I just saw an interview with Tim Roth who appears in the new Peaky Blinders movie as Beckett, an East London fascist. The movie launches tomorrow on Netflix and focuses upon the Nazi plan in the Second World War to flood Britain with fake currency to bring down the eceonomy.
Codenamed Operation Bernhard, the goal was to drop massive amounts of counterfeit Bank of England notes over the country and, consequently, the country would collapse.
The key here is that link between currency, country, government and collapse.
The initial plan was proposed in 1939 by Arthur Nebe and supported by Reinhard Heydrich, with the idea to forge an estimated £30 billion in British bank notes and air-drop them. The result would be hyperinflation and economic collapse.
Unfortunately for the Germans they lacked sufficient planes in the Luftwaffe to distribute the notes, so this strategy was put on hold. But then, in 1942, the idea was revived and SS Major Bernhard Krüger ordered a team of 142 Jewish prisoners with skills in engraving, printing, and banking to be dedicated to the task at the Sachsenhausen concentration camp. They were forced to produce the forgeries under the supervision of Krüger which were of exceptionally high quality.
In fact, Bank of England clerks described them as “the most dangerous ever seen”.
The team painstakingly duplicated the rag paper, printing plates, watermarks, and security features. The operation continued for almost three years which, by early 1945, meant that the Jewish prisoners had produced something between £132.6 million to £300 million in counterfeit notes, primarily in £5, £10, £20, and £50 denominations.
The only spanner in the works was that British intelligence was made aware of the plot from a spy in 1939. Specifically, the fraudulent notes were spotted when an eagle-eyed bank teller saw a duplicate serial number on a note in Morocco.
That was lucky.
While the plan did not cause the collapse of the British economy, as the Germans initially hoped, enough notes entered circulation in Europe that confidence in the pound abroad was undermined by the end of the war. After the war, the Bank of England was forced to withdraw all notes above £5 and issue a completely new, more complex currency design to combat the fakes.
Then, when the war ended, the Nazis dumped much of the remaining currency and printing equipment into Lake Toplitz in Austria. Some of these materials were recovered in later diving expeditions and can be found in museums today, such as the Bank of England Museum and the International Spy Museum. The story was dramatised in the 2007 Oscar-winning film The Counterfeiters, and is brought to life again in the new Peaky Blinders movie. Worth a watch.
Meanwhile, I just find it fascinating how money can be weaponised, and we still that today between sanctions and being thrown of SWIFT if you are Russian or Iranian, but then moving everything into crypto ... nothing much changes.
Meanwhile, if you want a taster of the new movie, click here:
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...