Breaker Morant is one of my favourite films. I probably re-watch it about once a year and I’ve shown it to my older, now adult children.

An Australian production, it won awards from Down Under for its excellent dramatisation of what was arguably the most awkward episode in the sometimes-difficult relationship between that former colony and its British masters during the imperial era.

Gallipoli was a disaster and cost many more lives. But the story of the notorious British military tribunal that found three Australians guilty of war crimes during the prolonged, guerrilla-like Boer War, is more of a moral tragedy.

In Gallipoli, mistakes were made, and many lives were lost. In the case of Breaker Morant and his colleagues, justice was quite deliberately dis-served by Lord Kitchener and others running the war, who felt their “sacrifice” to be imperially expedient.

The reasons had to do with the complex, unconventional nature of the conflict. Facing a surprisingly cunning adversary in the Boers, the British eventually decided to fight fire with fire and to create a highly mobile, light cavalry guerrilla force: the Bushveldt Carbineers. Overwhelmingly Australian in their ranks, they fought as a unit under British command.

Given the nature of guerrilla combat, intelligence and mobility were key. This made it difficult to take prisoners after an engagement but also dangerous to let them go and possibly reveal positions and other information to the enemy. And so it became customary to receive orders not to take prisoners when out on the Veldt, but to shoot anyone holding a rifle or possessing other equipment characteristic of an enemy combatant even in the event they attempted to surrender.

Nowadays, we would regard such action unambiguously to be a war crime. Back then, well, things were different. After all, the British were also rounding up female Boer farmers and children into concentration camps so that they couldn’t tend the crops which were fuelling the Boer militia’s war efforts. Boer starvation became widespread.

The Court of Public Opinion

As the old adage goes, “war is hell”.

That the British were using such inhumane tactics in the war began to leak out. The press reported on such matters. British public support for the war was waning. Also important, the Germans were possibly looking for an excuse to get more directly involved in the war. They made diplomatic protests to the Crown and demanded a cease fire on behalf of the Boers.

Given this situation, the British decided that the Carbineers had become a liability and they would need to fess up and admit that their unconventional tactics were unacceptable.

But who to blame? Who issued the orders to build concentration camps, round up Boer non-combatants, and leave their crops to fail? Who issued the orders to shoot Boers attempting to surrender to British forces?

The British high command decided that three lieutenants were to blame for these violations. Yes, three relatively junior officers. They were put on trial for murder and found guilty. Harry “Breaker” Morant and Peter Handcock were summarily executed by firing squad. Their more junior colleague George Witton had his sentence commuted to penal servitude for life.

Soon after these events, the British and Germans worked together to bring the Boers to the negotiating table and end the war, each seeking to promote its own imperial agenda in the process, of course.

In the film, there is an apocryphal yet apposite scene in which Lord Kitchener explains to a subordinate that the Australians have to be sacrificed in order to facilitate ending the war. The subordinate understands, but doubts that the Australians would.

“Trader” Morant, central bank scapegoat

Now you’re asking, how is any of this relevant to the financial markets?

Well would you believe, it has emerged just this past week that the Bank of England and members of Her Majesty’s Government put enormous pressure on banks, including specific traders, to fudge their trading books in order to help bring down interbank lending rates – known as Libor – during the 2008 Global Financial Crisis.

The orders came from the highest authority, it seems. And they were subsequently carried out down the ranks, under significant duress.

Some of those employees who succumbed to the pressure were subsequently put on trial for market manipulation, found guilty and sent to jail. They were not allowed to present evidence at trial that their orders were being handed down to them from on high.

The affected individuals, and their families, are no doubt very angry. At least they now have some exoneration. And they weren’t executed as Messrs Morant and Handcock were, nor sent away to a penal colony.

But unjustly taking years away from a person’s life is a highly immoral act. Will anyone be held accountable for such a blatant miscarriage of justice? Will any former Bank of England or government official be sent to jail?

Well, I’m not holding my breath.

It seems the British press and public are more interested in whether or not government ministers get penalty points on their licences, rather than if they unjustly send working men and women to jail for crimes they only committed because they were ordered by their superiors to do so.

While we should all be absolutely disgusted at such unethical, unacceptable behaviour, as investors we need to look after ourselves and our families as our first priority.

No one has your back, but you

Now that we have fresh evidence, however unpalatable, that our money, banking and financial governing institutions manipulate markets from behind the scenes, what is an investor to do?

The simplest answer, while not necessarily a complete one, is to just leave and get out. Take some portion of your wealth and get it outside the system entirely. Just go.

If you own your home, that’s a good start. And if you own some gold too, that’s even better.

In relative terms, property is historically more expensive than gold, that is if you think in terms of how many ounces it would take to purchase a typical home, or flat. In my opinion, gold is likely to be the better-performing real asset over the coming year and probably well beyond. If you’re interested in learning more about investing in gold for maximum advantage, I recommend you start here.

Some years after his release from penal servitude – there was tremendous Australian public pressure to do so – George Witton wrote a book, Scapegoats of the Empire. I wonder if one of the wrongfully convicted Libor traders will one day write of their ordeal. Perhaps they’ll call it Scapegoats of the Bank.

Until next time,

John Butler
Investment Director, Fortune & Freedom