French magazine challenges Banque de France’s gold lending plans
“Politique magazine in Paris this week published a report by Edouard Freval about the Banque de France’s new interest in lending and swapping gold through JPMorganChase & Co. even as credit and currency risks are rising and other central banks are acquiring the monetary metal to guard against those risks. The report quotes former French central bankers criticizing the scheme. It also quotes your secretary/treasurer at some length. Even when read in English through Google Translator the report does very well casting suspicion on the Banque de France’s scheme and reminding readers that gold is the ultimate money, not to be trifled with. The article is headlined ‘La France Est-Elle en Train d’Hypothequer Son Stock d’Or?’ — ‘Is France Mortgaging Its Gold Stock?'”
USAGOLD note: France would like to pick up at least a portion of London’s huge gold business both both in physical and paper forms. If putting the nation’s gold reserve at risk is part and parcel of that effort, the French people are likely to react negatively given their long attachment to the yellow metal – a bond that grew from two destructive bouts of hyperinflation in the 18th century.
Few know that Napoleon Bonaparte, who was the founder of the Bank of France, was a staunch advocate of gold over paper money. In Fiat Money Inflation in France, Andrew Dickson White tells the story of Napoleon’s founding of France’s central bank:
“[The assignat inflation] ended in the complete financial, moral and political prostration of France – a prostration from which only a Napoleon could raise it. . .at [his] first cabinet council Bonaparte was asked what he intended to do. He replied, ‘I will pay cash or pay nothing.’ . . .[Later] when the first great European coalition was hard pressed financially, and it was proposed to resort to paper money; he wrote to his minister, ‘I will never resort to irredeemable paper money.’ He never did, and France, under this determination, commanded all the gold she needed.” With the gold swap program, current management appears determined to put the French gold reserve at risk – a program Napoleon likely would have opposed as undermining the financial stability of the nation.
Repost from 2/7/2019