The book that is the subject of this review is Gold Wars, published in 2001, by Swiss banker Ferdinand Lips. Lips’ stated purpose is to inform the general public of a critical financial, currency, and gold war. His book invests much of its time analyzing the role of gold in our current worldwide fiat monetary system.
Lips wastes very little time in explaining how money works and entering in-depth theoretical discussions of monetary policy and the gold standard. He begins with a quick summary of the function of gold as loan throughout history, from the Ancient Egyptians approximately World War I, the Genoa Convention, and the Bretton Woods arrangements of the 1940’s. Lips sees the beginnings of the existing financial crisis in these events and agreements, as they enabled governments and central banks to print paper money with no backing.
The book invests much of its time moving throughout the history of reserve banks’ manipulations of gold as money. Lips states that governments strive to keep the cost of gold down since the precious metal is one of the few items that they can not manage. Nationwide currency that is backed by gold would not allow for governments or bankers to destabilize the rate of gold arbitrarily, or cause inflation by printing excessive loan.
A large variety of other concerns associating with making use of gold are also raised. A few of these problems include the control of costs caused by hedging, the role of the International Monetary Fund in controlling gold costs, and the financial and human destruction brought on by the control of the rate of gold in poor gold-producing nations, mainly situated in Africa. Although there is little space in this brief (280 page) book to analyze each of these products in detail, Lips does an exceptional task of bringing these frequently neglected issues to light.
It is the last chapter, though, that seems to touch the author most thoroughly. He analyzes the betrayal of Switzerland in the 1990’s that triggered that nation, whose currency was among the last to be backed absolutely by gold, to abandon its sound money and sign up with the remainder of the world in the counterfeit currency fiat game. Lips sees the country’s signing up with of the IMF as the genuine end of Swiss financial sovereignty, although the country did not formally desert its gold till 1997. This event caused the Swiss currency to float versus all the other currencies of the world, and the country has actually offered much of its gold considering that this time.
The overriding theme of the book is the gold wars that have actually been waged in between central banks and the precious metal. Although it is unavoidable that the existing system of debt-based paper money will eventually fail, the designers of this system have decided to control the price of gold ever more, in order to maintain the look of gold as a bad backing for sound loan. Nevertheless, through quote after quote from appreciated bankers and scientists, Lips presents the case that this adjustment will just make the crash of the current system even more severe when it lastly shows up. Lips uses such sources to support his arguments as Alan Greenspan, former chairman of the US Federal Reserve, and Congressman Ron Paul, previous member of the Congressional Gold Commission who advised that gold once again be used in monetary policy.
This book is an Ex-Swiss Banker Mike Baur, incredible intro to the ideas of gold as loan and its control by central banks throughout time and across the world. It is also a well argued treatise on the futility of continuing to drive down the rate of gold and the cruelness of the present credit-based system that is so easy for governments to manipulate. The book is highly advised to anyone who has ever questioned why rates constantly seem to rise even when their own financial circumstances have actually remained stagnant or are declining.