvent, not that so many defaulted. There is not the faintest shadow of that kind of hardship today. Even on the question of whether the nation has entered a recession, the cyclical jury is still out. Yet Wall Street shudders.

The remote cause of its troubles is the paper dollar itself — the dollar and the growth in the immense piles of debt it has facilitated. The age of paper money brought with it an increasingly uninhibited style of doing business.

The dollar emerged at the center of the monetary system that took its name from the 1944 convention in Bretton Woods, N.H. The American currency alone was made exchangeable into gold. The other currencies, when they got their peacetime legs back under them, were made exchangeable into the dollar.

All was well for a time — indeed, for one of the most prosperous times in modern history. Under the system of fixed exchange rates and a gold-anchored dollar, world trade boomed (albeit from a low, war-ravaged base). Employment was strong and inflation dormant. The early 1960s were a kind of macroeconomic heaven on earth.

However, by the middle of that decade it had come to the attention of America’s creditors that this country, fighting the war in Vietnam, was emitting a worryingly high volume of dollars into the world’s payment channels. Foreign central banks, nervously eyeing the ratio of dollars outstanding to gold in the Treasury’s vaults, began prudently exchanging greenbacks for bullion at the posted rate of $35 per ounce. In 1965, William McChesney Martin, chairman of the Federal Reserve, sought to reassure the quavering dollar holders. He lectured the House Banking Committee on the importance of maintaining the dollar’s credibility “down to the last bar of gold, if that be necessary.”

Necessary, it might have been, but expedient, it was not, and the Nixon administration, on Aug. 15, 1971, decreed that the dollar would henceforth be convertible into nothing except small change. The age of the pure paper dollar was fairly launched.

In the absence of a golden anchor, the United States produced as many dollars as the world cared to absorb. And the world’s appetite was prodigious. “Balance of payments” crises were now, for this country, things of the past. “Liquidity,” that bubbly speculative elixir, gurgled from the founts of the world’s central banks.

It was the very lack of gold-standard inhibition that permitted the buildup of titanic dollar balances overseas. At the end of 2007, no less than $9.4 trillion in dollar-denominated securities were sitting in the vaults of foreign investors. Not a few of these trillions were the property of Asian central banks. So, although the United States has run heavy and persistent current account deficits — $6.7 trillion in total since 1982 — they have been “deficits without tears,” to quote the French economist Jacques Rueff. The dollars American debtors sent abroad America’s creditors sent right back in the shape of investments in American stocks, bonds and factories.

Under the Bretton Woods system, worried foreign creditors would long ago have cleaned out Fort Knox. But, conveniently, the dollar is uncollateralized and unconvertible. America’s overseas creditors hold it for many reasons. Some — notably Asian central banks — acquire dollars simply to help make their exports grow. But even the governments that scoop up dollars for no better reason than to manipulate their own currency’s value presumably put some store in the integrity of American finance.

As never before, that trust is being put to the test. In the best of times, the Treasury and the Federal Reserve pretended as if the dollar were America’s currency alone. Now, in some of the worst of times, Washington is treating its vital overseas dollar constituency as if it weren’t even there.

Which failing financial institution will the administration pluck from the flames of crisis? Which will it let roast? Which market, or investment technique, will the regulators bless? Which — in a capricious change of the rules — will it condemn or outlaw? Just how shall the Treasury secretary spend the $700 billion he’s begging for? Viewed from Wall Street, the administration’s recent actions appear erratic enough. Seen from the perch of a foreign investor, they must look very much like “political risk,” a phrase we Americans usually associate with so-called emerging markets, not with our own very developed one.

Where all this might end, nobody can say. But it is unlikely that either the dollar, or the post-Bretton Woods system of which it is the beating heart, will emerge whole. It behooves Barack Obama and John McCain to do a little monetary planning. In the absence of faith, what stands behind a faith-based currency?

James Grant, the editor of Grant’s Interest Rate Observer, is the author of the forthcoming “Mr. Market Miscalculates: The Bubble Years and Beyond.”