#20 Bring the Gold Home
Europe’s central banks are reconsidering where their ultimate reserve asset should sit. In 1963, France began quietly emptying its gold from foreign vaults. The operation carried the appropriately French codename Vide-Gousset, roughly translated as “empty pockets”. Gold left New York aboard ocean liners. Bullion stored in London followed by aircraft. The operation stretched across several years because De Gaulle was doing more than moving metal between vaults. He was reducing France’s dependence on a monetary system he no longer entirely trusted. De Gaulle, guided by economist Jacques Rueff, had become suspicious of the arrangement created at Bretton Woods. The dollar was supposedly as good as gold, convertible by foreign central banks at $35 an ounce. Yet America could issue the reserve currency required by the rest of the world while running persistent deficits of its own.
