CWT Ideology. Aleksey Muratov

CWT Ideology - Aleksey Muratov


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had real value and was literally worth that value in gold.

      De Gaulle did not intend to bring back the gold standard,

      which would ensure the stability of the global financial system.

      Quite the contrary, he was proposing a return to the role of gold

      as the general equivalent. Americans were torn between the

      Vietnam War and problems in the Caribbean, they hoped that

      the anti-dollar rhetoric of the French leader would remain just

      words. However, it did not go that way.

      A secret report by famous economists Robert Triffin and

      Jacques Rueff, prepared in 1959, informed General De Gaulle

      that the forced participation of France in the so-called “Gold

      Pool” was ruining the economy. The international structure of

      the central banks of seven Western European countries under

      the auspices of the Federal Reserve Bank of New York, which

      included France, were acting through the Bank of England.

      It was not only keeping the international price of gold at $35

      per ounce (one ounce is equal to approximately 31 grams) for

      the convenience of Washington but was also trading the gold

      for their benefit and reporting monthly to the US financial

      authorities. If they had to increase the selling volume of the

      metal, the pool participants gave the Americans the gold

      from their reserves. If the pool bought more than sold, the

      difference was shared at a humiliating ratio: half was given

      to the Americans, half to the others. France had 9%. Experts

      reported to de Gaulle that the activities of the Gold Pool had

      caused over $3 billion in loss to the Europeans.

      General de Gaulle knew he irritated the US government,

      particularly after France had accelerated development of its

      own nuclear weapons program in the early 1960s. In January

      of 1963 De Gaulle rejected the “multilateral nuclear force”

      created by the Pentagon and he took back the control of the

      Atlantic fleet of France from NATO. By that time only two

      French divisions remained under the American command

      instead of the fourteen that were agreed on. However, the

      Americans never guessed that this was just the beginning.

      In 1965 De Gaulle formally proposed to his American

      counterpart Lyndon Johnson 1.5 billion dollars in cash from

      the French state reserves to be exchanged for gold. Washington

      responded that the US would regard such an action by France

      as unfriendly and would have consequences. “Politics is

      too serious a matter to be left to the politicians”, – retorted

      the general and announced that France was walking out on

      NATO

      In spring of 1965 a French ship anchored in New York

      harbor. It was not a combat vessel, but it had a weapon with

      which Paris intended to win the financial battle with the

      United States. The French ship had brought bank notes to the

      value of 750 million dollar to the United States in order to

      exchange them for “real money”, that is for gold. That was

      the first tranche payment to the Federal Reserve System.

      “All the formalities are met. The representative of the

      Bank of France is ready to provide half of the said amount

      to the US Treasury. The money is here”, – read the official

      dispatch from Paris to Washington. Exchange under the rules

      of the Gold Pool could only be made to the US Treasury. The

      hull of the first French “money” ship was waiting to unload

      the 750 million dollars. At an exchange rate of 1.1 grams

      of gold per dollar, Paris’s move away from the US currency

      turned out to be very productive. 825 tons of the yellow metal

      is a large amount. Another ship carrying the same amount

      was on the way and that was only the beginning. By the end

      of 1965 there remained only about 800 million dollars of the

      $ 5.5 billion French foreign reserves in the US.

      Of course, de Gaulle had not brought down the dollar

      alone. However, the French currency intervention had

      created a dangerous precedent for the US. Following the

      unpredictable move by France, zealous Germans pulled

      together to change dollars for gold bars. Their exchange

      was several times larger than the 1.5 billion dollars of

      France. Americans were shocked by this bold play but had

      to change the “greenbacks” for gold. Then the central banks

      of other countries – Canada, Japan – followed suit. The news

      about the US gold reserves at that time were like front-line

      reports on the battle field.

      In March of 1968 the Americans limited the free

      exchange of dollars for gold for the first time. By the end

      of July, 1971 the US authorities declared the gold reserve

      of America had dropped to its lowest level – less than

      Конец ознакомительного фрагмента.

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