By Alex Krainer

(Video report & 3-part article) With escalating tensions between Russia and the west, we keep hearing about Munich and about Appeasement that led to World War II. But the truth of those events has remained widely misunderstood. As one meme going around in the social media says, “If the news are fake, imagine how bad history is!” To avoid sleepwalking into another great war, it is essential that we understand what really happened in 1938. Prepare, it is nothing like they taught us in school.

The war drums between Russia and the west have been beating ever louder. Here’s just the past few weeks’ news:

On Friday, 12 November 2021 Polish defense minister Mariusz Blasczak announced that the UK deployed a squad of British soldiers to Poland where they would help repair and fortify border fences that were breached by Middle Eastern migrants and provide reconnaissance and monitoring activities.
The very same day, two US Congressmen have urged President Joe Biden to provide advanced weapons to Ukraine and “deploy a U.S. military presence in the Black Sea.”
Only two days later the outgoing head of the UK Chief of Defence Staff, General Sir Nick Carter stated that the UK military would have to be ready for war with Russia.
Then the UK announced that the British military would enhance its permanent presence of troops and tanks in Germany to face “the Russian threat.” Hundreds of vehicles including tanks and drones will be deployed to Germany.
More troops and some 250 military vehicles could be deployed to Estonia, where the UK has led a 1,000-strong battle group on a mission to deter Russian aggression.

Many war hawks in the west have sought to escalate the rhetoric by drawing parallels with the events of 1938. Referring to Vladimir Putin, US Congressman Adam Kinzinger (RINO-IL) said: “We can retreat from the Sudetenland and hope he doesn’t intend to rebuild all the Soviet Union.” The not so subtle insinuation was that today Ukraine is Sudetenland, that Vladimir Putin is Hitler and that the West must confront him decisively and with force if necessary. The analogy is completely off mark, but since it is now being thrown about casually, we should be clear about exactly what happened in the late 1930s.

1939: the last time Britain helped Poland’s security

Today’s tensions have followed years of deteriorating relations between Russia and the Western powers, but it was the deployment of British troops to Poland and Germany that invoked the most disconcerting parallels with the events leading to World War II. What we are about to explore is largely based on Carroll Quigley’s “Tragedy and Hope,” published in 1966, one of the most important history books ever published as it reveals the hidden powers that have shaped the history of the world between 1895 and 1965. Tragedy and Hope is perhaps best exemplified by the passage that is today quoted quite frequently:

“The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. … The growth of financial capitalism made possible a centralization of world economic control and use of this power for the direct benefit of financiers and direct injury of all other economic groups.”

In its 1311 pages, professor Quigley meticulously traces historical events that abundantly corroborate that alarming assertion.

Today we’ll look at the real history before and after the 1938 appeasement. As we do so, please keep in mind that in the 1930s, Britain was the dominant power in world diplomacy, exerting disproportionate policy influence in Europe and much of the world. It controlled the maritime trade routes and the flow of capital through London which reigned supreme as the world’s financial capital. Nearly all governments in Europe conducted foreign policy in consultations with London and as Quigley wrote, “in general, the key to everything was the position of Britain.” Because Poland could today become one of the key geopolitical flashpoints, we’ll begin our story with Britain’s 1939 guarantee of Poland, and then work back to the 1938 Munich Agreement which resulted from Britain’s policy of Appeasement.

Following the destruction of Czechoslovakia in September 1938, Germany turned its attention to Poland. At first, it was just diplomacy: the talks with Poland kicked off on 21 October 1938. As expected, German representatives asked the Polish government for the city of Danzig and a kilometer-wide strip across the Polish Corridor to accommodate a highway and four-track railroad under German sovereignty. These were deemed moderate requests and they were made to the Polish ally in a relatively cordial atmosphere. The territories in question were parts of Germany that she’d lost by Versailles treaty after the World War I, so German demands didn’t seem outrageous. At that time Hitler did not intend to overrun Poland, but rather to engage her in the forthcoming onslaught against Russia. If his demands were granted, Germany was prepared to reciprocate with certain concessions to Poland. However, the Polish government did not yield to German demands.

A few months later, on 21 March 1939, Hitler reiterated his demands, this time more forcefully. When the news of this reached London, UK’s Prime Minister Neville Chamberlain suddenly and unilaterally issued a strangely worded security guarantee for Poland:

“Certain consultations are now proceeding with other governments. In order to make perfectly clear the position of His Majesty’s Government in the meantime, before those consultations are concluded, I now have to inform the House [of Commons] that during that period, in the event of any action which clearly threatened Polish independence and which the Polish Government accordingly considered it vital to resist with their national forces, His Majesty’s Government would feel themselves bound at once to lend the Polish Government all support in their power.”

This was the first time Britain made such a commitment to another nation since 1918. Not only did the British government commit to guarantee a foreign nation, it also gave that nation the privilege to decide when the guarantee would take effect, while asking for nothing in return. Importantly, the British only guaranteed Poland’s independence, not its territorial integrity. In that, they left the door wide open for Germany to continue pressuring Poland for territorial concessions.

Britain’s betrayal of Poland

Britain’s guarantee emboldened the Polish leadership to harden their stance vis-à-vis Germany in the mistaken belief that Britain and France would have unleashed a full-scale offensive against Germany if Hitler decided to strike at Poland.” Unaware of the British guarantee at first, Hitler was surprised by Poland’s sudden defiance. But if the intention of the British guarantee was to deter Germany, its effect was exactly the opposite. When Hitler did learn about it, he immediately decided to attack Poland. During a secret conference with his generals on 23 May 1939, Hitler said that, “The Polish problem is inseparable from the conflict with the West. … Poland sees danger in a German victory in the West and will attempt to rob us of a victory there. There is, therefore, no question of sparing Poland, and we are left with the decision: to attack Poland at the first suitable opportunity.” The plan was to launch the attack before September 1939.

But beyond the verbal guarantee, Britain did next to nothing to ensure Poland’s security: it made no real effort to build up a defense front with Poland and no military arrangements were made as to how Britain and Poland would cooperate in a war. Britain’s efforts to rearm Poland were delivered late, in inadequate amounts and in an unworkable form. At the same time, it continued to provide very substantial support to Germany.

In May 1939 when Chamberlain issued his guarantee, there was talk about a £100 million loan to Poland, but the British stalled and delayed, delivering far too little and far too late: Poland finally obtained a small credit of $8,163,300 only one month before the German invasion. At the same time, as Quigley writes, “all London was buzzing about a secret loan of £1,000,000,000 from Britain to Germany,” more than a hundred times the meager credit extended to Poland. The rumors were in fact corroborated by Hitler himself. Speaking of these events in August 1942, he said:

“Schacht had told me that we had at our disposal a credit of fifteen hundred million marks abroad, and it was on this basis that I planned my Four Year Plan, which never caused me the slightest anxiety… And this is how things are today, and we never find ourselves blocked for money.”

The Schacht thatHitler was referring to was his then Economy Minister, Hjalmar Schacht, former Wall Street banker, head of the Reichsbank and a very close associate of Bank of England’s chief Montagu Norman.

Far from discouraging German aggression, British actions only bolstered Hitler in his determination. During a secret conference with his generals held on 22 August 1939, Hitler said:

“The following is characteristic of England. Poland wanted a loan from England for rearmament. England, however, gave only a credit to make sure that Poland buys in England, although England cannot deliver. This means that England does not really want to support Poland.”

Indeed, Hitler was right: Britain only signed a formal alliance with Poland on 25 August 1939, the very day when Hitler ordered the invasion of Poland and far too late to change the course of events. At a time when the British public opinion was deeply opposed to Nazi Germany, that move was intended more to assuage the British public than to provide any meaningful support to Poland. But the fact that Britain did have the influence to change the course of events became apparent: upon learning of the British-Polish alliance, the stubborn, unstoppable Hitler immediately reversed his orders to invade Poland, (only a few hours after he had issued them). However, the pause wasn’t used to sue for peace and the invasion went ahead after only a week’s delay on September 1, 1939.

All these events beg the question: why did Britain so consistently miss every chance to preserve peace on the continent and restrain Hitler? Why did the British and American corporations and bankers provide such abundant support to Nazi Germany even when it was abundantly clear that most of this support was being used for rearmament? We can glean the answers to these questions in the wider agenda behind their geopolitics.

The greater agenda: a three-bloc word

Keeping up the appearance of trying to restrain Hitler while covertly aiding and abetting him was the hallmark of British secret diplomacy through much of the 1930s. The covert support for Hitler was in fact a part of the larger, “three-bloc-world” agenda. After the Munich conference in September 1938, Lord Halifax who was one of the main players in British foreign policy revealed how the ruling establishment envisioned those three blocks::

“Germany [as] the dominant power on the continent with predominant rights in southeastern Europe,”
Britain dominating Euro-Atlantic west in alliance with the United States, and
Securing Far-Eastern dominions in alliance with Japan.

Britain’s seven-point policy toward Germany

In this vision of a new global order, Germany would be built up and supported not only as a dominating power in Central and Eastern Europe, but also as a bludgeon to wield against Russia. With that objective in mind, the British foreign policy establishment had formulated a seven-point policy toward Germany which was communicated to German officials by various spokesmen from 1937 onward:

Hitler’s Germany was the front-line bulwark against the spread of Communism in Europe
A four-Power pact of Britain, France, Italy, and Germany to prevent all Russian influence in Europe was the ultimate objective; accordingly, Britain had no desire to weaken the Rome-Berlin Axis
Britain had no objection to German acquisition of Austria, Czechoslovakia and Danzig.
Germany must not use force to achieve its aims in Europe as this could precipitate a war in which Britain would have to intervene because of the pressure of public opinion in Britain and the French system of alliances; with patience, Germany could get its aims without using force.
Britain wanted an agreement with Germany restricting the numbers and the use of bombing planes
Britain was prepared – conditionally – to give Germany colonial areas in south-central Africa, including the Belgian Congo and Portuguese Angola.
Britain would use pressure on Czechoslovakia and Poland to negotiate with Germany and to be conciliatory to Germany’s desires.

After the Munich crisis and dismemberment of Czechoslovakia, an eighth point was added to the program, which entailed economic support for Germany. Thus, British support for Germany’s annexation of Austria, destruction of Czechoslovakia and invasion of Poland were the result of a covert policy that deliberately created a monster in the heart of Europe. However, the true story about the sacrifice of Czechoslovakia to this monster suggests that Britain’s secret diplomacy not only supported Hitler, but actually directed the events from behind the curtains.

In Part 2 we’ll look at the shameful role of British secret diplomacy that led up to the partition of Czechoslovakia and the 1938 Munich Agreement.

Alex Krainer – @NakedHedgie is a former hedge fund manager, founder of KRAINER ANALYTICS and publisher of the daily TrendCompass reports. I-System TrendCompass provides daily CTA signals on over 200 financial and commodities markets so you can navigate trends profitably, with confidence and peace of mind. Subscription rates start at below 85 Eur/month (1,000 Eur/yr) and one-month test drive is always free of charge. To learn more, please visit TrendCompass page or drop us an e-mail at TrendCompass@ISystem-TF.com. For qualified investors, we can also propose superbly engineered turn-key portfolio solutions, including a high-octane inflation hedging portfolios.

Alex runs the Naked Hedgie website which is where this article was first published.