By Patrick A. Heller
Commentary on Precious Metals Prepared for CoinWeek.com
Last Sunday, a new study was released. Titled “Dr. Zijlstra’s Final Settlement: Gold as the Monetary Cosmos’ Sun,” it was written by Dutch economist Jaco Schipper who writes at www.MarketUpdate.nl.
Jelle Zijlstra served as the Dutch Minister of Economic Affairs from 1952 to 1959. He was the Finance Minister from 1958-1963. He served as Senator from 1963-1966. In 1966 he became Prime Minister and again served as Finance Minister. He resigned both positions in 1967 to become head of the Dutch central bank, a position he held until the beginning of 1982. Perhaps most significant, Zijlstra also served as Chairman of the Board and as President of the Bank for International Settlements from July 1967 until January 1982.
Zijlstra wrote two memoirs. The first, titled “Dr. Zijlstra” discussed his time as a central banker. He recounted a story on page 191 where US Assistant Treasurer Paul Volcker and a member of the Federal Reserve Board flew to meet with him in July 1971. The Dutch central bank had converted $600 million in US currency into gold thus far that year, and the Americans were trying to persuade him to cease such activity.
During the meeting, Volcker told Zijlstra, “You are rocking the boat.” To this, Zijlstra replied, “If the boat is rocking because we present $250 million for conversion into gold or something that can be considered an equal asset, then the boat has already perished.” The Dutch then redeemed this final tranche of US currency.
President Nixon terminated further currency for gold redemptions less than a month later.
Zijlstra’s second memoir was titled “Per Slot Van Rekening” which can be roughly translated as “The Final Settlement.” It goes into further detail about his activities as a central banker and how the US government worked with other central banks to suppress gold prices.
On page 222 the author specifically attributes the creation of Special Drawing Rights as an attempt to manage international monetary systems because the price of gold was too low. The most important point of the memoir is that Zijlstra considered gold to be the only currency that was suitable as the center of the “monetary cosmos.”
Now that the US government’s attempts to suppress gold prices have been further confirmed—this time by someone with global inside information, those who continue to claim this is not true have even less of a leg to stand on.
The ramifications of both of these developments are almost certain to support higher gold and silver prices in the coming weeks.
Patrick A. Heller owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Numismaster (http://www.numismaster.com under “News & Articles). His award-winning radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.