De Gaulle the gold bug

June 25, 2008 5:21 AM by Tim Swanson (Archive)

I recently came across a 43 year-old piece from Time, De Gaulle vs. the Dollar. While De Gaulle had an ulterior motive in his reasoning, his rationale for returning to the gold standard is laudable: to keep government spending in check (thus limiting the foreign influence exerted by the US federal government).

From Time:
There was Charles de Gaulle last week proclaiming that the primacy of the dollar in international dealings was finished, calling for an eventual return to the gold standard --which the world's nations scrapped 50 years ago -- and practically inviting other countries to follow France's lead and cash in their dollars for gold.
[...]
France converted $150 million into gold last month, plans another $150 million conversion soon. Following that lead, Spain has quietly exchanged $60 million of its dollar reserves for U.S. gold--the biggest such transaction of the Franco era. To free more gold to meet rising demand, a congressional committee last week approved President Johnson's proposal to eliminate the 25% gold backing now legally required for deposits held in the Federal Reserve System.

Note: Remember, this is when gold was artificially pegged at relatively low value (around $35/ounce). See also: Petrodollars and Inflation.