Nobel Prize Winners May Have to Settle for Less: Frankfurter Allgemeine Zeitung, Germany

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The last will and testament of Alfred Nobel, father of the Nobel Prize.

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Frankfurter Allgemeine Zeitung, Germany

Nobel Prize Winners May Have to Settle for Less

"It wouldn't be the first time that the Nobel Prize has had to tighten its golden belt. Two world wars and the Depression of the thirties ensured that in some years, the amount of the prize sank below a third of its value in other years."

By Hubert Spiegel

Translated By Jonathan Lobsien

October 10, 2009 (originally published December 8, 2008)

Germany - Frankfurter Allgemeine Zeitung - Original Article (German)

A photo of Dr. Alfred Nobel: A chemist, engineer, arms manufacturer and the inventor of dynamite, in his will, perhaps he sought to make amends for the destructive power of his creations by devoting his fortune to the creation of the Nobel Prize.

BBC NEWS VIDEO: Nobel Peace Prize awarded to President Obama for 'his extraordinary efforts to strengthen global diplomacy and co-operation between peoples,' Oct. 9, 00:01:30

If American auto industry executives must be satisfied working for a dollar a year, so may Nobel Prize laureates soon have to do so. Because the executors of Alfred Nobel's estate have done some lousy speculating during the financial crisis and have lost money. Not quite as much as Harvard University, where the endowment sunk by $8 billion, or Ukraine, where the upcoming elections may be canceled because of their cost. That much may not be missing from the coffers in Stockholm, but gone is gone, as economists around the world have now discovered.

Posted by WORLDMEETS.US

Those who don't understand much about money should stick to sober facts: It costs 50 million Swedish Kroner [$7.1 million] every year for prize money, drinks and cash for dry cleaning for tuxedos. This sum must be drawn from the endowment, which in 2008 was reported to contain nearly €150 million [$223 million]. An interest yield of less than four percent would have been sufficient. But like the rest of the world - the endowment wanted more. On this point, Alfred Nobel, a man of clear words, specified in his will that his fortune should be invested exclusively in "safe securities."

HEDGE FUNDS AND OTHER BLACK HOLES

With the specious argument by bankers that the world has now changed, the founder's last will is being gradually eroded. Most recently in 2004, the Foundation itself authorized investments in hedge funds and other black holes. The losses are likely to be significant. At this point Sweden is puzzling over how much money the 2009 laureates will actually receive - if one ever gets to an awards ceremony. If no money is raised, in principle none can be disbursed. It wouldn't be the first time that the Nobel Prize has had to tighten its golden belt. Two world wars and the Depression of the thirties ensured that in some years, the amount of the prize sank below a third of its value in other years. The low point was reached in 1920, when Knut Hamsun had to settle for a paltry 134,100 Kroner - that is, in terms of purchasing power, just 28 percent of the original sum awarded in 1901.

Posted by WORLDMEETS.US

Knowing Horace Engdahl, the shrewd secretary general of the Academy and professed opponent of American culture, an emergency plan may have already been decided upon. If the coffers are empty, the 2009 Nobel Prize in Literature will finally go to the United States. The estimated prize: one dollar.

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