>However, an operation to repatriate its gold holdings began in the 1960s leading up to the US termination of the Bretton Woods system, which effectively stopped foreign governments from exchanging dollars for gold.
French-US monetary history after WWII:
Under the Bretton Woods agreement (1944-1971), the US dollar was the world’s reserve currency, and it was pegged to gold at $35 per ounce. Other countries pegged their currencies to the dollar.
around 1965, De Gaulle initiated a systematic, aggressive policy where they converted USD into physical gold every time French acquired USD from trade, then French Navy picked those gold bullions from NY. By 1971, the US gold reserves had decreased so much that they did not cover the dollars circulating globally and Nixon "closed the gold window,"
You seem to imply that Charles de Gaulle and his policy of converting dollars to gold caused the collapse of the Bretton Woods system. That was a myopic view. The whole Bretton Woods system was doomed from the beginning due to design defects.
The system was conceived with the primary goal of maintaining balance of payments equilibrium for all countries at the expense of economic growth and liquidity. It had become clear that if a country wanted its currency to be the world reserve currency it had to run a balance of payment deficit. And the United States clearly wanted its dollar to be the reserve currency unbridled by any balance of payment constraints.
If the United States had balance of payment surpluses as it had in the early years, the system lost liquidity (other countries wanted to buy U.S. exports but had neither gold nor dollars to do so), reducing the surplus. And if the United States had balance of payment deficits, well, gold would flow out of the United States, and the United States could not meaningfully increase public debt or spending.
Ok, bear with me for a moment - what if the US would use actual physical gold coins instead of dollars? Then your argument of "gold would flow out" would not hold - so the only reason for it to flow out was that the gold standard was fake - the lax money policy of the US was the issue, not the gold standard itself.
> what if the US would use actual physical gold coins instead of dollars?
The problem here is, what if the demand for dollars increases?
In principle the US would get more gold and mint more currency, but gold is a finite resource. "All the gold ever mined" is around 200,000 metric tons, ~32k troy ounces per metric ton is ~6.4B troy ounces.
In 2022 (just before the recent gold rally) the price was ~$2000 per troy ounce, i.e. "all the gold" was worth ~$13T. Meanwhile the M3 money supply in the same year was ~$20T. What happens if you try to buy $20T worth of gold to mint currency when only $13T worth has ever been mined, and not all of that is even on the market? The answer is that you can't, so instead the result is deflation, which is bad.
Or to put it a different way, what do you think the economic effect of the recent gold rally would be for a country whose currency was still pegged to gold? It just got way cheaper to import foreign products than buy domestic ones, and way more expensive for foreign countries to buy your exports, so how's the unemployment rate looking? The amount everyone owes on their mortgage hasn't changed but the nominal value of their houses just got cut in half so now they've lost their jobs and are underwater. What happens when they start to default and foreclosures don't allow the banks to recover the principal?
Gold is silly as a measure of value. It's just a piece of shiny metal. The amount of value in the world is increasing so you want to exchange medium to grow with it else you're pulling breaks on the actual economy.
So as trade increases, and the need for dollars increases, gold and the dollar increase in value together.
That sounds benign until you realize that is: deflation. It incentivizes everyone to hold their dollars instead of spending them, and parasitically gain from gold's increasing utility use as currency by others.
This further decreases dollars available on the market to use in trade, further increasing their value. Which ... yes this can be an economic death spiral. Or at least, a strongly growth conflicted world.
A world in which you can make 5-10% a year by avoiding economic activity or investment is not a healthy world.
(And you can't increase gold supply to counteract this, because gold supply is also always balanced against the cost of extracting gold. Unless everyone else on the planet except the US government is prohibited from mining gold, there is no play there.)
That doesn't make any sense to me. Under Bretton Woods, a "dollar" was a contractual equivalent to a fixed amount of gold. There's no difference. When people are talking about "flow out" they're not talking about literally motion of currency[1], just who owns it.
[1] Which is backwards in your reasoning anyway. If you're a foreign power wanting to hold dollars, and dollars are physical gold coins, then you quite literally need to move them physically out of the country, right?
> Ok, bear with me for a moment - what if the US would use actual physical gold coins instead of dollars?
You'll get a bear economy, leading to the eventual deflation and collapse.
Fun fact: it was not hyperinflation in Weimar Germany that led Hitler to power but _deflation_ because of its insistence on sticking to the gold standard.
All the facts are true here, but "design defect" is silly. The entire purpose was to keep a country like the US from exploiting its position, and becoming the "world's reserve currency" which is just a euphemism for running up massive debts to poorer states.
Bretton Woods was sabotaged by the US and the USSR through the single vehicle of https://en.wikipedia.org/wiki/Harry_Dexter_White. Without a Bancor, the entire system simply became a mechanism to exploit the poor.
I agree with you that Bretton Woods was doomed from the beginning, both Keynes and Friedman said so, and this should be a better known POV. Economists are not historians though, and historians write human-driven stories (i.e., it was Nixon who ended Bretton Woods, it's not that it was going to inevitably collapse as an econometric question).
All that said, Bretton Woods matters because people look at the gold standard as a time when wages in the United States rose. Like that's why Bernie Bros on HN care. It's the same reason they oppose globalization: me me me. So it's worth knowing why it was flawed. They don't comprehend that before and after Bretton Woods, hourly wage charts measured a fundamentally different thing.
I think it's better to attack the charts - I mean, you're responding to a Charts Guy, a guy who's like, look at this Gold Denominated Chart guy - because that's what their brains work on. Don't worry about economics. These guys are not economists. They are Charts. The real attack on their worldview is that, well, just because the year in the X axis is an increasing, doesn't mean that you can compare a bigger year to a smaller year. They would really like the world to be ordered that way, but it's not, and taking leadership on convincing them of that is very hard.
> trade, then French Navy picked those gold bullions from NY
I couldn’t find any clear news source or academic reference to that event. I see a lot of references on gold buying/selling sites mostly. I would imagine a Fench Navy ship docked NY and loading tons of gold would make quite a stir.
De Gaulle was ahead of his time. He was very skeptical of the control that the US had over Europe through NATO. He left the alliance to build an independent French nuclear program which is paying dividends today amid the current leadership situation in the US.
This is not gain at all. At least in theory: You own some tons of gold at the start of the process, you have the same tons of gold at the end of the process.
The only real gain is that you have gold in the US custody and the US can be tempted to just use it without telling you anything.
In other words, you had "paper gold" or "virtual gold" that the US can confiscate anytime, for example after invading Greenland, blackmailing France to do nothing.
Is anyone here actually reading the article? Yes, they really made a gain of $15B:
> But instead of refining and transporting the gold, it opted to sell the bars and purchase new bullion in Europe. […] Due to rising gold prices, the move helped the bank to generate a capital gain of 13 billion euros ($15 billion),
This article is poorly written. No new wealth was created.
They monetized an existing accounting/revaluation gain by selling older, non-standard bars and replacing them with compliant bars, while keeping the overall gold quantity unchanged. That is not the same as "we moved gold home and earned $15B on the move."
In simple terms:
- You buy x of gold at $10
- You sell it much later for $100
- You made a profit of $90, and you hold $100 of cash
- You rebuy x of gold for $100, back to the same gold exposure, but on the books, you have $90 of profit
Good for France to relocate gold back to their own territory, but, uh, how can this result in a 15 B gain?
"The overall size of France’s gold reserves still remained unchanged at roughly 2,437 tonnes, which are now entirely held at the BdF’s underground vault in La Souterraine."
Is this some special form of French accounting, where the gold becomes more valuable when it returns to French soil?
The funny thing about this is that since 1945, France keeps and uses the majority of the gold reserves of 14 former French colonies in West and Central Africa and uses that power to make them use the CFA Franc, a currency pegged formerly to the French Franc but now of course to the Euro [1].
It's worth noting that the stated reason here isn't because of, say, US instability but rather "standardizing" the gold. It doesn't say what that means but I assume France is basically selling some New York held nonstandard gold to "standard" gold held in France. "Standard" here probably means a given size and purity. Yes, there are different purity levels to gold. So think the heavy bullion bars you see on movies.
> 2. Improvement in income from non-monetary activities
> Net income from assets denominated in euro rose by EUR 2 billion, driven by an increase in outstandings. Income from assets held for own account rose by EUR 12.2 billion as a result of an exceptional item. In 2025 and at the start of 2026, while the volume of gold reserves remained unchanged, the Banque de France had to align a residual portion (5%) with technical guidelines, resulting in a significant realised currency gain. This exceptional foreign exchange income totalled EUR 11 billion for 2025.
> Net operating expenditure remained under control, falling to EUR 831 million from EUR 888 million in 2024. Since 2015, net operating expenditure has fallen by an average of 4.1% in volume terms.
> Overall, after transferring EUR 5 billion from reserves and booking a corporation tax charge of EUR 1.5 billion, net profit for 2025 totalled EUR 8.1 billion.
> A total of EUR 0.4 billion of this amount has been allocated to the special reserve, in accordance with regulations, while the remainder has been used to clear the deficit in retained earnings (EUR 7.7 billion) that was left after the allocation of the net loss in 2024
> After clearing these past losses in their entirety, the Banque de France’s net equity – comprised of own funds plus unrealised capital gains on asset holdings – is now extremely solid at EUR 283.4 billion, up from EUR 202.7 billion in 2024. The Banque de France’s net equity includes a revaluation reserve of state gold and foreign exchange reserves (RRRODE) of EUR 11.4 billion, to cover future monetary expenses
I assume that this increased equity makes selling bonds a bit easier?
I doubt the claim, honestly. Such an institution would never buy and sell to trade the market, they probably never stopped being exposed to gold by buying and selling simultaneously and the 15b is the realized gain of the sold gold, which is only in paper as they still hold the gold.
$15 B gains... Just to put things in perspective: France has a GDP of about 3.5 trillion USD and a public debt of 117% of that amount. $15 B is not even a drop in the bucket.
To add to France's problem: in 2024 the PIB growth was 1.2%, which doesn't even counter inflation. And it's been like that since 2008: inflation adjusted in USD, no growth (while both the US and China's GDP inflation-adjusted skyrocketed).
The EU, and the eurozone in particular, is totally losing the plot: 1 company in the top 50 companies by market cap, ASML (and it's not french).
Considering how Project2025 declared Europeans as enemy, it really is time to focus on more reliable partners than the current (and most likely future) USA version. Trump is a war-president - when he babbles about what Project2025 tells him to say, he stumbles over his own lies increasingly so, most likely because his brain no longer works that well. The recent "we can not extend health care and social care because we must wage wars" was kind of a slip-up of the real agenda - not that this is a real secret either, but even folks who voted for Trump thinking he cares about him (as if billionaires care about other people ever), should now realise the path the USA has decided to walk. ICE shooting down US citizens also show this - you protest, you get shot.
361 comments
>However, an operation to repatriate its gold holdings began in the 1960s leading up to the US termination of the Bretton Woods system, which effectively stopped foreign governments from exchanging dollars for gold.
French-US monetary history after WWII:
Under the Bretton Woods agreement (1944-1971), the US dollar was the world’s reserve currency, and it was pegged to gold at $35 per ounce. Other countries pegged their currencies to the dollar.
around 1965, De Gaulle initiated a systematic, aggressive policy where they converted USD into physical gold every time French acquired USD from trade, then French Navy picked those gold bullions from NY. By 1971, the US gold reserves had decreased so much that they did not cover the dollars circulating globally and Nixon "closed the gold window,"
The system was conceived with the primary goal of maintaining balance of payments equilibrium for all countries at the expense of economic growth and liquidity. It had become clear that if a country wanted its currency to be the world reserve currency it had to run a balance of payment deficit. And the United States clearly wanted its dollar to be the reserve currency unbridled by any balance of payment constraints.
If the United States had balance of payment surpluses as it had in the early years, the system lost liquidity (other countries wanted to buy U.S. exports but had neither gold nor dollars to do so), reducing the surplus. And if the United States had balance of payment deficits, well, gold would flow out of the United States, and the United States could not meaningfully increase public debt or spending.
> what if the US would use actual physical gold coins instead of dollars?
The problem here is, what if the demand for dollars increases?
In principle the US would get more gold and mint more currency, but gold is a finite resource. "All the gold ever mined" is around 200,000 metric tons, ~32k troy ounces per metric ton is ~6.4B troy ounces.
In 2022 (just before the recent gold rally) the price was ~$2000 per troy ounce, i.e. "all the gold" was worth ~$13T. Meanwhile the M3 money supply in the same year was ~$20T. What happens if you try to buy $20T worth of gold to mint currency when only $13T worth has ever been mined, and not all of that is even on the market? The answer is that you can't, so instead the result is deflation, which is bad.
Or to put it a different way, what do you think the economic effect of the recent gold rally would be for a country whose currency was still pegged to gold? It just got way cheaper to import foreign products than buy domestic ones, and way more expensive for foreign countries to buy your exports, so how's the unemployment rate looking? The amount everyone owes on their mortgage hasn't changed but the nominal value of their houses just got cut in half so now they've lost their jobs and are underwater. What happens when they start to default and foreclosures don't allow the banks to recover the principal?
That sounds benign until you realize that is: deflation. It incentivizes everyone to hold their dollars instead of spending them, and parasitically gain from gold's increasing utility use as currency by others.
This further decreases dollars available on the market to use in trade, further increasing their value. Which ... yes this can be an economic death spiral. Or at least, a strongly growth conflicted world.
A world in which you can make 5-10% a year by avoiding economic activity or investment is not a healthy world.
(And you can't increase gold supply to counteract this, because gold supply is also always balanced against the cost of extracting gold. Unless everyone else on the planet except the US government is prohibited from mining gold, there is no play there.)
[1] Which is backwards in your reasoning anyway. If you're a foreign power wanting to hold dollars, and dollars are physical gold coins, then you quite literally need to move them physically out of the country, right?
> Ok, bear with me for a moment - what if the US would use actual physical gold coins instead of dollars?
You'll get a bear economy, leading to the eventual deflation and collapse.
Fun fact: it was not hyperinflation in Weimar Germany that led Hitler to power but _deflation_ because of its insistence on sticking to the gold standard.
Bretton Woods was sabotaged by the US and the USSR through the single vehicle of https://en.wikipedia.org/wiki/Harry_Dexter_White. Without a Bancor, the entire system simply became a mechanism to exploit the poor.
All that said, Bretton Woods matters because people look at the gold standard as a time when wages in the United States rose. Like that's why Bernie Bros on HN care. It's the same reason they oppose globalization: me me me. So it's worth knowing why it was flawed. They don't comprehend that before and after Bretton Woods, hourly wage charts measured a fundamentally different thing.
I think it's better to attack the charts - I mean, you're responding to a Charts Guy, a guy who's like, look at this Gold Denominated Chart guy - because that's what their brains work on. Don't worry about economics. These guys are not economists. They are Charts. The real attack on their worldview is that, well, just because the year in the X axis is an increasing, doesn't mean that you can compare a bigger year to a smaller year. They would really like the world to be ordered that way, but it's not, and taking leadership on convincing them of that is very hard.
> trade, then French Navy picked those gold bullions from NY
I couldn’t find any clear news source or academic reference to that event. I see a lot of references on gold buying/selling sites mostly. I would imagine a Fench Navy ship docked NY and loading tons of gold would make quite a stir.
> De Gaulle initiated a systematic, aggressive policy where they converted USD into physical gold
The dude was a visionary for many things, but I didn't know about this. Borderline prescient. What a guy.
The only real gain is that you have gold in the US custody and the US can be tempted to just use it without telling you anything.
In other words, you had "paper gold" or "virtual gold" that the US can confiscate anytime, for example after invading Greenland, blackmailing France to do nothing.
You gain custody of what is yours.
> But instead of refining and transporting the gold, it opted to sell the bars and purchase new bullion in Europe. […] Due to rising gold prices, the move helped the bank to generate a capital gain of 13 billion euros ($15 billion),
They monetized an existing accounting/revaluation gain by selling older, non-standard bars and replacing them with compliant bars, while keeping the overall gold quantity unchanged. That is not the same as "we moved gold home and earned $15B on the move."
In simple terms:
- You buy x of gold at $10
- You sell it much later for $100
- You made a profit of $90, and you hold $100 of cash
- You rebuy x of gold for $100, back to the same gold exposure, but on the books, you have $90 of profit
"The overall size of France’s gold reserves still remained unchanged at roughly 2,437 tonnes, which are now entirely held at the BdF’s underground vault in La Souterraine."
Is this some special form of French accounting, where the gold becomes more valuable when it returns to French soil?
It's worth noting that the stated reason here isn't because of, say, US instability but rather "standardizing" the gold. It doesn't say what that means but I assume France is basically selling some New York held nonstandard gold to "standard" gold held in France. "Standard" here probably means a given size and purity. Yes, there are different purity levels to gold. So think the heavy bullion bars you see on movies.
[1]: https://www.brookings.edu/articles/how-the-france-backed-afr...
> 2. Improvement in income from non-monetary activities
> Net income from assets denominated in euro rose by EUR 2 billion, driven by an increase in outstandings. Income from assets held for own account rose by EUR 12.2 billion as a result of an exceptional item. In 2025 and at the start of 2026, while the volume of gold reserves remained unchanged, the Banque de France had to align a residual portion (5%) with technical guidelines, resulting in a significant realised currency gain. This exceptional foreign exchange income totalled EUR 11 billion for 2025.
> Net operating expenditure remained under control, falling to EUR 831 million from EUR 888 million in 2024. Since 2015, net operating expenditure has fallen by an average of 4.1% in volume terms.
> Overall, after transferring EUR 5 billion from reserves and booking a corporation tax charge of EUR 1.5 billion, net profit for 2025 totalled EUR 8.1 billion.
> A total of EUR 0.4 billion of this amount has been allocated to the special reserve, in accordance with regulations, while the remainder has been used to clear the deficit in retained earnings (EUR 7.7 billion) that was left after the allocation of the net loss in 2024
> After clearing these past losses in their entirety, the Banque de France’s net equity – comprised of own funds plus unrealised capital gains on asset holdings – is now extremely solid at EUR 283.4 billion, up from EUR 202.7 billion in 2024. The Banque de France’s net equity includes a revaluation reserve of state gold and foreign exchange reserves (RRRODE) of EUR 11.4 billion, to cover future monetary expenses
I assume that this increased equity makes selling bonds a bit easier?
From: “Net profit of EUR 8.1 billion, enabling the clearing of losses carried forward” https://www.banque-france.fr/en/press-release/net-profit-eur...
To add to France's problem: in 2024 the PIB growth was 1.2%, which doesn't even counter inflation. And it's been like that since 2008: inflation adjusted in USD, no growth (while both the US and China's GDP inflation-adjusted skyrocketed).
The EU, and the eurozone in particular, is totally losing the plot: 1 company in the top 50 companies by market cap, ASML (and it's not french).
One.
The last time they asked for their gold back Nixon "temporarily" ended the convertibility of the USD to gold.
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