Chapter 56 Charles de Gaulle's downfall

In 1968, the crisis continued unabated.Between March 8th and 15th of that year, the gold reserve pool in London had to provide nearly 1,000 tons of gold to maintain the price of gold.The floor of the Bank of England's weigh room was so overwhelmed with gold that it nearly collapsed.U.S. Air Force planes were even used to rush in gold from the U.S. reserve system at Fort Knox. On March 15, the United States ordered the London gold market to be closed for two weeks. By April 1968, at the request of Washington, a special meeting of the Group of Ten was convened in Stockholm.U.S. officials plan to unveil another plan, through the International Monetary Fund, to create a new “paper gold” substitute, so-called Special Drawing Rights (SDRs), further delaying the day of reckoning.

The Stockholm meeting was supposed to set the stage for the formal adoption of Washington's SDR scheme at the IMF meeting the following month, but an agreement was not agreed because of French opposition.French Minister Michel Debray repeatedly emphasized the consistent policy of the French government and demanded to return to the original rules of the Bretton Woods system.De Gaulle's adviser Ruyff has repeatedly suggested that the US dollar depreciate gold in a "shock" style, depreciating by 100%.This, plain and simple, would not only double the official U.S. gold reserves in dollar terms, but would be enough to allow the U.S. to exchange around $10 billion in foreign dollars while maintaining the same gold stock value as before.From a human point of view, this is much more rational and painless.But unfortunately, the suggestion was not taken.

Within days of France's refusal to support Washington's SDR rescue package, France itself became the most politically unstable country in the postwar period.Led by the left-wing students of the University of Strasbourg, the students launched riots and strikes across the country, and the whole of France soon fell into chaos.Echoing the political turmoil (interestingly, the French Communist Party tried to quell the turmoil), investors in the United States and the United Kingdom began a panic run on the franc, which has been hyped by the Anglo-American financial media. The student riots in May 1968 were the result of France defying the orders of financial interest groups in London and New York and continuing to fight against them.Taking advantage of new French laws allowing currency to be exchanged at will, financial institutions began exchanging francs for gold, and by the end of 1968 almost 30% of France's gold reserves had been lost, and the franc was in a full blown crisis.

Sadly, the Anglo-American counterattack succeeded.Within a year, de Gaulle was forced to step down, and the voice of France was severely weakened. In February 1969, during one of his last meetings in office, de Gaulle met with Christopher Soames, the British ambassador to France.De Gaulle once again told Soames that, looking back at France's postwar policy, Europe must be independent.But her independent stance has been deeply jeopardized by "pro-American" sentiments in many European countries, especially Britain. Another country that dared to openly defy the wishes of powerful financial interests in London and New York at this time was the largest gold producer in the West, the Republic of South Africa. In early 1968, South Africa refused to sell newly mined gold for pounds or dollars at the official price of $35 an ounce.In order to establish a new monetary order based on gold and reform the Bretton Woods monetary system, France and South Africa held talks.But this provoked a boycott of South Africa by central banks led by the United States.This boycott was repeated almost exactly 20 years later, in the mid-1980s, by the same interest groups.

Although the "threat" of France was clearly reduced, the success in Washington and London also proved to be a very costly victory.