Germany, World War II And The Role Of Gold

Countries engaged in wars need money to finance their operations. During world war I and II the country with the best artillery and manpower had the upper hand. During those wars, gold was a valued monetary asset and if you had the gold you had the power to do almost anything. There are a lot of stories that have been doing the rounds about Nazi gold and how countries like the UK for instance, fought hard to prevent the Nazis from gaining access to their gold. The Nazis had pretty much looted and plundered every European Country taking gold to add to their growing hoard. The UK ended up evacuating tons of its gold to Canada for safe keeping. This operation was codenamed “Operation Fish” and is the biggest movement of physical gold in history.


Many people have asked why Adolf Hitler was so interested in amassing gold. Germany in the1920s was in dire financial straits. It faced hyperinflation and people were really struggling. When Hitler came in as the Reich Chancellor in 1933 set about remilitarizing the country. Germany is not a country that has a lot of resources, except for coal. All that was needed to manufacture arms, tanks and warships like Aluminium, iron and zinc would have to be imported. At the same time Germany was in a depression. When he was inaugurated, Hitler vowed that he would reorganize the nation’s economy.


Hitler’s government started with unemployment by launching great public works projects like the autobahn, the railroad, more housing and other projects that kept people employed. This worked as four years later, unemployment stopped being a thing. However, Hitler had grand plans and felt that the Treaty of Versailles stripped Germany of its dignity. He took a hard stance towards rearmament. The problem was the country’s lack of natural resources. The fact that the Deutsch mark was virtually worthless elsewhere made it hard for Hitler to finance its rearmament? The only way to pay for Iron ore from Sweden, Chromium from Turkey, Spain’s manganese, tungsten from Portugal and oil from Romania was with a currency that was accepted everywhere and that was gold. However, in 1933, Germany’s official gold holdings stood at $109 million which was not enough to finance the military force that Hitler wanted to build.


This is why Germany went on a looting spree in Europe beginning with Austria in 1938. The 100 metric tons of gold looted from Austria gave the Germans the boost it needed. Austria might have been the first, but Germany unashamedly plundered the vaults of countries like Poland, Holland, Belgium and the Netherlands. This grand theft was not limited only to gold, Germany made off with millions worth of silver, diamonds, artwork and other assets.


As Hitler went through Europe pilfering and plundering, some European countries had the foresight to secure their own reserves and stop them from ending up in Hitler’s hands. In July 1940 as the Nazi invasion grew closer, the U.K. shipped 1,500 tons of gold worth $160 billion across the Atlantic to be safely stored in the Canadian Central Bank.


This was a bold move. Transporting that amount of gold by ship across U-boat infested waterd was a huge risk. History was also against such a move as 43 tons of gold being shipped on the SS Laurentic were lost at sea when it was sunk by a German U-boat off the coast of Ireland. Losing gold would have been a major blow as that gold was crucial in financing the war. Britain’s gamble was successful and every last ingot made it safe into Canada and away from the hands of the Nazis.


Hitler may have been despicable, but his need for gold reflects how important the yellow metal has been revered for centuries and accepted as a trusted currency. This is something that Germany has always remembered even to this day. Germany has been amassing gold post Hitler. The current gold holding in Germany stands at 3, 372 tons which is more than what most companies have. It is second to the US in terms of gold holdings, making it a powerful and stable economy in the world.


Germany along with China, India and Russia have emerged as one of the largest gold investors. Germany is always buying more gold. The country has ploughed more money into buying gold bars, coins as well as exchange-traded commodities (ETCs).