Fog of War: Intransparency as a Financial Stability Tool

In a 1934 interview with the New York Times, Joseph Stalin reported that the USSR’s gold production in 1933 was 80 million tons (Osokina 2021). In the late 1980s unclassified archival documents revealed that the production was in fact 50 million. Most of the difference of 30 million tons was confiscated from USSR citizens that year, not produced. However, foreign officials and investors had few data sources, and for many years they used this number as a starting point to estimate the current stock of gold in the USSR. When this and other secrets were revealed, the bankruptcy of the USSR became evident.