Category Archives: Financial

Yuan “De Facto” Backed By Gold…? by Bill Holter

I intended to write this yesterday but was still buried from response to last Thursday’s article. My wife teased me, she told me she had not seen me work like that since I retired from brokerage back in 2006. From Friday morning through yesterday I burned my cell battery down 5 times and was stuck several times plugged in and talking with a 3 ft. chord attached! I thank everyone for the huge response and reiterate this is a window that when closes will probably never open again.

This is a very important week. We had an IMF meeting over the weekend and an extremely bland “communique”. I am sure much more went on behind the scenes than this “don’t worry be happy” statement.

China has their 29th Communist Congress the 18th and 19th this week. For sure it will contain pomp and circumstance as they install new and old leaders but the highlight will be their “5 year plan” discussions. We may (most probably) not be privy to the true core to the plan and only offered public tidbits for view but we will see.

We can look back at the last five years and see China has readied herself to assume leadership for the world in many if not most areas previously lead by the US. They have set up credit facilities, a clearing system alternative to SWIFT, trade deals all over the world especially including the Middle East and other commodity rich areas. (And amassed a huge hoard of gold). They have also cozied up to Russia in many ways including militarily. We have also seen several instances where US Naval vessels may have been compromised technologically. In fact, I understand the Fitzgerald will have new electronics installed by Lockheed Martin. The main supporter of the U.S. dollar (the military) may have been tested publicly and only understood by those watching closely?

The point is this, China is “ready”. They can now at this point begin to “pull the trigger”. Whether it is one big trigger or many smaller triggers I do not know. (A betting man would wager many small triggers as the Chinese are a very polite society). I also do not know if one of the smaller triggers creates a domino effect but I suspect so. Do not mistake this, China does have huge leverage and imbedded fraud as does the West. The biggest difference as I have stressed for over two years is China actually created “stuff” whereas the West took their plundered spoils and “ate” them. In other words, China has built out their infrastructure and actually has premade “ghost cities” ready to roll. The U.S. is left with 50-100 year old infrastructure, little manufacturing left and highly unfunded liabilities in pensions. The American party is over…

As I have maintained, the Chinese have an “out” in the case of imminent financial global collapse. They can simply mark up their gold holdings and fill the balance sheet black holes with appreciated gold. The U.S. cannot do this as gold has been leaked out for years and may not even be an asset at this point. We have received many questions regarding the supposed “Chinese oil contract, settled in yuan and backed by gold”. We also received an extreme amount of questions regarding Koos Jansen’s article calling this a “myth” First, if you recall when I first wrote about this, I suggested China would NEVER convert yuan into THEIR gold. Rather, they would take presented yuan and buy on the open markets including COMEX and LBMA (and expose their lack of inventory?). In this manner, they would simply be taking cash flows from the oil trade and using it as a way to break the “paper pricing” forced on physical markets by dollar hegemony.

Yes I know, “people can currently take dollars and buy gold, they can even take yuan and buy gold” already, so what the heck am I talking about? To this point it has not been a very good “life decision” to either accept non dollars for oil, OR to take your dollars and purchase gold…(ask Saddam and Mohamar about this)! Looking at this just under the surface, ANYONE who used a couple hundred million dollars (or God forbid MORE) to purchase gold would be “seen”. Do you see where I am going? They have, are and ALWAYS WILL be seen and known if they use dollars because of something called the SWIFT system. Conversely, should oil producers use their “yuan” to buy gold, the U.S. cannot track these trades because China’s clearing system will clear the trade!

Do you see the beauty of this? Oil producers using yuan instead of dollars will no longer fear buying gold because it can be done under cover of China’s clearing system. (I guess it should be asked, would a logical trade move toward some’s liability or toward something with no one’s liability? Said another way, ending up with gold is true “settlement” as opposed to owning a liability yet to be settled). In addition, a freely trading and much “higher” gold in fiat terms is something the Chinese would desire as they have amassed maybe 20,000 tons or more. This, opposed to something the U.S. would not want, no longer being a major holder of gold. One might argue the previous sentences but good luck with that because common sense, a pencil and napkin will suffice!

So no, any new Chinese oil contract will not be backed directly by gold. This would be complete insanity for the Chinese and a recipe to undo the hoard of gold they have so meticulously and methodically accumulated over time. Rather, they are creating an avenue where Mother Nature can direct capital flows freely (by choice of the owner) and without fear of U.S. retribution. I guess you can call this “de facto” backing the oil trade for yuan…with gold – by repealing the fear of doing so by holders of said yuan! This is cunning action by the Chinese and aligned in harmony with Mother Nature in my opinion. We will soon see…

This article will be held for subscribers for 24 hours and then released publicly.

Standing watch,

Bill Holter

Holter-Sinclair collaboration

Comments welcome bholter@hotmail.com

Declining Economic Conditions Will Likely Make Society Turn In On Itself Even More Causing Suffering And Loss Of Life

It has been said that history may not repeat but it sometimes rhymes. Just as the generals always seen to fight the last war people seem to prepare for the last depression. Times change and the mechanism that leads to misfortune changes with it. Looking at the past may not give us the clear answer to how to deal with the future but it can help us to determine what might happen and how to deal with it when the time comes.

We always look at the last incident because that is what we know. The problem is that social and economic conditions are always changing and they have a major impact on how things unfold. When people hear that they should prepare for another great depression they immediately think about how people survived the last one and how events unfolded. That is a good starting point but things will not be exactly the same the next time.

In the 1930’s people did not posses specialized skills, they had general knowledge that allowed them to take any job that was available. Today people are skilled in one area and loss of employment in that area requires them to obtain skills to work in a new area. The jack of all trades has been replaced by the specialist so when job loss comes they have a more difficult time finding a new one.

In the 1930’s we had a deflationary depression and anyone holding cash and bonds were able to hold on to their wealth and banks were allowed to fail. The farmers suffered from a drop in commodity prices but taxes were low and most people that had land owned it free and clear allowing them to stay in place. Today we are more likely to have an inflationary depression due to the mandate to save the banks at all costs. Anyone trying to save their wealth in cash and bonds will get slaughtered in the paper assets they hold due to massive money printing.

In the 1930’s most people lived in rural areas and people worked to help their neighbors in difficult times. Most people had the skills to take care of themselves and their families until things got better. Today most people live in urban and suburban areas and society has been fragmented into militant groups that cannot work together even in good times. Declining economic conditions will likely make society turn in on itself even more causing suffering and loss of life. Most people have no idea how to care for themselves if the system breaks down.

 

In the 1930’s people were forced to find new employment due to job loss because there were no social safety nets to provide for them. In difficult times they were forced to look to family, friends and the church for help but most people felt they had failed if they asked for help. Today people losing a job have unemployment, welfare, food stamps and dozens of other services to provide for them if they have no job. Many have come to rely on these services and expect the government to provide for them as long as necessary. If these services ever end it will trigger a violent response by certain segments of society.

In the 1930’s a man out of work could sell apples on the street corner for a nickel to make money to support himself. In a future depression environment anyone attempting to make some money may be selling apples for five dollars each and will likely be arrested for vending without a license. Another difference today is that most people do not want to get their hands dirty so they will opt for government assistance rather than hard work.

When people lost jobs in the 1930’s they could look for many different types of jobs they could do and they were able to negotiate pay with business owners to get the job. The large number of unemployed allowed businesses to negotiate lower wages that allowed them to stay in business. Today minimum wage laws prevent business owners from cutting wages to stay in business which will cause business closures in difficult times. The closing of businesses is a self reinforcing loop that puts more and more people out of work as time goes on.

In the 1930’s the monetary system not only survived but cash was worth even more. The next depression will likely see the monetary system collapse and cash become worthless. This will likely lead to the creation of local currencies and barter among individuals. The attempt by bankers and governments to create new fiat currencies will likely be rejected to a large degree.

In the 1930’s most properties were owned by people that utilized the land themselves. The investor mentality of today will see the mortgage market collapse and the investors buying properties to flip lose it all. Some experts expect to see a 75% to 90% drop in land prices in the coming years.

Many of the things that allowed people to get through the last great depression will not save them this time. Social and economic conditions have changed and different methods will be required to get through the depression we are now entering. Where once cash and bonds were a safe haven gold and silver will, be now. The ability to negotiate wages is gone and wage laws will insure massive closings of businesses forcing people to become self employed to avoid the wage laws. Overall the standard of living will drop dramatically and most people today will not be prepared to accept it.

There are some things that are likely to be the same as before. Those who need help will once again need to turn to family and friends for help. Those that own land free and clear will be able to keep a roof over their head. Those that can supply their own needs will make out better than those dependant on others. Those with multiple job skills will make out better than those with no job skills. Those that can produce a product to sell will make out better than those in the service industry.

In order to learn from the past you must look at current trends and extrapolate where we are headed from here. It is not an exact science but those that pay attention to details will likely fare better than those that go blindly along their daily lives expecting things to always be the same.

GEORGE SOROS SHORTED MGM SHARES, MGM CEO SOLD 80% OF HIS MGM SHARES WEEKS BEFORE VEGAS MASSACRE

On Tuesday, September 5th, 2017,  the board of MGM Resorts International decided to approve a $1 billion share repurchase program. At a net worth of $17.7 billion today, the program represented a significant portion of its current market cap. By the end of the week, MGM’s CEO, James Murren, had coolly divested himself of 80% of the shares he owned in his company. The divestment came just days before the ex-dividend date on September 8th, 2017.

The sales were originally disclosed in a document filed with the Securities and Exchange Commission (SEC). Murren had previously divested 57,269 shares on July 31st and August 9th, 2017.

 

It’s currently unclear why Murren chose to sell when he did. To date, MGM’s stock has not experienced a significant decline in value due to the repurchasing program. As the CEO of MGM, it runs against the company’s interests to convey a sense of urgency in the selling personal stock of shares immediately after the announcement of my company’s share repurchase program. It’s also strange that the CEO of a company would sell more than half of their stake (let alone 80%) in the company that they represented.

Mr. Murren and his fellow board members were not the only speculators who were bearish on MGM’s prospects. Billionaire investor George Soros also bought $42 million worth of puts on the company, according to SEC filings from mid August.

That point being made, it needs to be asked why any profit-oriented CEO of any company would sell 80% of his personal stake in his own corporation, especially after he thought it was in the business’ best interest to initiate a massive share repurchase program which one would theoretically assume to reduce the number of shares in the company and increase the price of each share, ceteris peribus.

Why would the individual with the most information about the company sell 80% of his shares immediately after the commencement of a program that most would consider positive for the stock? Shouldn’t he want to hold on to his shares? Is there something he knew, that others didn’t, that lead to so much movement in such little time? What a week!

China’s Mortgage Debt Bubble Raises Spectre Of 2007 US Crisis

In an inglorious echo of 2007 America, many young homeowners in booming cities owe more than they earn, and some even falsify salary details to get bigger mortgages…

Young Chinese like Eli Mai, a sales manager in Guangzhou, and Wendy Wang, an executive in Shenzhen, are borrowing as much money as possible to buy boomtown flats even though they cannot afford the repayments.

Behind the dream of property ownership they share with many like-minded friends lies an uninterrupted housing price rally in major Chinese cities that dates back to former premier Zhu Rongji’s privatisation of urban housing in the late 1990s.

Rapid urbanisation, combined with unprecedented monetary easing in the past decade, has resulted in runaway property inflation in cities like Shenzhen, where home prices in many projects have doubled or even tripled in the past two years.

City residents in their 20s and 30s view property as a one-way bet because they’ve never known prices to drop. At the same time, property inflation has seen the real purchasing power of their money rapidly diminish.

“Almost all my friends born since the 1980s and 1990s are racing to buy homes, while those who already have one are planning to buy a second,” Mai, 33, said.

“Very few can be at ease when seeing rents and home prices rise so strongly, and they will continue to rise in a scary way.”

The rush of millions young middle-class Chinese like Mai into the property market has created a hysteria that eerily resembles the housing crisis that struck the United States a decade ago. Thanks to the easy credit that has spurred the housing boom, many young Chinese have abandoned the frugal traditions of earlier generations and now lead a lifestyle beyond their financial means.

The build-up of household and other debt in China has also sparked widespread concern about the health of the world’s second largest economy.

The Chinese leadership headed by President Xi Jinping has taken a note of the problem and launched an unprecedented campaign in the second half of last year to curb home price rises in major cities by raising down payment requirements, disqualifying some buyers and squeezing the bank credit available for home buyers. The campaign is still deepening, with five more cities introducing rules last weekend that will freeze some property deals.

Meanwhile, China’s financial regulators have launched an investigation of “consumer loans” in big cities because a torrent of consumer credit flowed into the property market after the government imposed restrictions on mortgage loans.

Government policies are also protecting the interests of homeowners. City governments have squeezed land supply to keep land prices high and made secondary market trading less attractive, with new home buyers left to compete for a few new developments. Meanwhile, there is no property tax, which encourages homeowners to hold on to appreciating property assets.

The result has been skyrocketing housing prices in Shenzhen, Beijing and Shanghai, where property prices can match those in Hong Kong or London.

The lesson was that “if you don’t buy a flat today, you will never be able to afford it”, Wang, 29, said.

Property ownership was now increasingly what separated the rich and the poor, the haves and have-nots, and the privileged and the underdogs, she said.

And that means young people like Mai and Wang are scrambling for credit to buy property.

In May last year, after the value of his first flat, a 70 square metre unit in Guangzhou’s Panyu subdistrict, soared from 900,000 yuan (US$136,500) to 1.2 million yuan in just a few months, Mai, who has a monthly salary of 15,000 yuan, decided to raise the down payment for a new property to cash in on the booming housing market.

In June, he emptied his and his parents’ 300,000 yuan in savings and incurred debts to friends to muster the 50 per cent down payment for a 2.4 million yuan flat.

To meet the mortgage repayments of about 12,000 yuan a month on the two flats, and other debts to friends, he used the first flat as collateral for a loan about 800,000 yuan and got 200,000 yuan in cash from a short-term consumer loans supposedly for a car.

Mai got the money easily from local banks and financial institutions. Now, he needs to pay about 25,000 yuan a month for loans totalling around 3 million yuan, including around 4,000 yuan in mortgage payments for his first flat, about 7,300 yuan in mortgage payments for his second flat, nearly 9,000 yuan on the secondary mortgage for his first flat, 3,800 yuan for car loans, and the rest to service debts to family members and friends.

In Wang’s case, she borrowed 500,000 yuan from her parents, relatives and friends and sourced another 300,000 yuan from credit cards and consumer loans to pull together 800,000 yuan late last year for the minimum down payment on a small flat.

She also borrowed 1.8 million yuan from a bank, with monthly mortgage payments of about 9,600 yuan – 80 per cent of her monthly income – for 30 years. To help cover the mortgage, her mother, a retiree who lives 4,000km away in a city in northeastern China, remits the bulk of her pension to Wang.

“The debts are huge to me,” Wang said. “But a person without a flat has no future in Shenzhen.”

In China’s world of debt, household debt is supposed to be much safer than corporate or local government debt. Outstanding household loans were the equivalent of 44.4 per cent of China’s gross domestic output last year, more than double the ratio in 2008 but much lower than in most advanced economies. The ratio is 87 per cent in Britain, 79 per cent in the United States and 62 per cent in Japan.

 

But the figure could be misleading because it failed to reflect regional differences and it under-reported many hidden family debts in China, a recent report by the Institute for Advanced Research at Shanghai University of Finance and Economics said.

Because Chinese household incomes were growing more slowly than property prices, families were facing serious liquidity problems, with increasing amounts of income and savings sucked into the property market, Chen Yuanyuan, a co-author of the report, told the South China Morning Post.

Real household debt would have been the equivalent of at least 60 per cent of China’s GDP at the end of last year, Chen said, warning that the rapid rise in household debt was undermining China’s economic growth prospects.

“If it goes on, as early as in 2020, the ratio of mortgage debt and disposable income in China will reach the same peak level [127 per cent] as the US [in 2007] on the eve of the subprime crisis,” Chen said.

The boom in China’s housing market since 2015 was the result of soaring household debt leverage, Jiang Chao, an analyst at Haitong Securities in Shanghai, said in a research note last month.

China’s household debt to household disposable income ratio had soared to 90 per cent from less than 35 per cent in 2007, he said. Meanwhile, its household savings to household disposable income ratio had dropped from more than 30 per cent in the early 2000s to about 15 per cent last year.

The latest data from the People’s Bank of China, the country’s central bank, shows that at the end of May, domestic household savings deposits totalled around 63 trillion yuan while the amount of outstanding personal loans had soared to 36.4 trillion yuan, up from 8.8 trillion yuan in 2010.

The Chinese tradition of saving money for a rainy day has been uprooted, and it’s not just that the younger generation, like Wang and Mai, are trying to spend before they earn. Their property buying frenzy has also been endorsed by their parents.

“My mum is happy about my decision,” Wang said.

Shenzhen is one of the most indebted cities in China. Data from Lianjia, the country’s biggest property agent, shows that Shenzhen property buyers took on a record amount of debt last year, with mortgage loans a feature of more than 93 per cent of purchases.

Property buyers in the city spent an average of about 3.7 million yuan on their flat in the first half of last year, with mortgage loans averaging 2.38 million yuan, Lianjia said, resulting in an average loan-to-value ratio of just over 64 per cent. In Hong Kong, banks’ average loan-to-value ratio for new mortgages was 51 per cent in December, according to Standard & Poor’s, while in the US last year it was 55.5 per cent, according to Statista, a leading Web-based data and statistics provider.

China’s first home buyers are, on average, younger than those elsewhere in the world, with most of those in Shenzhen in their 20s and 30s. On average, they need to pay about 10,600 yuan a month for 30 years for their first flat – or 13,000 yuan for 20 years – based on the current mortgage interest rate of 4.9 per cent. Meanwhile, the average white-collar salary in Shenzhen was 8,315 yuan last year and 8,892 yuan in the first quarter of this year, according to Zhaopin.com, a leading Chinese jobs website.

“Chinese banks typically allow homebuyers to use up to half of their monthly incomes to repay mortgages,” said Julia Fan, a former state bank manager.

“But the market in cities like Shenzhen and Shanghai is full of buyers whose out-of-pocket property spending is much more than their actual monthly salaries.”

Bill Duan, a manager at a Chinese investment bank, said it was not unknown for Chinese buyers to exaggerate their salaries or use fake payslips when taking out mortgages and loans, “and this may be when the problem starts”.

“It’s known among industry insiders that local branches of the banks in many cities do not always double-check salary details with employers, even though the applicants offered salary certificates for several times the city’s average wages,” he said.

Mai and Wang have been playing it fast and loose to deal with their debts.

Mai has lent 600,000 of the 800,000 yuan he got from a bank after using his first flat as collateral to a money shark promising an annualised return of 20 per cent. Wang gave the bank fake documents showing her monthly income was 18,000 yuan – about 1.6 times her actual salary. It did not ask any questions.

Neither see any problem, because the value of their underlying assets, the flats, have risen.

The value of Mai’s two flats rose from 3.8 million yuan last year to 6.4 million yuan last month, while the value of Wang’s unit is now 2.93 million yuan, up from 2.6 million yuan.

There Are 2.7 Trillion Reasons Why Tesla Won’t Rule The World

News of mass “performance-based departures” at Tesla, reported yesterday by the San Jose Mercury News has underscored the fact that Elon Musk and company have burned through a ridiculous amount of cash in the past two quarters alone, raising questions about why the company would choose to cut nearly 10% of its workforce when the assembly line for the company’s new Model 3 sedan has reportedly not yet been completed, and production remains woefully behind schedule as employees at the company’s Freemont factory have been forced to piece together the cars by hand.

And with Elon Musk reeling from a series of embarrassing revelations, Bloomberg is here to remind us of one of the many reasons why Tesla will never become a global automotive behemoth.

So far, the US government’s generous tax incentives for buyers of electric vehicles have helped bolster Tesla’s sales – a strategy that has been employed across Europe – and have sustained the market’s misguided conviction that Tesla will one day become a profitable enterprise.

But unfortunately, those incentives aren’t nearly enough to create the infrastructure to support Morgan Stanley’s forecast of 526 million electric vehicles operating globally by 2040. Building the charging stations and other infrastructure necessary would cost an astonishing $2.7 trillion, much of which would probably need to be allocated by governments.

Morgan Stanley says the problem requires a mix of private and public funding across regions and sectors. The investment bank’s strategists added that any auto company or government with aggressive targets would be unfeasible unless the infrastructure is in place.

As we’ve noted time and time again, the electric-vehicle industry is essentially being support by generous – and borderline anti-competitive – government subsidies. In China, which has aggressively pushed EVs as a potential remedy for its pollution problem, communist party officials have hit on an effective strategy for forcing consumers to favor electric vehicles. In Shanghai, where tens of thousands of people enter monthly lotteries for just a handful of license plates, consumers who buy electric cars are given license plates with little resistance.

Morgan Stanley expects China to become the largest EV market in the world by 2040, accounting for about a third of global infrastructure spending, Bloomberg reports.

But with Trump in office, it’s unlikely the US will prove so amendable to subsidizing Elon Musk’s ambitions for much longer.

Profits über Alles! American Corporations and Hitler

his article was first published by Global Research more than 13 years ago on 8 June 2004.

While America is at war in Ukraine, supportive of a Neo-Nazi proxy regime, this incisive and carefully researched article by Dr. Jacques Pauwels provides us with a historical understanding of the relationship between American corporations and Nazi Germany.

The support of Neo-Nazis in Ukraine is part of a longstanding relationship.  M. Ch, GR Editor, October 2017

https://www.globalresearch.ca/wp-content/uploads/2016/03/3391529-4874273.jpg

***

In the United States, World War II is generally known as “the good war.”

In contrast to some of America’s admittedly bad wars, such as the near-genocidal Indian Wars and the vicious conflict in Vietnam, World War II is widely celebrated as a “crusade” in which the US fought unreservedly on the side of democracy, freedom, and justice against dictatorship.

No wonder President George W. Bush likes to compare his ongoing “war against terrorism” with World War II, suggesting that America is once again involved on the right side in an apocalyptic conflict between good and evil. Wars, however, are never quite as black-and-white as Mr. Bush would have us believe, and this also applies to World War II. America certainly deserves credit for its important contribution to the hard-fought victory that was ultimately achieved by the Allies. But the role of corporate America in the war is hardly synthesized by President Roosevelt’s claim that the US was the “arsenal of democracy.” When Americans landed in Normandy in June 1944 and captured their first German trucks, they discovered that these vehicles were powered by engines produced by American firms such as Ford and General Motors. 1 Corporate America, it turned out, had also been serving as the arsenal of Nazism.

Fans of the Führer

Mussolini enjoyed a great deal of admiration in corporate America from the moment he came to power in a coup that was hailed stateside as “a fine young revolution.” 2 Hitler, on the other hand, sent mixed signals. Like their German counterparts, American businessmen long worried about the intentions and the methods of this plebeian upstart, whose ideology was called National Socialism, whose party identified itself as a workers’ party, and who spoke ominously of bringing about revolutionary change. 3 Some high-profile leaders of corporate America, however, such as Henry Ford liked and admired the Führer at an early stage. 4

Other precocious Hitler-admirers were press lord Randolph Hearst and Irénée Du Pont, head of the Du Pont trust, who according to Charles Higham, had already “keenly followed the career of the future Führer in the 1920s” and supported him financially. 5

Eventually, most American captains of industry learned to love the Führer. It is often hinted that fascination with Hitler was a matter of personalities, a matter of psychology. Authoritarian personalities supposedly could not help but like and admire a man who preached the virtues of the “leadership principle” and practised what he preached first in his party and then in Germany as a whole.

Although he cites other factors as well, it is essentially in such terms that Edwin Black, author of the otherwise excellent book IBM and the Holocaust, explains the case of IBM chairman Thomas J. Watson, who met Hitler on a number of occasions in the 1930s and became fascinated with Germany’s authoritarian new ruler. But it is in the realm of political economy, not psychology, that one can most profitably understand why corporate America embraced Hitler.

In the 1920s many big American corporations enjoyed sizeable investments in Germany. IBM established a German subsidiary, Dehomag, before World War I; in the 1920s General Motors took over Germany’s largest car manufacturer, Adam Opel AG; and Ford founded a branch plant, later known as the Ford-Werke, in Cologne. Other US firms contracted strategic partnerships with German companies. Standard Oil of New Jersey — today’s Exxon — developed intimate links with the German trust IG Farben. By the early 1930s, an élite of about twenty of the largest American corporations had a German connection including Du Pont, Union Carbide, Westinghouse, General Electric, Gilette, Goodrich, Singer, Eastman Kodak, Coca-Cola, IBM, and ITT. Finally, many American law firms, investment companies, and banks were deeply involved in America’s investment offensive in Germany, among them the renowned Wall Street law firm Sullivan & Cromwell, and the banks J. P. Morgan and Dillon, Read and Company, as well as the Union Bank of New York, owned by Brown Brothers & Harriman.

The Union Bank was intimately linked with the financial and industrial empire of German steel magnate Thyssen, whose financial support enabled Hitler to come to power. This bank was managed by Prescott Bush, grandfather of George W. Bush. Prescott Bush was allegedly also an eager supporter of Hitler, funnelled money to him via Thyssen, and in return made considerable profits by doing business with Nazi Germany; with the profits he launched his son, the later president, in the oil business. 6 American overseas ventures fared poorly in the early 1930s, as the Great Depression hit Germany particularly hard. Production and profits dropped precipitously, the political situation was extremely unstable, there were constant strikes and street battles between Nazis and Communists, and many feared that the country was ripe for a “red” revolution like the one that had brought the Bolsheviks to power in Russia in 1917.

However, backed by the power and money of German industrialists and bankers such as Thyssen, Krupp, and Schacht, Hitler came to power in January 1933, and not only the political but also the socio-economic situation changed drastically.

Soon the German subsidiaries of American corporations were profitable again. Why? After Hitler came to power American business leaders with assets in Germany found to their immense satisfaction that his so-called revolution respected the socio-economic status quo.

The Führer’s Teutonic brand of fascism, like every other variety of fascism, was reactionary in nature, and extremely useful for capitalists’ purposes. Brought to power by Germany’s leading businessmen and bankers, Hitler served the interests of his “enablers.” His first major initiative was to dissolve the labour unions and to throw the Communists, and many militant Socialists, into prisons and the first concentration camps, which were specifically set up to accommodate the overabundance of left-wing political prisoners.

This ruthless measure not only removed the threat of revolutionary change — embodied by Germany’s Communists — but also emasculated the German working class and transformed it into a powerless “mass of followers” (Gefolgschaft), to use Nazi terminology, which was unconditionally put at the disposal of their employers, the Thyssens and Krupps. Most, if not all firms in Germany, including American branch plants, eagerly took advantage of this situation and cut labour costs drastically. The Ford-Werke, for example, reduced labour costs from fifteen per cent of business volume in 1933 to only eleven per cent in 1938. (Research Findings, 135–6)

Coca-Cola’s bottling plant in Essen increased its profitability considerably because, in Hitler’s state, workers “were little more than serfs forbidden not only to strike, but to change jobs,” driven “to work harder [and] faster” while their wages “were deliberately set quite low.” 7

In Nazi Germany, real wages indeed declined rapidly, while profits increased correspondingly, but there were no labour problems worth mentioning, for any attempt to organize a strike immediately triggered an armed response by the Gestapo, resulting in arrests and dismissals. This was the case in GM’s Opel factory in Rüsselsheim in June 1936. (Billstein et al., 25) As the Thuringian teacher and anti-fascist resistance member Otto Jenssen wrote after the war, Germany’s corporate leaders were happy “that fear for the concentration camp made the German workers as meek as lapdogs.” 8 The owners and managers of American corporations with investments in Germany were no less enchanted, and if they openly expressed their admiration or Hitler — as did the chairman of General Motors, William Knudsen, and ITT-boss Sosthenes Behn — it was undoubtedly because he had resolved Germany’s social problems in a manner that benefited their interests. 9

Depression? What Depression?

Hitler endeared himself to corporate America for another very important reason: he conjured up a solution to the huge problem of the Great Depression. His remedy proved to be a sort of Keynesian stratagem, whereby state orders stimulated demand, got production going again, and made it possible for firms in Germany — including foreign-owned firms — to increase production levels dramatically and to achieve an unprecedented level of profitability.

What the Nazi state ordered from German industry, however, was war equipment, and it was soon clear that Hitler’s rearmament policy would lead inexorably to war, because only the spoils resulting from a victorious war would enable the regime to pay the huge bills presented by the suppliers.

The Nazi rearmament program revealed itself as a wonderful window of opportunity for the subsidiaries of US corporations. Ford claims that its Ford-Werke was discriminated against by the Nazi regime because of its foreign ownership, but acknowledges that in the second half of the 1930s its Cologne subsidiary was “formally certified [by the Nazi authorities] … as being of German origin” and therefore “eligible to receive government contracts.” (Research Findings, 21) Ford took advantage of this opportunity, though the government orders were almost exclusively for military equipment. Ford’s German branch plant had posted heavy losses in the early 1930s, however, with lucrative government contracts thanks to Hitler’s rearmament drive, the Ford-Werke’s annual profits rose spectacularly from 63,000 Reichsmarks in 1935 to 1,287,800 RM in 1939.

GM’s Opel factory in Rüsselsheim near Mainz fared even better. Its share of the German automobile market grew from 35 per cent in 1933 to more than 50 per cent in 1935, and the GM subsidiary, which had lost money in the early 1930s, became extremely profitable thanks to the economic boom caused by Hitler’s rearmament program. Earnings of 35 million RM — almost 14 million dollars (US) — were recorded in 1938. (Research Findings, 135–6; and Billstein et al., 24) 10 In 1939, on the eve of the war, the chairman of GM, Alfred P. Sloan, publicly justified doing business in Hitler’s Germany by pointing to the highly profitable nature of GM’s operations under the Third Reich. 11

Yet another American corporation that enjoyed a bonanza in Hitler’s Third Reich was IBM. Its German subsidiary, Dehomag, provided the Nazis with the punch-card machine — forerunner of the computer — required to automate production in the country, and in doing so IBM-Germany made plenty of money. In 1933, the year Hitler came to power, Dehomag made a profit of one million dollars, and during the early Hitler years the German branch plant paid IBM in the US some 4.5 million dollars in dividends. By 1938, still in full Depression, “annual earnings were about 2.3 million RM, a 16 per cent return on net assets,” writes Edwin Black. In 1939 Dehomag’s profits increased spectacularly again to about four million RM. (Black, 76–7, 86–7, 98, 119, 120–1, 164, 198, and 222)

American firms with branch plants in Germany were not the only ones to earn windfalls from Hitler’s rearmament drive. Germany was stockpiling oil in preparation for war, and much of this oil was supplied by American corporations. Texaco profited greatly from sales to Nazi Germany, and not surprisingly its chairman, Torkild Rieber, became yet another powerful American entrepreneur who admired Hitler. A member of the German secret service reported that he was “absolutely pro-German” and “a sincere admirer of the Führer.” Rieber also became a personal friend of Göring, Hitler’s economic czar. 12

As for Ford, that corporation not only produced for the Nazis in Germany itself, but also exported partially assembled trucks directly from the US to Germany. These vehicles were assembled in the Ford-Werke in Cologne and were ready just in time to be used in the spring of 1939, in Hitler’s occupation of the part of Czechoslovakia that had not been ceded to him in the infamous Munich Agreement of the previous year. In addition, in the late 1930s, Ford shipped strategic raw materials to Germany, sometimes via subsidiaries in third countries; in early 1937 alone, these shipments included almost 2 million pounds of rubber and 130,000 pounds of copper. (Research Findings, 24, and 28)

American corporations made a lot of money in Hitler’s Germany; this, and not the Führer’s alleged charisma, is the reason why the owners and managers of these corporations adored him. Conversely, Hitler and his cronies were most pleased with the performance of American capital in the Nazi state. Indeed, the American subsidiaries’ production of war equipment met and even surpassed the expectations of the Nazi leadership.

Berlin promptly paid the bills and Hitler personally showed his appreciation by awarding prestigious decorations to the likes of Henry Ford, IBM’s Thomas Watson, and GM’s export director, James D. Mooney. The stock of American investments in Germany increased considerably after Hitler came to power in 1933. The major reason for this was that the Nazi regime did not allow profits made by foreign firms to be repatriated, at least not in theory. In reality, corporate headquarters could circumvent this embargo by means of stratagems such as billing the German subsidiary for “royalties” and all sorts of “fees.” Still, the restriction meant that profits were largely reinvested within the land of opportunity that Germany revealed itself to be at the time, for example in the modernization of existing facilities, in the construction or acquisition of new factories, and in the purchase of Reich bonds and real estate. IBM thus reinvested its considerable earnings in a new factory in Berlin-Lichterfelde, in an expansion of its facilities at Sindelfingen near Stuttgart, in numerous branch offices throughout the Reich, and in the purchase of rental properties in Berlin and other real estate and tangible assets. (Black, 60, 99, 116, and 122–3)

Under these circumstances, the value of IBM’s German venture increased considerably, by late 1938 the net worth of Dehomag had doubled from 7.7 million RM in 1934 to over 14 million RM. (Black, 76–7, 86–7, 98, 119–21, 164, 198, and 222) The value of the total assets of the Ford-Werke likewise mushroomed in the 1930s, from 25.8 million RM in 1933 to 60.4 million RM in 1939. (Research Findings, 133) American investment in Germany thus continued to expand under Hitler, and amounted to about 475 million dollars by the time of Pearl Harbor. (Research Findings, 6) 13

Better Hitler than “Rosenfeld”

Throughout the “dirty thirties,” corporate profits in the US remained depressed, at home firms like GM and Ford could only dream of the kind of riches their branch plants in Germany were accumulating thanks to Hitler. In addition, at home corporate America experienced problems with labour activists, Communists, and other radicals. What about the vicious trademarks of the Führer’s personality and regime?

Did they not disturb the leaders of corporate America? Apparently not much, if at all. The racial hatred propagated by Hitler, for example, did not overly offend their sensibilities. After all, racism against non-Whites remained systemic throughout the US and anti-Semitism was rife in the corporate class. In the exclusive clubs and fine hotels patronized by the captains of industry, Jews were rarely admitted; and some leaders of corporate America were outspoken anti-Semites. 14

In the early 1920s, Henry Ford cranked out a vehemently anti-Semitic book, The International Jew, which was translated into many languages; Hitler read the German version and acknowledged later that it provided him with inspiration and encouragement. Another notoriously anti-Semitic American tycoon was Irénée Du Pont, even though the Du Pont family had Jewish antecedents. 15 Corporate America’s anti-Semitism strongly resembled that of Hitler, whose view of Judaism was intimately interwoven with his view of Marxism, as Arno J. Mayer has convincingly argued in his book Why Did the Heavens not Darken? 16

Hitler claimed to be a socialist, but his was supposed to be a “national” socialism, a socialism for racially pure Germans only. As for genuine socialism, which preached international working-class solidarity and found its inspiration in the work of Karl Marx, it was despised by Hitler as a Jewish ideology that purported to enslave or even destroy Germans and other “Aryans.” Hitler loathed as “Jewish” all forms of Marxism, but none more so than communism (or “Bolshevism”) and he denounced the Soviet Union as the homeland of “Jewish” international socialism.

In the 1930s, the anti-Semitism of corporate America likewise revealed itself to be the other side of the coin of anti-socialism, anti-Marxism, and red-baiting. Most American businessmen denounced Roosevelt’s New Deal as a “socialistic” meddling in the economy. The anti-Semites of corporate America considered Roosevelt to be a crypto-Communist and an agent of Jewish interests, if not a Jew himself; he was routinely referred to as “Rosenfeld,” and his New Deal was vilified as the “Jew Deal.” 17

In  his book The Flivver King, Upton Sinclair described the notoriously anti-Semitic Henry Ford dreaming of an American fascist movement that “pledged to put down the Reds and preserve the property interests of the country; to oust the Bolshevik [Roosevelt] from the White House and all his pink professors from the government services … [and] to make it a shooting offense to talk communism or to call a strike.” 18 Other American tycoons also yearned for a fascist saviour who might rid America of its “reds” and thus restore prosperity and profitability. Du Pont provided generous financial support to America’s own fascist organizations, such as the infamous “Black Legion,” and was even involved in plans for a fascist coup d’état in Washington. (Hofer and Reginbogin, 585–6) 19

Why Worry about the Coming War?

It was quite obvious that Hitler, who was rearming Germany to the teeth, was going to unleash a major war sooner or later. Whatever misgivings America’s captains of industry may initially have had in this respect soon dissipated, because the cognoscenti of international diplomacy and business in the 1930s widely expected that Hitler would spare western countries, instead attacking and destroying the Soviet Union as promised in Mein Kampf. To encourage and assist him in the task that he considered his great mission in life, 20 was the hidden objective of the infamous appeasement policy pursued by London and Paris, and tacitly approved by Washington. 21

Corporate leaders in all western countries, including most emphatically the US, loathed the Soviet Union because that state was the cradle of the communist “counter system” to the international capitalist order of things, and a source of inspiration to America’s own “reds.” Furthermore, they found particularly offensive that the homeland of communism did not fall prey to the Great Depression, but experienced an industrial revolution that has been favourably compared by American historian, John H. Backer with the widely celebrated “economic miracle” of West Germany after World War II. 22

The appeasement policy was a devious scheme, whose real objective had to be concealed from the British and French publics. It backfired spectacularly because its contortions eventually made Hitler suspicious about the real intentions of London and Paris, which caused him to make a deal with Stalin, and thus led to Germany’s war against France and Great Britain rather than the Soviet Union.

Nevertheless, the dream of a German crusade against the communist Soviet Union on behalf of the capitalist West refused to die. London and Paris merely launched a “Phoney War” against Germany, hoping that Hitler would eventually turn against the Soviet Union after all. This was also the idea behind quasi-official missions to London and Berlin, undertaken by GM’s James D. Mooney, who tried very hard — as did the US ambassador in London, Joseph Kennedy, father of John F. Kennedy — to persuade German and British leaders to resolve their inconvenient conflict, so that Hitler could devote his undivided attention to his great eastern project. In a meeting with Hitler in March 1940, Mooney made a plea for peace in western Europe, suggesting “that Americans had understanding for Germany’s standpoint with respect to the question of living space” — in other words, that they had nothing against his territorial claims in the East. (Billstein et al., 37–44) 23

These American initiatives, however, did not produce the hoped-for results. The owners and managers of American corporations with subsidiaries in Germany undoubtedly regretted that the war Hitler had unleashed in 1939 was a war against the West, but in the final analysis it did not matter all that much. What did matter was this: helping Hitler to prepare for war had been good business and the war itself opened up even more extravagant prospects for doing business and making profits.

Putting the Blitz in the Blitzkrieg

Germany’s military successes of 1939 and 1940 were based on a new and extremely mobile form of warfare, the Blitzkrieg, consisting of extremely swift and highly synchronized attacks by air and land.

To wage “lightning war,” Hitler needed engines, tanks, trucks, planes, motor oil, gasoline, rubber, and sophisticated communication systems to insure that the Stukas struck in tandem with the Panzers. Much of that equipment was supplied by American firms, mainly German subsidiaries of big American corporations, but some was exported from the US, albeit usually via third countries. Without this kind of American support, the Führer could only have dreamed of “lightning wars,” followed by “lightning victories,” in 1939 and 1940.

Many of Hitler’s wheels and wings were produced in the German subsidiaries of GM and Ford. By the end of the 1930s these enterprises had phased out civilian production to focus exclusively on the development of military hardware for the German army and air force.

This switch, requested — if not ordered — by the Nazi authorities, had not only been approved, but even actively encouraged by the corporate headquarters in the US. The Ford-Werke in Cologne proceeded to build not only countless trucks and personnel carriers, but also engines and spare parts for the Wehrmacht. GM’s new Opel factory in Brandenburg cranked out “Blitz” trucks for the Wehrmacht, while the main factory in Rüsselsheim produced primarily for the Luftwaffe, assembling planes such as the JU-88, the workhorse of Germany’s fleet of bombers. At one point, GM and Ford together reportedly accounted for no less than half of Germany’s entire production of tanks. (Billstein et al., 25,) 24

Meanwhile ITT had acquired a quarter of the shares of airplane manufacturer Focke-Wulf, and so helped to construct fighter planes. 25 Perhaps the Germans could have assembled vehicles and airplanes without American assistance. But Germany desperately lacked strategic raw materials, such as rubber and oil, which were needed to fight a war predicated on mobility and speed. American corporations came to the rescue.

As mentioned earlier, Texaco helped the Nazis stockpile fuel. In addition, as the war in Europe got underway, large quantities of diesel fuel, lubricating oil, and other petroleum products were shipped to Germany not only by Texaco but also by Standard Oil, mostly via Spanish ports. (The German Navy, incidentally, was provided with fuel by the Texas oilman William Rhodes Davis.) 26 In the 1930s Standard Oil had helped IG Farben develop synthetic fuel as an alternative to regular oil, of which Germany had to import every single drop. (Hofer and Reginbogin, 588–9)

Albert Speer, Hitler’s architect and wartime armament minister, stated after the war that without certain kinds of synthetic fuel made available by American firms, Hitler “would never have considered invading Poland.” 27 As for the Focke-Wulfs and other fast German fighter planes, they could not have achieved their deadly speed without a component in their fuel known as synthetic tetraethyl; the Germans themselves later admitted that without tetraethyl the entire Blitzkrieg concept of warfare would have been unthinkable.

This magic ingredient was produced by an enterprise named Ethyl GmbH, a daughter firm of a trio formed by Standard Oil, Standard’s German partner IG Farben, and GM. (Hofer and Reginbogin, 589) 28 Blitzkrieg warfare involved perfectly synchronized attacks by land and by air, and this required highly sophisticated communications equipment. ITT’s German subsidiary supplied most of that apparatus, while other state-of-the-art technology useful for Blitzkrieg purposes came compliments of IBM, via its German branch plant, Dehomag. According to Edwin Black, IBM’s know-how enabled the Nazi war machine to “achieve scale, velocity, efficiency”; IBM, he concludes, “put the ‘blitz’ in the krieg for Nazi Germany.” (Black, 208) From the perspective of corporate America it was no catastrophe that Germany had established its mastery over the European continent by the summer of 1940.

Some German subsidiaries of American corporations — for example the Ford-Werke and Coca-Cola’s bottling plant in Essen — were expanding into the occupied countries, riding the coat-tails of the victorious Wehrmacht. IBM’s president, Thomas Watson, was confident that his German branch plant would gain advantage from Hitler’s triumphs. Black writes: “Like many [other US businessmen], Watson expected” that Germany would remain master of Europe, and that IBM would benefit from this by “[ruling] the data domain,” that is, by providing Germany with the technological tools for total control. (Black, 212)

On 26 June 1940 a German commercial delegate organized a dinner at the Waldorf-Astoria hotel in New York to cheer the victories of the Wehrmacht in western Europe. Many leading industrialists attended, including James D. Mooney, the executive in charge of GM’s German operations. Five days later, the German victories were again celebrated in New York, this time at a party hosted by the philo-fascist Rieber, boss of Texaco. Among the leaders of corporate America present were James D. Mooney and Henry Ford’s son, Edsel. 29

What a Wonderful War!

Nineteenfourty proved an exceptionally good year for corporate America. Not only did the subsidiaries in Germany share in the spoils of Hitler’s triumphs, but the European conflict was generating other wonderful opportunities. America herself was now preparing for a possible war, and from Washington orders for trucks, tanks, planes, and ships started rolling in. Moreover, initially on a strict “cash-and-carry” basis and then through “Lend-Lease,” President Roosevelt allowed American industry to supply Great Britain with military hardware and other equipment, thus enabling brave little Albion to continue the war against Hitler indefinitely.

By the end of 1940, all belligerent countries as well as armed neutrals like the US itself were being girded with weaponry cranked out by corporate America’s factories, whether stateside, in Great Britain (where Ford et al., also had branch plants), or in Germany. It was a wonderful war indeed, and the longer it lasted, the better — from a corporate point of view.

Corporate America neither wanted Hitler to lose this war nor to win it; instead they wanted this war to go on as long as possible. Henry Ford had initially refused to produce weapons for Great Britain, but now he changed his tune. According to his biographer, David Lanier Lewis, he “expressed the hope that neither the Allies nor the Axis would win [the war],” and he suggested that the US should supply both the Allies and the Axis powers with “the tools to keep on fighting until they both collapse.” 30

On 22 June 1941 the Wehrmacht rolled across the Soviet border, powered by Ford and GM engines and equipped with the tools produced in Germany by American capital and know-how.

While many leaders of corporate America hoped that the Nazis and the Soviets would remain locked for as long as possible in a war that would debilitate them both, 31 thus prolonging the European war that was proving to be so profitable, the experts in Washington and London predicted that the Soviets would be crushed, “like an egg” by the Wehrmacht. 32 The USSR, however, became the first country to fight the Blitzkrieg to a standstill.

And on 5 December 1941, the Red Army even launched a counter-offensive. 33 It was henceforth evident that the Germans would be preoccupied for quite some time on the Eastern Front, that this would also permit the British to continue to wage war, and that the profitable Lend-Lease business would therefore continue indefinitely. The situation became even more advantageous to corporate America when it appeared that business could henceforth also be done with the Soviets. Indeed, in November 1941, when it had already become clear that the Soviet Union was not about to collapse, Washington agreed to extend credit to Moscow, and concluded a Lend-Lease agreement with the USSR, thus providing the big American corporations with yet another market for their products.

American Aid to the Soviets…and to the Nazis

After the war, it would become customary in the West to claim that the unexpected Soviet success against Nazi Germany had been made possible because of massive American assistance, provided under the terms of a Lend-Lease agreement between Washington and Moscow, and that without this aid the Soviet Union would not have survived the Nazi attack. This claim is doubtful.

First, American material assistance did not become meaningful before 1942, that is, long after the Soviets had single-handedly put an end to the progress made by the Wehrmacht and had launched their first counteroffensive. Second, American aid never represented more than four to five per cent of total Soviet wartime production, although it must be admitted that even such a slim margin may possibly prove crucial in a crisis situation. Third, the Soviets themselves cranked out all of the light and heavy high-quality weapons — such as the T-34 tank, probably the best tank of World War II — that made their success against the Wehrmacht possible. 34 Finally, the much-publicized Lend-Lease aid to the USSR was to a large extent neutralized — and arguably dwarfed — by the unofficial, discreet, but very important assistance provided by American corporate sources to the German enemies of the Soviets. In 1940 and 1941 American oil trusts increased the lucrative oil exports to Germany; large amounts delivered to Nazi Germany via neutral states.

The American share of Germany’s imports of vitally important oil for engine lubrication (Motorenöl) increased rapidly, from 44 per cent in July 1941 to 94 per cent in September 1941. Without US-supplied fuel, the German attack on the Soviet Union would not have been possible, according to the German historian Tobias Jersak, an authority in the field of American “fuel for the Führer.” 35 Hitler was still ruminating the catastrophic news of the Soviet counter-offensive and the failure of the Blitzkrieg in the East, when he learned that the Japanese had launched a surprise attack on Pearl Harbor on 7 December 1941. The US were now at war with Japan, but Washington made no move to declare war on Germany.

Hitler had no obligation to rush to the aid of his Japanese friends, but on 11 December 1941, he declared war on the US, probably expecting — vainly as it turned out — that Japan would reciprocate by declaring war on the Soviet Union. Hitler’s needless declaration of war, accompanied by a similarly frivolous Italian declaration of war, made the US an active participant in the war in Europe. How did this affect the German assets of the big American corporations? 36

Business as Usual

The German subsidiaries of American corporations were not ruthlessly confiscated by the Nazis and removed entirely from the control of stateside corporate headquarters until the defeat of Germany in 1945, as parent companies would claim after the war. Regarding the assets of Ford and GM, for example, the German expert Hans Helms states, “not even once during their terror regime did the Nazis undertake the slightest attempt to change the ownership status of Ford [i.e. the Ford-Werke] or Opel.” 37 Even after Pearl Harbor, Ford retained its 52 per cent of the shares of Ford-Werke in Cologne, and GM remained Opel’s sole proprietor. (Billstein et al., 74, and 141)

Moreover, the American owners and managers maintained a sometimes considerable measure of control over their branch plants in Germany after the German declaration of war on the US. There is evidence that the corporate headquarters in the US and the branch plants in Germany stayed in contact with each other, either indirectly, via subsidiaries in neutral Switzerland, or directly by means of modern worldwide systems of communications. The latter was supplied by ITT in collaboration with Transradio, a joint venture of ITT itself, RCA (another American corporation), and the German firms Siemens and Telefunken. 38

In its recent report on its activities in Nazi Germany, Ford claims that its corporate headquarters in Dearborn had no direct contact with the German subsidiary after Pearl Harbor. As for the possibility of communications via branch plants in neutral countries, the report states that “there is no indication of communication with each other through these subsidiaries.” (Research Findings, 88)

However, the lack of such “indication” may simply mean that any evidence of contacts may have been lost or destroyed before the authors of the report were allowed access to the relevant archives; after all, this archival access was only granted more than 50 years after the facts. Moreover, the report itself acknowledges somewhat contradictorily that an executive of the Ford-Werke did travel to Lisbon in 1943 for a visit to the Portuguese Ford subsidiary, and it is extremely unlikely that Dearborn would have been unaware of this. As for IBM, Edwin Black writes that during the war its general manager for Europe, Dutchman Jurriaan W. Schotte, was stationed in the corporate headquarters in New York, where he “continued to regularly maintain communication with IBM subsidiaries in Nazi territory, such as his native Holland and Belgium.” IBM could also “monitor events and exercise authority in Europe through neutral country subsidiaries,” and especially through its Swiss branch in Geneva, whose director, a Swiss national, “freely travelled to and from Germany, occupied territories, and neutral countries.”

Finally, like many other large US corporations, IBM could also rely on American diplomats stationed in occupied and neutral countries to forward messages via diplomatic pouches. (Black, 339, 376, and 392–5) The Nazis not only allowed the American owners to retain possession and a certain amount of administrative control over their German assets and subsidiaries, but their own intervention in the management of Opel and the Ford-Werke, for example, remained minimal.

After the German declaration of war against the US, the American staff members admittedly disappeared from the scene, but the existing German managers — confidants of the bosses in the US — generally retained their positions of authority and continued to run the businesses, thereby keeping in mind the interests of the corporate headquarters and the shareholders in America.

For Opel, GM’s headquarters in the US retained virtually total control over the managers in Rüsselsheim; so writes American historian Bradford Snell, who devoted attention to this theme in the 1970s, but whose findings were contested by GM. A recent study by German researcher Anita Kugler confirms Snell’s account while providing a more detailed and more nuanced picture. After the German declaration of war on the US, she writes the Nazis initially did not bother the management of Opel at all. Only on 25 November 1942 did Berlin appoint an “enemy assets’ custodian,” but the significance of this move turned out to be merely symbolic. The Nazis simply wanted to create a German image for an enterprise that was owned 100 per cent by GM throughout the war. (Billstein et al., 61)

In the Ford-Werke, Robert Schmidt, allegedly an ardent Nazi, served as general manager during the war, and his performance greatly satisfied both the authorities in Berlin and the Ford managers in America. Messages of approval and even congratulations — signed by Edsel Ford — were regularly forthcoming from Ford’s corporate headquarters in Dearborn. The Nazis too were delighted with Schmidt’s work; in due course they awarded him the title, “leader in the field of the military economy.” Even when, months after Pearl Harbor, a custodian was appointed to oversee the Ford plant in Cologne, Schmidt retained his prerogatives and his freedom of action. 39 IBM’s wartime experience with Axis custodians in Germany, France, Belgium, and other countries was likewise far from traumatic.

According to Black, “they zealously protected the assets, extended productivity, and increased profits”; moreover, “existing IBM managers were kept in place as day-to-day managers and, in some cases, even appointed deputy enemy custodians.” (Black, 376, 400–2, 405, and 415) The Nazis were far less interested in the nationality of the owners or the identity of the managers than in production, because after the failure of their Blitzkrieg strategy in the Soviet Union they experienced an ever-growing need for mass-produced airplanes and trucks.

Ever since Henry Ford had pioneered the use of the assembly line and other “Fordist” techniques, American firms had been the leaders in the field of industrial mass production, and the American branch plants in Germany, including GM’s Opel subsidiary, were no exception to this general rule. Nazi planners like Göring and Speer understood that radical changes in Opel’s management might hinder production in Brandenburg and Rüsselsheim. To maintain Opel’s output at high levels, the managers in charge were allowed to carry on because they were familiar with the particularly efficient American methods of production. Anita Kugler concludes that Opel, “made its entire production and research available to the Nazis and thus — objectively speaking — contributed to enhance their long-term capability to wage war.” (Billstein et al., 81) 40

Experts believe that GM’s and Ford’s best wartime technological innovations primarily benefitted their branch plants in Nazi Germany. As examples they cite all-wheel-drive Opel trucks, which proved eminently useful to the Germans in the mud of the Eastern Front and in the desert of North Africa, as well as the engines for the brand new ME-262, the first jet fighter, were also assembled by Opel in Rüsselsheim. 41 As for the Ford-Werke, in 1939 this firm also developed a state-of-the-art truck — the Maultier (“mule”) — that had wheels on the front and a track on the back end. The Ford-Werke also created a “cloak company,” Arendt GmbH, to produce war equipment other than vehicles, specifically machining parts for airplanes. But Ford claims that this was done without Dearborn’s knowledge or approval.

Towards the end of the war this factory was involved in the top-secret development of turbines for the infamous V-2 rockets that wreaked devastation on London and Antwerp. (Research Findings, 41–2) ITT continued to supply Germany with advanced communication systems after Pearl Harbor, to the detriment of the Americans themselves, whose diplomatic code was broken by the Nazis with the help of such equipment. 42 Until the very end of the war, ITT’s production facilities in Germany as well as in neutral countries such as Sweden, Switzerland, and Spain provided the German armed forces with state-of-the-art martial toys. Charles Higham offers specifics:

After Pearl Harbor the German army, navy, and air force contracted with ITT for the manufacture of switchboards, telephones, alarm gongs, buoys, air raid warning devices, radar equipment, and thirty thousand fuses per month for artillery shells … This was to increase to fifty thousand per month by 1944. In addition, ITT supplied ingredients for the rocket bombs that fell on London, selenium cells for dry rectifiers, high-frequency radio equipment, and fortification and field communication sets. Without this supply of crucial materials it would have been impossible for the German air force to kill American and British troops, for the German army to fight the Allies, for England to have been bombed, or for Allied ships to have been attacked at sea. 43

No surprise then that the German subsidiaries of American enterprises were regarded as “pioneers of technological development” by the planners in Germany’s Reich Economics Ministry and other Nazi authorities involved in the war effort. 44

Edwin Black also claims that IBM’s advanced punch card technology, precursor to the computer, enabled the Nazis to automate persecution. IBM allegedly put the fantastical numbers in the Holocaust, because it supplied the Hitler regime with the Hollerith calculating machines and other tools that were used to “generate lists of Jews and other victims, who were then targeted for deportation” and to “register inmates [of concentration camps] and track slave labor.” (Black, xx) However, critics of Black’s study maintain that the Nazis could and would have achieved their deadly efficiency without the benefit of IBM’s technology. In any event, the case of IBM provides yet another example of how US corporations supplied state-of-the-art technology to the Nazis and obviously did not care too much for what evil purposes this technology would be used.

Profits über Alles!

The owners and managers of the parent firms in the US cared little what products were developed and rolled off the German assembly lines. What counted for them and for the shareholders were only the profits. Branch plants of American corporations in Germany achieved considerable earnings during the war, and this money was not pocketed by the Nazis. For the Ford-Werke precise figures are available.

The profits of Dearborn’s German subsidiary rose from 1.2 million RM in 1939 to 1.7 million RM in 1940, 1.8 million RM in 1941, 2.0 million RM in 1942, and 2.1 million RM in 1943. (Research Findings, 136). 45 The Ford subsidiaries in occupied France, Holland, and Belgium, where the American corporate giant also made an industrial contribution to the Nazi war effort, were likewise extraordinarily successful. Ford-France, for example — not a flourishing firm before the war — became very profitable after 1940 thanks to its unconditional collaboration with the Germans; in 1941 it registered earnings of 58 million francs, an achievement for which it was warmly congratulated by Edsel Ford. (Billstein et al, 106; and Research Findings, 73–5) 46

As for Opel, that firm’s profits skyrocketed to the point where the Nazi Ministry of Economics banned their publication to avoid bad blood on the part of the German population, which was increasingly being asked to tighten its collective belt. (Billstein et al, 73) 47 IBM not only experienced soaring profits in its German branch plant, but, like Ford, also saw its profits in occupied France jump primarily because of business generated through eager collaboration with the German occupation authorities. It was soon necessary to build new factories. Above all, however, IBM prospered in Germany and in the occupied countries because it sold the Nazis the technological tools required for identifying, deporting, ghettoizing, enslaving, and ultimately exterminating millions of European Jews, in other words, for organizing the Holocaust. (Black, 212, 253, and 297–9)

It is far from clear what happened to the profits made in Germany during the war by American subsidiaries, but some tantalizing tidbits of information have nevertheless emerged. In the 1930s American corporations had developed various strategies to circumvent the Nazis’ embargo on profit repatriation. IBM’s head office in New York, for example, regularly billed Dehomag for royalties due to the parent firm, for repayment of contrived loans, and for other fees and expenses; this practice and other byzantine inter-company transactions minimized profits in Germany and thus simultaneously functioned as an effective tax-avoidance scheme. In addition, there were other ways of handling the embargo on profit repatriation, such as reinvestment within Germany, but after 1939 this option was no longer permitted, at least not in theory.

In practice, the American subsidiaries did manage to quite considerably increase their assets that way. Opel, for example, took over a foundry in Leipzig in 1942. 48 It also remained possible to use earnings in order to improve and modernize the branch plant’s own infrastructure, that too, happened in the case of Opel.

There also existed opportunities for expansion in the occupied countries of Europe. Ford’s subsidiary in France used its profits in 1941 to build a tank factory in Oran, Algeria; this plant allegedly provided Rommel’s Africa Corps with the hardware needed to advance all the way to El Alamein in Egypt. In 1943 the Ford-Werke also established a foundry not far from Cologne, just across the Belgian border near Liège, to produce spare parts. (Research Findings, 133) It is likely, furthermore, that a portion of the lucre amassed in the Third Reich was transferred back to the US in some way, for example, by way of neutral Switzerland. Many US corporations maintained offices there that served as intermediaries between stateside headquarters and their subsidiaries in enemy or occupied countries, and that were also involved in “profit funnelling,” as Edwin Black writes in connection with the Swiss branch of IBM. (Black, 73) 49

For the purpose of profit repatriation, corporations could also call on the experienced services of the Paris branches of some American banks, such as Chase Manhattan and J.P. Morgan, and of a number of Swiss banks. Chase Manhattan was part of the Rockefeller empire, as was Standard Oil, IG Farben’s American partner; its branch in German-occupied Paris remained open throughout the war and profited handsomely from close collaboration with the German authorities. On the Swiss side there also happened to be some financial institutions involved that — without asking difficult questions — took care of the gold robbed by the Nazis from their Jewish victims. An important role was played in this respect by the Bank for International Settlements (BIS) in Basel, a presumably international bank that had been founded in 1930 within the framework of the Young Plan for the purpose of facilitating German reparation payments after World War I.

American and German bankers (such as Schacht) dominated the BIS from the start and collaborated cozily in this financial venture. During the war, a German and a member of the Nazi Party, Paul Hechler, functioned as director of the BIS, while an American, Thomas H. McKittrick, served as president. McKittrick was a good friend of the American ambassador in Berne and American secret service [OSS, forerunner of the CIA] agent in Switzerland, Allen Dulles. Before the war, Allen Dulles and his brother John Foster Dulles had been partners in the New York law firm of Sullivan & Cromwell, and had specialized in the very profitable business of handling American investments in Germany. They had excellent connections with the owners and top managers of American corporations and with bankers, businessmen, and government officials — including Nazi bigwigs — in Germany. After the outbreak of war, John Foster became the corporate lawyer for the BIS in New York, while Allen joined the OSS and took up a post in Switzerland, where he happened to befriend McKittrick. It is widely known that during the war the BIS handled enormous amounts of money and gold originating in Nazi Germany. 50 Is it unreasonable to suspect that these transfers might have involved US-bound profits of American branch plants, in other words, money hoarded by clients and associates of the ubiquitous Dulles brothers?

Bring on the Slave Labour!

Before the war, German corporations had eagerly taken advantage of the big favour done for them by the Nazis, namely the elimination of the labour unions and the resulting transformation of the formerly militant German working class into a meek “mass of followers.” Not surprisingly, in Nazi Germany real wages declined rapidly while profits increased correspondingly. During the war prices continued to rise, while wages were gradually eroded and working hours were increased. 51 This was also the experience of the labour force of the American subsidiaries. In order to combat the labour shortages in the factories, the Nazis relied increasingly on foreign labourers who were put to work in Germany under frequently inhuman conditions.

Together with hundreds of thousands of Soviet and other POWs as well as inmates of concentration camps, these Fremdarbeiter (forced labourers) formed a gigantic pool of workers that could be exploited at will by whomever recruited them, in return for a modest remuneration paid to the SS. The SS, moreover, also maintained the required discipline and order with an iron hand. Wage costs thus sank to a level of which today’s downsizers can only dream, and the corporate profits augmented correspondingly.

The German branch plants of American corporations also made eager use of slave labour supplied by the Nazis, not only Fremdarbeiter, but also POWs and even concentration camp inmates. For example, the Yale & Towne Manufacturing Company based in Velbert in the Rhineland reportedly relied on “the aid of labourers from Eastern Europe” to make “considerable profits,” 52 and Coca-Cola is also noted to have benefitted from the use of foreign workers, as well as prisoners of war in its Fanta plants. 53 The most spectacular examples of the use of forced labour by American subsidiaries, however, appear to have been provided by Ford and GM, two cases that were recently the subject of a thorough investigation.

Of the Ford-Werke it is alleged that starting in 1942 this firm “zealously, aggressively, and successfully” pursued the use of foreign workers and POWs from the Soviet Union, France, Belgium, and other occupied countries — apparently with the knowledge of corporate headquarters in the US. 54 Karola Fings, a German researcher who has carefully studied the wartime activities of the Ford-Werke, writes:

[Ford] did wonderful business with the Nazis. Because the acceleration of production during the war opened up totally new opportunities to keep the level of wage costs low. A general freeze on wage increases was in effect in the Ford-Werke from 1941 on. However, the biggest profit margins could be achieved by means of the use of so-called Ostarbeiter [forced workers from Eastern Europe]. 55 The thousands of foreign forced labourers put to work in the Ford-Werke were forced to slave away every day except Sunday for twelve hours, and for this they received no wage whatsoever.

Presumably even worse was the treatment reserved for the relatively small number of inmates of the concentration camp of Buchenwald, who were made available to the Ford-Werke in the summer of 1944. (Research Findings, 45–72) In contrast to the Ford-Werke, Opel never used concentration camp inmates, at least not in the firm’s main plants in Rüsselsheim and Brandenburg. The German subsidiary of GM, however, did have an insatiable appetite for other types of forced labour, such as POWs. Typical of the use of slave labour in the Opel factories, particularly when it involved Russians, writes historian Anita Kugler, were “maximum exploitation, the worst possible treatment, and…capital punishment even in the case of minor offences.” The Gestapo was in charge of supervising the foreign labourers. 56

A Licence to Work for the Enemy

In the US, the parent corporations of German subsidiaries worked very hard to convince the American public of their patriotism, so that no ordinary American would have thought that GM, for example, which financed anti-German posters at home, was involved on the distant banks of the Rhine in activities that amounted to treason. 57

Washington was far better informed than John Doe, but the American government observed the unwritten rule stipulating that “what is good for General Motors is good for America,” and turned a blind eye to the fact that American corporations accumulated riches through their investments in, or trade with, a country with which the US was at war.

This had a lot to do with the fact that corporate America became even more influential in Washington during the war than it had been before; indeed, after Pearl Harbor representatives of “big business” flocked to the capital in order to take over many important government posts.

Supposedly they were motivated by sterling patriotism and offered their services for a pittance, and they became known as “dollar-a-year men.” Many, however, appeared to be there in order to protect their German assets. Former GM president William S. Knudsen, an outspoken admirer of Hitler since 1933 and friend of Göring, became director of the Office of Production Management. Another GM executive, Edward Stettinius Jr., became Secretary of State, and Charles E. Wilson, president of General Electric, became “the powerful number-two man at the War Production Board.” 58

Under these circumstances, is it any wonder that the American government preferred to look the other way while the country’s big corporations squirreled in the land of the German enemy? In fact, Washington virtually legitimated these activities. Barely one week after the Japanese attack on Pearl Harbor, on 13 December 1941, President Roosevelt himself discreetly issued an edict allowing American corporations to do business with enemy countries — or with neutral countries that were friendly with enemies — by means of a special authorization. 59

This order clearly contravened the supposedly strict laws against all forms of “trading with the enemy.” Presumably, Washington could not afford to offend the country’s big corporations, whose expertise was needed in order to bring the war to a successful end. As Charles Higham has written, Roosevelt’s administration “had to get into bed with the oil companies [and with the other big corporations] in order to win the war.” Consequently, government officials systematically turned a blind eye to the unpatriotic conduct of American investment capital abroad, but there were some exceptions to this general rule. “In order to satisfy public opinion,” writes Higham, token legal action was taken in 1942 against the best-known violator of the “trading with the enemy” legislation, Standard Oil. But Standard pointed out that it “was fueling a high percentage of the Army, Navy, and Air Force, [thus] making it possible for America to win the war.”

The Rockefeller enterprise eventually agreed to pay a minor fine “for having betrayed America” but was allowed to continue its profitable commerce with the enemies of the United States. 60 A tentative investigation into IBM’s arguably treasonous activities in the land of the Nazi enemy was similarly aborted because the US needed IBM technology as much as the Nazis did. Edwin Black writes: “IBM was in some ways bigger than the war.” Both sides could not afford to proceed without the company’s all-important technology. “Hitler needed IBM. So did the Allies.” (Black, 333, and 348) Uncle Sam briefly wagged a finger at Standard Oil and IBM, but most owners and managers of corporations who did business with Hitler were never bothered at all. The connections of ITT’s Sosthenes Behn with Nazi Germany, for example, were a public secret in Washington, but he never experienced any difficulties as a result of them. Meanwhile, it would appear that the headquarters of the Western Allies were keen to go as easy as possible on the American-owned enterprises in Germany. According to German expert Hans G. Helms, Bernard Baruch, a high-level advisor to President Roosevelt, had given the order not to bomb certain factories in Germany, or to bomb them only lightly; it is hardly surprising that the branch plants of American corporations fell into this category. And indeed, while Cologne’s historical city centre was flattened in repeated bombing raids, the large Ford factory on the outskirts of the city enjoyed the reputation of being the safest place in town during air attacks, although some bombs did of course occasionally fall on its properties. (Billstein et al, 98-100) 61

After the war GM and the other American corporations that had done business in Germany were not only not punished, but even compensated for damages suffered by their German subsidiaries as a result of Anglo-American bombing raids. General Motors received 33 million dollars and ITT 27 million dollars from the American government as indemnification. The Ford-Werke had suffered relatively little damage during the war, and had received more than 100,000 dollars in compensation from the Nazi regime itself; Ford’s branch plant in France, meanwhile, had managed to wrest an indemnification of 38 million francs from the Vichy Regime. Ford nevertheless applied in Washington for 7 million dollars worth of damages, and after much wrangling received a total of 785,321 dollars “for its share of allowable losses sustained by Ford-Werke and Ford of Austria during the war,” which the company has acknowledged in its recently published report. (Research Findings, 109)

Corporate America and Post-War Germany

When the war in Europe ended, corporate America was well positioned to help determine what would happen to defeated Germany in general, and to their German assets in particular. Long before the guns fell silent, Allan Dulles from his observation post in Berne, Switzerland, established contact with the German associates of the American corporations he had earlier served as a lawyer in Sullivan & Cromwell, and as Patton’s tanks pushed deep into the Reich in the spring of 1945, ITT boss Sosthenes Behn donned the uniform of an American officer and rode into defeated Germany to personally inspect his subsidiaries there. More importantly the administration in the US occupation zone of Germany teemed with representatives of firms such as GM and ITT. 62 They were there, of course, to ensure that Corporate America would continue to enjoy the full usufruct of its profitable investments in defeated and occupied Germany. One of their first concerns was to prevent the implementation of the Morgenthau Plan. Henry Morgenthau was Roosevelt’s secretary of the Treasury, who had proposed to dismantle German industry, thereby transforming Germany into a backward, poor, and therefore harmless agrarian state.

The owners and managers of corporations with German assets were keenly aware that implementation of the Morgenthau Plan meant the financial death knell for their German subsidiaries; so they fought it tooth and nail. A particularly outspoken opponent of the plan was Alfred P. Sloan, the influential chairman of the board of GM. Sloan, other captains of industry, and their representatives and contacts in Washington and within the American occupation authorities in Germany, favoured an alternative option: the economic reconstruction of Germany, so that they would be able to do business and make money in Germany, and eventually they got what they wanted. After the death of Roosevelt, the Morgenthau Plan was quietly shelved, and Morgenthau himself would be dismissed from his high-ranking government position on 5 July 1945 by President Harry Truman. Germany — or at least the western part of Germany — would be economically reconstructed, and US subsidiaries would turn out to be major beneficiaries of this development. 63

The American occupation authorities in Germany in general, and the agents of American parent companies of German subsidiaries within this administration in particular, faced another problem. After the demise of Nazism and of European fascism in general, the general mood in Europe was — and would remain for a few short years — decidedly anti-fascist and simultaneously more or less anti-capitalist, because it was widely understood at that time that fascism had been a manifestation of capitalism. Almost everywhere in Europe, and particularly in Germany, radical grassroots associations, such as the German anti-fascist groups or Antifas, sprang up spontaneously and became influential. Labour unions and left-wing political parties also experienced successful comebacks; they enjoyed wide popular support when they denounced Germany’s bankers and industrialists for bringing Hitler to power and for collaborating closely with his regime, and when they proposed more or less radical anti-capitalist reforms such as the socialization of certain firms and industry sectors.

Such reform plans, however, violated American dogmas regarding the inviolability of private property and free enterprise, and were obviously a major source of concern to American industrialists with assets in Germany. 64 The latter were also aghast at the emergence in Germany of democratically elected “works’ councils” that demanded input into the affairs of firms. To make matters worse, the workers frequently elected Communists to these councils. This happened in the most important American branch plants, Ford-Werke and Opel.

The Communists played an important role in Opel’s work’s council until 1948, when GM officially resumed Opel’s management and promptly put an end to the experiment. The American authorities systematically opposed the anti-fascists and sabotaged their schemes for social and economic reform at all levels of public administration as well as in private business. In the Opel plant in Rüsselsheim, for example, the American authorities collaborated only reluctantly with the anti-fascists, while doing everything in their power to prevent the establishment of new labour unions and to deny the works’ councils any say in the firm’s management. Instead of allowing the planned democratic “bottom-up” reforms to blossom, the Americans proceeded to restore authoritarian “top-down” structures wherever possible.

They pushed the anti-fascists aside in favour of conservative, authoritarian, right-wing personalities, including many former Nazis. At the Ford-Werke in Cologne, anti-fascist pressure forced the Americans to dismiss the Nazi general manager Robert Schmidt, but thanks to Dearborn and the American occupation authorities he and many other Nazi managers were soon firmly back in the saddle. 65

Capitalism, Democracy, Fascism, and War

“About the things one cannot speak about, one ought to remain silent,” declared the famous philosopher Wittgenstein, and a colleague, Max Horkheimer, paraphrased him with regard to the phenomenon of fascism and its German variety, Nazism, by emphasizing that if one wants to talk about fascism, one cannot remain silent about capitalism.

Hitler’s Third Reich was a monstrous system made possible by Germany’s top business leaders, and while it proved a catastophe for millions of people, it functioned as a Nirvana for corporate Germany. Foreign-owned enterprises were also allowed to enjoy the wonderful services

Hitler’s regime rendered to das Kapital, such as the elimination of all workers’ parties and labour unions, a rearmament program that brought them immense profits, and a war of conquest that eliminated foreign competition and provided new markets, cheap raw materials, and an unlimited supply of even cheaper labour from POWs, foreign slave labourers, and concentration camp inmates. The owners and managers of America’s leading corporations admired Hitler because in his Third Reich they could make money like nowhere else, and because he stomped on German labour and swore to destroy the Soviet Union, homeland of international communism.

Edwin Black wrongly believes that IBM was atypical of American corporations in flourishing from capitalism’s great fascist feast on the banks of the Rhine. Many, if not all of these corporations, took full advantage of the elimination of labour unions and left-wing parties and the orgy of orders and profits made possible by rearmament and war. They betrayed their country by producing all sorts of equipment for Hitler’s war machine even after Pearl Harbor, and they objectively helped the Nazis to commit horrible crimes.

These technicalities, however, did not seem to perturb the owners and managers in Germany and even in the US, who were aware of what was going on overseas. All that mattered to them, clearly, was that unconditional collaboration with Hitler allowed them to make profits like never before; their motto might well have been: “profits über Alles.” After the war, the capitalist masters and associates of the fascist monster distanced themselves à la Dr. Frankenstein from their creature, and loudly proclaimed their preference for democratic forms of government. Today, most of our political leaders and our media want us to believe that “free markets” — a euphemistic code word for capitalism — and democracy are Siamese twins. Even after World War II, however, capitalism, and especially American capitalism, continued to collaborate cozily with fascist regimes in countries such as Spain, Portugal, Greece, and Chile, while supporting extreme-right movements, including death squads and terrorists, in Latin America, Africa, and elsewhere.

One might say that in the headquarters of the corporations, whose collective interest is clearly reflected in American government policies, nostalgia has lingered on for the good old days of Hitler’s Third Reich, which was a paradise for German as well as American and other foreign firms: no left-wing parties, no unions, unlimited numbers of slave labourers, and an authoritarian state that provided the necessary discipline and arranged for an “armament boom” and eventually a war that brought “horizonless profits,” as Black writes, alluding to the case of IBM.

These benefits could more readily be expected from a fascist dictatorship than from a genuine democracy, hence the support for the Francos, Suhartos, and other Pinochets of the post-war world. But even within democratic societies, capitalism actively seeks the cheap and meek labour that Hitler’s regime served up on a silver platter, and recently it has been by means of stealthy instruments such as downsizing and globalization, rather than the medium of fascism, that American and international capital have sought to achieve the corporate Nirvana of which Hitler’s Germany had provided a tantalizing foretaste.

Important References:

See Edwin Black, IBM and the Holocaust: The Strategic Alliance between Nazi Germany and America’s Most Powerful Corporation (London: Crown Publishers, 2001)

Walter Hofer and Herbert R. Reginbogin, Hitler, der Westen und die Schweiz 1936–1945 (Zürich: NZZ Publishing House, 2002)

Reinhold Billstein, Karola Fings, Anita Kugler, and Nicholas Levis, Working for the Enemy: Ford, General Motors, and Forced Labor during the Second World War ( New York: Berghahn, 2000) Research Findings About Ford-Werke Under the Nazi Regime (Dearborn, MI: Ford Motor Company, 2001)

Notes

1 Michael Dobbs, “US Automakers Fight Claims of Aiding Nazis,” The International Herald Tribune, 3 December 1998.

2 David F. Schmitz, “‘A Fine Young Revolution’: The United States and the Fascist Revolution in Italy, 1919–1925,” Radical History Review, 33 (September 1985), 117–38; and John P. Diggins, Mussolini and Fascism: The View from America (Princeton 1972).

3 Gabriel Kolko, “American Business and Germany, 1930–1941,” The Western Political Quarterly, 25 (December 1962), 714, refers to the “‘skepticism’ displayed by the American business press with respect to Hitler because he was ‘a political and economic nonconformist.’”

4 Neil Baldwin, Henry Ford and the Jews: The Mass Production of Hate (New York 2001), especially 172–91.

5 Charles Higham, Trading with the Enemy: An Exposé of The Nazi-American Money Plot 1933–1949 (New York 1983), 162.

6 Webster G. Tarpley and Anton Chaitkin, “The Hitler Project,” chapter 2 in George Bush: The Unauthorized Biography (Washington 1991). Available online at < http://www.tarpley.net/bush2.htm >.

7 Mark Pendergrast, For God, Country, and Coca-Cola: The Unauthorized History of the Great American Soft Drink and the Company that Makes It (New York 1993), 221.

8 Cited in Manfred Overesch, Machtergreifung von links: Thüringen 1945/46 (Hildesheim Germany 1993), 64.

9 Knudsen described Nazi Germany after a visit there in 1933 as “the miracle of the twentieth century.” Higham, Trading With the Enemy, 163.

10 Stephan H. Lindner, Das Reichskommissariat für die Behandlung feindliches Vermögens im Zweiten Weltkrieg: Eine Studie zur Verwaltungs-, Rechts- and Wirtschaftsgeschichte des nationalsozialistischen Deutschlands (Stuttgart 1991), 121; Simon Reich, The Fruits of Fascism: Postwar Prosperity in Historical Perspective (Ithaca, NY and London 1990), 109, 117, 247; and Ken Silverstein, “Ford and the Führer,” The Nation, 24 January 2000, 11–6.

11 Cited in Michael Dobbs, “Ford and GM Scrutinized for Alleged Nazi Collaboration,” The Washington Post, 12 December 1998.

12 Tobias Jersak, “Öl für den Führer,” Frankfurter Allgemeine Zeitung, 11 February 1999.

13 Higham, Trading With the Enemy, xvi.

14 The authors of a recent book on the Holocaust even emphasize that “in 1930 anti-Semitism was much more visible and blatant in the United States than in Germany.” See Suzy Hansen’s interview with Deborah Dwork and Robert Jan Van Pelt, authors of Holocaust: a History,< http:/salon.com/books/int/2002/10/02/dwork/index.html. >

15 Henry Ford, The International Jew: The World’s Foremost Problem (Dearborn, MI n.d.); and Higham, Trading With the Enemy, 162.

16 Aino J. Mayer, Why Did the Heavens not Darken? The Final Solution in History (New York 1988).

17 Neil Baldwin, Henry Ford and the Jews: The Mass Production of Hate, 279; and Higham, Trading With the Enemy, 161.

18 Upton Sinclair, The Flivver King: A Story of Ford-America (Pasadena, CA 1937), 236.

19 Higham, Trading With the Enemy, 162–4.

20 See Bernd Martin, Friedensinitiativen und Machtpolitik im Zweiten Weltkrieg 1939–1942 (Düsseldorf 1974); and Richard Overy, Russia’s War (London 1998), 34–5.

21 See Clement Leibovitz and Alvin Finkel, In Our Time: The Chamberlain-Hitler Collusion (New York 1998).

22 John H. Backer, “From Morgenthau Plan to Marshall Plan,” in Robert Wolfe, ed., Americans as Proconsuls: United States Military Governments in Germany and Japan, 1944–1952 (Carbondale and Edwardsville, IL 1984), 162.

23 Mooney is cited in Andreas Hillgruber, ed., Staatsmänner und Diplomaten bei Hitler. Vertrauliche Aufzeichnungen über Unterredungen mit Vertretern des Auslandes 1939–1941 (Frankfurt am Main 1967), 85.

24 Anita Kugler, “Das Opel-Management während des Zweiten Weltkrieges. Die Behandlung ‘feindlichen Vermögens’ und die ‘Selbstverantwortung’ der Rüstungsindustrie,” in Bernd Heyl and Andrea Neugebauer, ed., “… ohne Rücksicht auf die Verhältnisse”: Opel zwischen Weltwirtschaftskrise and Wiederaufbau, (Frankfurt am Main 1997), 35–68, and 40–1; “Flugzeuge für den Führer. Deutsche ‘Gefolgschaftsmitglieder’ und ausländische Zwangsarbeiter im Opel-Werk in Rüsselsheim 1940 bis 1945,” in Heyl and Neugebauer, “… ohne Rücksicht auf die Verhältnisse,” 69–92; and Hans G. Helms, “Ford und die Nazis,” in Komila Felinska, ed., Zwangsarbeit bei Ford (Cologne 1996), 113.

25 Higham, Trading With the Enemy, 93, and 95.

26 Jersak, “Öl für den Fühier”; Bernd Martin, “Friedens-Planungen der multinationalen Grossindustrie (1932–1940) als politische Krisenstrategie,” Geschichte und Gesellschaft, 2 (1976), 82.

27 Cited in Dobbs, “U.S. Automakers.”

28 Jamie Lincoln Kitman, “The Secret History of Lead,” The Nation, 20 March 2002.

29 Higham, Trading With the Enemy, 97; Ed Cray, Chrome Colossus: General Motors and its Times (New York 1980), 315; and Anthony Sampson, The Seven Sisters: The Great Oil Companies and the World They Made (New York 1975), 82.

30 David Lanier Lewis, The Public Image of Henry Ford: an American Folk Hero and His Company (Detroit 1976), 222, and 270.

31 Ralph B. Levering, American Opinion and the Russian Alliance, 1939–1945 (Chapel Hill, NC 1976), 46; and Wayne S. Cole, Roosevelt and the Isolationists, 1932–45 (Lincoln, NE 1983), 433–34.

32 The hope for a long, drawn-out conflict between Berlin and Moscow was reflected in many newspaper articles and in the much-publicized remark uttered by Senator Harry S. Truman on 24 June 1941, only two days after the start of Operation Barbarossa, the Nazi attack on the Soviet Union: “If we see that Germany is winning, we should help Russia, and if Russia is winning, we should help Germany, so that as many as possible perish on both sides ….” Levering, American Opinion, 46–7.

33 Even as late as 5 December 1941, just two days before the Japanese strike against Pearl Harbor, a caricature in Hearst’s Chicago Tribune suggested that it would be ideal for “civilization” if these “dangerous beasts,” the Nazis and the Soviets, “destroyed each other.” The Chicago Tribune caricature is reproduced in Roy Douglas, The World War 1939–1943: The Cartoonists’ Vision (London and New York 1990), 86.

34 Clive Ponting, Armageddon: The Second World War (London 1995), 106; and Stephen E. Ambrose, Americans at War (New York 1998), 76–77.

35 Jersak, “Öl fürden Führer.” Jersak used a “top secret” document produced by the Wehrmacht Reichsstelle für Mineralöl, now in the military section of the Bundesarchiv (Federal Archives), File RW 19/2694. See also Higham, Trading With the Enemy, 59–61.

36 James V. Compton, “The Swastika and the Eagle,” in Arnold A. Offner, ed., America and the Origins of World War II, 1933–1941 (New York 1971), 179–83; Melvin Small, “The ‘Lessons’ of the Past: Second Thoughts about World War II,” in Norman K. Risjord , ed., Insights on American History. Volume II (San Diego 1988), 20; and Andreas Hillgruber, ed., Der Zweite Weltkrieg 1939–1945: Kriegsziele und Strategie der Grossen Mächte, 5th ed., (Stuttgart 1989), 83–4.

37 Helms, “Ford und die Nazis,” 114.

38 Helms, “Ford und die Nazis,” 14–5; and Higham, Trading With the Enemy, 104–5.

39 Silverstein, “Ford and the Führer,” 15–6; and Lindner, Das Reichskommüsariet, 121.

40 Kugler, “Das Opel-Management,” 52, 61 ff., and 67; and Kugler, “Flugzeuge,” 85.

41 Snell, “GM and the Nazis,” Ramparts, 12 (June 1974), 14–15; Kugler, “Das Opel-Management,” 53, and 67; and Kugler, “Flugzeuge,” 89.

42 Higham, Trading With the Enemy, 112.

43 Higham, Trading With the Enemy, 99.

44 Lindner, Das Reichskommissariet, 104.

45 Silverstein, “Ford and the Führer,” 12, and 14; Helms, “Ford und die Nazis,” 115; and Reich, The Fruits of Fascism, 121, and 123.

46 Silverstein, “Ford and the Führer,” 15–16.

47 Kugler, “Das Opel-Management,” 55, and 67; and Kugler, “Flugzeuge,” 85.

48 Communication of A. Neugebauer of the city archives in Rüsselsheim to the author, 4 February 2000; and Lindner, Das Reichskommissariat, 126–27.

49 Helms, “Ford und die Nazis,” 115.

50 Gian Trepp, “Kapital über alles: Zentralbankenkooperation bei der Bank für Internationalen Zahlungsausgleich im Zweiten Weltkrieg,” in Philipp Sarasin und Regina Wecker, eds., Raubgold, Reduit, Flüchtlinge: Zur Geschichte der Schweiz im Zweiten Weltkrieg (Zürich 1998), 71–80; Higham, Trading With the Enemy, 1–19 and 175; Anthony Sampson, The Sovereign State of ITT (New York 1973), 47; “VS-Banken collaboreerden met nazi’s,” Het Nieuwsblad, Brussels, 26 December 1998; and William Clarke, “Nazi Gold: The Role of the Central Banks — Where Does the Blame Lie?,” Central Banking, 8, (Summer 1997),< http://www.centralbanking.co.uk/cbv8n11.html. >

51 Bernt Engelmann, Einig and gegen Recht und Freiheit: Ein deutsches Anti-Geschichtsbuch (München 1975), 263–4; Marie-Luise Recker, “Zwischen sozialer Befriedung und materieller Ausbeutung: Lohn- und Arbeitsbedingungen im Zweiten Weltkrieg,” in Wolfgang Michalka, ed., Der Zweite Weltkrieg. Analysen, Grundzüge, Forschungsbilanz (Munich and Zürich 1989), 430–44, especially 436.

52 Lindner, Das Reichkommissariat, 118.

53 Pendergrast, For God, Country, and Coca-Cola, 228.

54 “Ford-Konzern wegen Zwangsarbeit verklagt,” Kölner Stadt-Anzeiger, 6 March 1998 as cited in Antifaschistisck Nochrichten, 6 (1998),< http://www.antifaschistischenachricten.de/1998/06/010.htm. >

55 Karola Fings, “Zwangsarbeit bei den Kölner Ford-Werken,” in Felinska, Zwangsarbeit bei Ford, (Cologne 1996), 108. See also Silverstein, “Ford and the Führer,” 14; and Billstein et al., 53–5, 135–56.

56 Kugler, “Das Opel-Management,” 57; Kugler, “Flugzeuge,” 72–6, quotation from 76; and Billstein et al., 53–5.

57 GM-financed patriotic posters may be found in the Still Pictures Branch of the National Archives in Washington, DC.

58 Michael S. Sherry, In the Shadow of War:The United States Since the 1930s (New Haven and London 1995), 172.

59 Higham, Trading With the Enemy, xv, and xxi.

60 Higham, Trading With the Enemy, 44–6.

61 Helms, “Ford und die Nazis,” 115–6; Reich, The Fruits of Fascism, 124–5; and Mira Wilkins and Frank Ernest Hill, American Business Abroad: Ford on Six Continents (Detroit 1964), 344–6.

62 Higham, Trading With the Enemy, 212–23; Carolyn Woods Eisenberg, “U.S. Policy in Post-war Germany: The Conservative Restoration,” Science and Society, 46 (Spring 1982), 29; Carolyn Woods Eisenberg, “The Limits of Democracy: US Policy and the Rights of German Labor, 1945–1949,” in Michael Ermarth, ed., America and the Shaping of German Society, 1945–1955 (Providence, RI and Oxford 1993), 63–4; Billstein et al., 96–97; and Werner Link, Deutsche und amerikanische Gewerkschaften und Geschäftsleute 1945–1975: Eine Studie über transnationale Beziehungen (Düsseldorf 1978), 100–06, and 88.

63 Gabriel Kolko, The Politics of War: The World and United States Foreign Policy, 1943–1945 (New York 1968), 331, and 348–9; Wilfried Loth, Stalins ungeliebtes Kind: Warum Moskau die DDR nicht wollte (Berlin 1994), 18; Wolfgang Krieger, “Die American Deutschlandplanung, Hypotheken und Chancen für einen Neuanfang,” in Hans-Erich Volkmann, ed., Ende des Dritten Reiches — Ende des Zweiten Weltkriegs: Eine perspektivische Rückschau (Munich and Zürich 1995), 36, and 40–1; and Lloyd C. Gardner, Architects of Illusion: Men and Ideas in American Foreign Policy 1941–1949 (Chicago 1970), 250–1.

64 Kolko, The Politics of War, 507–11; Rolf Steininger, Deutsche Geschichte 1945–1961: Darstellung und Dokumente in zwei Bänden. Band 1 (Frankfurt am Main 1983), 117–8; Joyce and Gabriel Kolko, The Limits of Power: The World and United States Foreign Policy, 1945–1954 (New York 1972), 125–6; Reinhard Kühnl, Formen bürgerlicher Herrschaft: Liberalismus — Faschismus (Reinbek bei Hamburg 1971), 71; Reinhard Kühnl, ed., Geschichte und Ideologie: Kritische Analyse bundesdeutscher Geschichtsbücher, second edition (Reinbek bei Hamburg 1973), 138–9; Peter Altmann, ed., Hauptsache Frieden. Kriegsende-Befreiung-Neubeginn 1945–1949: Vom antifaschistischen Konsens zum Grundgesetz (Frankfurt-am-Main, 1985), 58 ff.; and Gerhard Stuby, “Die Verhinderung der antifascistisch-demokratischen Umwälzung und die Restauration in der BRD von 1945–1961,” in Reinhard Kühnl, ed., Der bürgerliche Staat der Gegenwart: Formen bürgerlicher Herrschaft II (Reinbek bei Hamburg 1972), 91–101.

65 Silverstein, “Ford and the Führer,” 15–6; and Lindner, Das Reichskommissariat, 121.

BROKE: More Americans Are Getting Their Electricity Cut Off

More than 900,000 homes went dark in Texas last summer because of unpaid bills, almost triple the number 10 years ago. In California last year, it was 714,000, the most on record. The tally across the country is in the millions, a sign of the economic stress that lingers after the Great Recession.

Utilities are disconnecting more households as President Donald Trump moved to end $3.4 billion in federal energy-bill help for the poorest Americans. Congress voted to reinstate the funding, but the administration has yet to release the money.

“It’s indicative of an economy that’s still recovering,” said Katrina Metzler, executive director of the National Energy and Utility Affordability Coalition in Washington. “Underemployment is still common, and many families live paycheck to paycheck.”

Most customers aren’t denied electricity for long. Utilities commonly work out payment plans or help customers get financial aid within a few days. About 10 percent to 15 percent of people who are disconnected never get reconnected, according to the Utility Reform Network, a San Francisco-based consumer group also known as TURN.

While the U.S. jobless rate fell to a 16-year low of 4.2 percent last month — compared with 10 percent in 2009 — many Americans are struggling. Forty-four percent of adults told the Federal Reserve Board of Governors last year that they wouldn’t be able to covera surprise $400 expense or would have to sell something or borrow to raise the money.

The Trump administration’s 2018 fiscal-year budget scrapped the Low Income Home Energy Assistance Program, or LIHEAP, because it’s “no longer a necessity” and subject to fraud. Mick Mulvaney, director of the U.S. Office of Management and Budget, testified to Congress in May that 11,000 dead people were used as applicants to receive the LIHEAP benefit, a statistic cited in a 2010 General Accounting Office report. About 2.9 million households were disconnected for nonpayment last year in the 18 states surveyed by TURN, the San Francisco group.

First Administration

“The House and Senate have rejected virtually the entire administration’s Health and Human Services budget,” said Mark Wolfe, executive director of the Washington-based National Energy Assistance Directors’ Association. “This is the first administration we’ve had in a long time, however, that’s said, ‘We don’t think this program should exist.”’

Asked why Congress reinstated the funding, Wolfe said: “Grandmothers.”

Kelly A. Love, a White House spokeswoman, referred questions about LIHEAP to Coalter Baker, a spokesman for the budget office, who didn’t comment beyond Mulvaney’s testimony to Congress.

Not all states track electricity shut-offs, but in those that do, numbers are rising. Ohio utilities cut off more than 314,000 customers in the 12 months ended in May 2016, an 84 percent increase from 10 years ago. In Pennsylvania, electricity terminations doubled in 2008 and have risen since. The state tallied 220,000 in 2015.

The federal assistance program reaches only 19 percent of eligible households, according to a July letter from 14 state attorneys general urging more LIHEAP funding.

The average price for residential power rose 18 percent from 2007 to 2016, according to the Energy Department.

Evict Tenants

Electricity isn’t only about being able to watch TV, keep ice cream frozen or charge a phone. Without power, landlords in some jurisdictions can evict tenants, and social-service agencies can take away a family’s children, according to Josie Pickens, an attorney for Community Legal Services in Philadelphia.

A California law enacted last month curbs utility shut-offs to homes with anyone under hospice care or dependent on home life-support equipment. It requires the state’s utility regulator to assess the effect on disconnections when setting customer rates.

In August, New York’s utility regulator slapped new rules on its biggest utility, Consolidated Edison Inc., saying it had “insufficiently informed customers” of their rights before seizing meters for unpaid bills.

Shut-offs are often a hassle for U.S. power companies. Uncollectibles surged 60 percent to $1.53 billion during the recession and have remained above roughly $1.3 billion since, according to data provided by Edison Electric Institute, an industry trade group. That money is either billed to other customers or covered by shareholders.

Stressed electricity users may pay their power bills last. Research by California power companies suggests some wait until shut-off so they can qualify for one-time $1,300 assistance, according to Marzia Zafar, director of the policy and planning division for the state’s public utilities commission.

Pacific Gas & Electric, a unit of San Francisco-based PG&E Corp., said it helped customers receive $30 million in LIHEAP assistance last year and reconnected 80 percent of customers who were cut off.

“We want to make every effort possible to avoid these disconnections,” said Dan Cutler, a spokesman for the utility. “It’s better for us to have customers.”

Global Markets Will Revert Back to Local Markets and Those Prepared for These Changes will Survive the Initial Collapse and Thrive in the Aftermath

The prosperity we once knew as a nation was made possible because of cheap oil. When the EROI, Energy Returned On Invested, was at 30/1 we had unprecedented prosperity. The EROI is now falling below 10/1 and is taking prosperity with it. The EROI is the amount of energy we expend to get energy, in this case oil, out of the ground. We are getting 10 units of energy for every unit we expend to get it. Shale oil production results in 5 units of energy for every unit we expend.

This matters because everything we use depends on cheap energy to maintain the status quo. An EROI of 10/1 is necessary to maintain our current standard of living. The Hills Group project oil will drop to $11.76 by 2020. This may sound good on the surface but cheap oil will not mean much if you have no job and no money to buy it. As the next depression sets in many more people will lose their job and as a result prices will collapse. They project by 2020 we will have 75% fewer gas stations as a result of collapsing oil.

Today most of our population lives in the city. When jobs see their final collapse those people will have no way to survive. Living in the city requires stuff being brought in from other places. Those living in the city must pay for this stuff with the pay they earn. No jobs mean no pay and no goods.

During the last great depression many city dwellers had family in the country to move back in with to stay fed but most city dwellers today are several generations removed from the country life and no longer have living family members in the country to move in with.

Many of the farms that were left to city dwelling children after the parents died were sold and the money either spent or put into paper assets for retirement. When those paper assets evaporate those people will have nothing to fall back on.

An alarming piece of info has just reached my ears, and you need to know about this too. Countless lives have been lost because people have been kept in the dark about this

Even SWAT Teams are Helpless Against This… Click on the Video below to find out more information!

I have said before that when this next depression hits it will devastate everyone and the only way people will be able to get by is if they produce most of their basic goods themselves. This will require a small farm and a family to help run it.

The U.S labor department has reported that productivity has declined for the third straight quarter. The real hourly wage increase reported in the first quarter at 4.2% has been revised to a decrease of .4%. GDP growth annualized for the first two quarters is 1%. S&P 500 companies are reporting declining earnings for the fifth quarter in a row. Economic growth is at its weakest rate since 1949. Gold is up 25% this year so far. All of these metrics are indicative of a stagnant or declining economy at a time when we are told everything is doing great.

The massive amount of money being printed is the only thing holding the economy in place right now but we are now moving beyond the point where that is even effective. From here on out more money will only cause more damage and it will compound the effects when the economy finally fails in earnest. Those that do not see this train wreck coming will still be sitting calmly as everything falls apart around them. They will be lucky to survive the impact and will be totally helpless in the days following. Those that see the danger will have gotten off a long way back and will be in a better position to help themselves and their family.

It is good to help others but you can only do so after you have taken steps to help yourself. The carnage we are about to see in world markets will affect everyone in some way. The best way to help is to understand what is coming and be prepared to deal with the realities that will follow. Global markets will revert back to local markets and those prepared for these changes will survive the initial collapse and thrive in the aftermath.

If everything goes well, you won’t ever need these skills, but even if you don’t venture into the woods on camping trips, the chance of a disaster in your city or being stranded on a road trip is always a possibility. With the above survival techniques you can get yourself safely out of any number of situations.

If you’re ready to work hard, if you are interested to improve your Survival knowledge almost immediately, WATCH THIS VIDEO and you will find many interesting things!

Tesla fired hundreds of employees in past week

© Reuters. A Tesla charging station is seen in Salt Lake City

Luxury electric vehicle maker Tesla Inc (O:TSLA) fired about 400 employees this week, including associates, team leaders and supervisors, a former employee told Reuters on Friday.

The dismissals were a result of a company-wide annual review, Tesla said in an emailed statement, without confirming the number of employees leaving the company.

“It’s about 400 people ranging from associates to team leaders to supervisors. We don’t know how high up it went,” said the former employee, who worked on the assembly line and did not want to be identified.

Though Tesla cited performance as the reason for the firings, the source told Reuters he was fired in spite of never having been given a bad review.

The Palo Alto, California-based company said earlier in the month that “production bottlenecks” had left Tesla behind its planned ramp-up for the new Model 3 mass-market sedan.

The company delivered 220 Model 3 sedans and produced 260 during the third quarter. In July, it began production of the Model 3, which starts at $35,000 – half the starting price of the Model S.

Mercury News had earlier reported about the firing of hundreds of employees by Tesla in the past week.

Bitcoin now bigger than Bayer, Goldman Sachs & Nike

Bitcoin now bigger than Bayer, Goldman Sachs & Nike

The value of the world’s largest cryptocurrency bitcoin has broken the $5,800 mark, hitting another all-time high before retreating to the $5,600-$5,700 level, still close to the maximum.

Its market capitalization is approaching $97 billion. If bitcoin were a company, its market cap puts it in the same league as some of the world’s biggest corporations.

The cryptocurrency would be in 77th in PwC’s list of the top 100 corporations, bigger than Bayer, Goldman Sachs, UPS, Nike, and Mitsubishi.

Bitcoin is up over 480 percent year-to-date.

The reason behind the rally is talk China may reverse the ban it imposed on cryptocurrency exchanges last month. The Chinese central bank also declared initial coin offerings (ICOs) illegal and banned fundraising through ICOs.

After the Chinese ban, the Japanese yen consolidated the global trade volume, with 57 percent of bitcoin’s fiat exchange volume. The US dollar and South Korean won follow.

Some investors say bitcoin bulls could test a new ceiling of $6,500. They are also buoyant that banking giant Goldman Sachs is likely to start trading bitcoin.

Mike Novogratz, Galaxy Investment Partners, recently told CNBC that bitcoin can hit the $10,000 mark soon, but with a warning.

“Remember, bubbles happen around things that fundamentally change the way we live,” he said.

“The railroad bubble. Railroads really fundamentally changed the way we lived. The internet bubble changed the way we live. When I look forward five, 10 years, the possibilities really get your animal spirits going.”

Bitcoin is likely to become “the biggest bubble of our time,” he added.