Economic terrorism - the Nazi plot to ruin the Bank of England

By Murray Bourne, 29 Nov 2006

There was a Nazi plot to bring down the Bank of England in the latter years of WWII by counterfeiting massive amounts of British pound notes. Their idea was to drop the notes over England and rely on the basic greed of people (the dishonest ones would not admit they picked up the notes from the street). Such an influx of printed money would cause immense inflation and ruin the British economy (ala Friedman's economic theories).

The review on Amazon says:

At the height of the operation, headed by SS officer Bernhard Krueger, the Jewish prisoners produced 650,000 notes a month. The counterfeiting helped finance some Nazi spy efforts, as well as other parts of the Reich's war machine, but it failed to bring down the Allies.

Apparently some shady character convinced Krueger to spend the ill-gotten pounds on the German war effort, rather than bring down the allied economies. So some of the perpetrators became incredibly rich, laundering all these notes through neutral countries and German embassies around the world.

The really interesting part of the story is the fate of the Jewish prisoners that were forced to work on this project in complete secrecy. They were chosen for their artistic and printing skills. The Nazis even found a convicted forger and roped him into the job. If any of the prisoners fell sick, they would be taken out and shot because the Nazis could not afford to let anyone leak the story. But overall, their conditions were better than those in other parts of the concentration camp.

Krueger looked after these prisoners and saved them on a few occasions from being killed.

The operation moved to Austria in the closing days of the war and the counterfeiters were eventually freed by the Americans.

I can't help thinking about how vulnerable the $US is right now. I'm sure there are many plots against it in existence, including a cyber-attack (see my review of Black Ice).

See the 2 Comments below.

2 Comments on “Economic terrorism - the Nazi plot to ruin the Bank of England”

  1. P N says:

    Good thing perhaps that the currency was used for international purchases. This meant the existence of the forged notes was harder to detect and prevent. Just dropping them over England would have meant a localised incident, rapidly followed by public announcements and changes to the local currency, or foreign exchange procedures, or both, to differentiate and otherwise protect the pound from the forgeries. But in any event in a modern economy where most money is just figures on a computer rather than hard cash, forging paper currency won't bring down an economy. Fake USD from North Korea have been circulating around the world for years; don't see the US or others panicking (though I'd hesitate to accept any USD100 note if I was offered one anywhere, including inside the US). Now, hacking into certain computer systems might bring a different result.

  2. Tony says:

    its not a Nazi plot to ruin the Bank of England its called the gobal economy

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