On The Trail Of The Faberge Collection
by Byron King
Febrauray 10, 2004 ---------------------------------------------------------------------------------------------------------------------- "…capital is being accumulated at a huge rate in formerly socialist Russia, we are told, and by one of the principal accumulators no less. Portable assets, including Faberge Imperial Easter Eggs acquired over many decades, now flow at a single stroke of the pen from weak hands to strong ones. This is a glimpse of the future of an indebted nation…." ---------------------------------------------------------------------------------------------------------------------- Last week, a Russian industrialist named Viktor Vekselberg arranged to purchase the entire Faberge collection that was accumulated over many decades by the late Malcolm Forbes. The Faberge collection was recently put on the auction block by members of the Forbes family. The collection includes nine Imperial Easter Eggs, created by the House of Faberge in the late 19th and early 20th centuries on commission from Russia's Czars, and about 180 other Russian-related Faberge pieces. Mr. Vekselberg's purchase price was in excess of $90 million in a transaction arranged through Sotheby's and in lieu of public auction. Mr. Vekselberg intends to return the Faberge eggs and other items to Russia before 11 April, which is Easter this year according to both the Russian Orthodox and Western Christian holy calendars. The new owner plans to exhibit the historic pieces in the city of Yekaterinburg, where members of the Romanov dynasty were executed by the Bolsheviks in 1918. According to Mr. Vekselberg, as quoted in the N.Y. Times, 'Right now in Russia, capital is being accumulated at a huge rate and there is a question of how to use private property.' Mr. Vekselberg, apparently, has no 'question' in his mind as to how to use at least some of his accumulating fortune, the fruits of his efforts in the Russian aluminum and oil industries. 'I consider it my duty to do this,' he told the Times, referring to his purchase of the Faberge treasures and his intent to return them to Russia. Thus do the Czars' Faberge eggs travel full circle. Sold off to foreign interests by the Communists and what few members of the Romanov dynasty who survived, these articles are now returning home, courtesy of a contemporary Russian tycoon. This process also reflects key issues of life under the United States "Dollar-Standard." Since August 15, 1971, when President Richard Nixon commenced America's modern monetary experiment with a purely fiat currency, debt levels at every level of the U.S. economy -- federal, state, local, business and consumer -- have skyrocketed to fund aggregate national consumption. By "closing the gold window" that summer evening long ago, Mr. Nixon facilitated the ability of the U.S. economy to gain unfettered access to the world's resources, goods and services. But Mr. Nixon, whether he understood it or not, was making a Faustian bargain with the Gods of Money that, in essence, enabled subsequent decades of economic and moral decline of the West in general and of the U.S. in particular. All faithful Daily Reckoneers know and understand that capital is being destroyed steadily in the 'capitalist' U.S. The U.S. dollar, once the very definition of a sound and stable currency, has steadily declined in value over time, as this 'managed' world-reserve currency was mis-managed by the Federal Reserve, the latter responding as a matter of course to the requirements of media-driven and populist politics. The U.S. economy appears to be liquid and growing by the fuzzy math and self-serving criteria of today's political-monetary logic. But the U.S. economy has for decades been reaching out overseas, and buying and importing an increasing share of its vaunted standard of living. First, the U.S. exported dollars for oil; then for oil and autos; then for oil, autos and electronics; now oil, autos, electronics and whatever is on sale at WalMart. And when the U.S. government needs cash to pay its day-to-day operating expenses, it exports Treasury Bonds and imports dollars, thus perpetuating the cycle. Through it all, the U.S. economy has been starving for capital while drowning in debt. The tipping point, at least the point at which the public has taken notice, seems to have come in the wake of the credit bubble of the late 1990s and early 2000s. For reasons that were years in the making, the U.S. economy has lost almost 3 million manufacturing jobs since July, 2000, or more than 15 percent of the factory work force. Debt-financed aggregate consumption has left the U.S. as the greatest debtor-nation in all of history. It is like an Atkins-diet in reverse, all sugar and no protein. But capital is being accumulated at a huge rate in formerly socialist Russia, we are told, and by one of the principal accumulators no less. Portable assets, including Faberge Imperial Easter Eggs acquired over many decades, now flow at a single stroke of the pen from weak hands to strong ones. This is a glimpse of the future of an indebted nation. And a final point: these are Easter eggs returning to Russia, not May Day eggs or Glorious October Revolution eggs. In addition to capital, it appears that Christian faith is accumulating in Russia. One wonders if the two go hand in hand? | 
