Matthew Lynn, a financial columnist and author who writes for the Daily Telegraph and the Spectator in London, is a Post Opinions contributor.
So much gold is leaving the United States you’d half expect the White House to send troops to guard American ports. The Netherlands announced in early September that it has shifted much of its gold reserves from New York to London. Other European countries have made similar moves. It never takes much to get the internet buzzing, but the flight of gold from the U.S. has invited enough fevered social media speculation to strain even the most powerful Nvidia chip. There’s just one problem: The hysteria is unnecessary. America doesn’t need the world’s gold.
No one denies that the departure of gold from American vaults is accelerating — thanks, in part, to tension between Europe and the U.S. The Dutch central bank president, Olaf Sleijpen, said moving 86 metric tons of gold out of the U.S. and Canada was “necessary to strengthen our resilience and preparedness.” Earlier this year, the Bank of France completed the repatriation of its gold reserves, selling the remaining 129 metric tons held at the Federal Reserve Bank of New York. During the mid-2010s, Germany’s central bank shipped hundreds of tons of gold back home, and it is now under pressure to shift more. Emanuel Mönch, former head of research at the central bank, described the U.S. as too “risky” a location for such a valuable asset.
There is something about gold, along with the moon landing and the Kennedy assassination, that stirs up conspiracy theories. Major economists and commentators have speculated that the U.S. could seize foreign gold. Ask pockets of the internet about the gold exodus, and they’ll tell you the Europeans are preparing for an all-out economic war with the U.S. Or the dollar is about to collapse. Or, if that doesn’t take your fancy, maybe the world’s major central banks are planning a dramatic return to the gold standard. It is all entertaining stuff for anyone who wants to browse the wilder corners of X.
Even so, none of it should be taken seriously. Gold is leaving the U.S. for reasons that are quite dull. During World War II, a lot of gold was shipped out of Europe because reserves were safer in the U.S. than at home. That persisted through the Cold War, since Frankfurt, Germany, in particular — where Germany holds most of its gold reserves — could have fallen in a Soviet invasion of Western Europe. And under the old Bretton Woods system, gold was also the ultimate backstop of semifixed exchange rates. It occasionally needed to be moved from one country’s ledger to another’s, and it made sense for most of the reserves to be in the same building.
All those reasons stopped being relevant to most countries decades ago, and gold has little importance in the modern economy. The old system has just taken a while to unwind.
But there is one credible explanation for why gold is being moved now. A few of the European powers may be sending a subtle signal to the Trump administration that losing the trust of U.S. allies has financial consequences. After all, gold is President Donald Trump’s favorite commodity — just look at the expensive, glitzy ballroom at the White House. If a country wanted to gently needle the president for trying to annex Greenland or putting tariffs on BMWs, taking its gold home would be a pretty good place to start. It would get under Trump’s skin without provoking a major diplomatic fight.
But repatriating gold doesn’t mean anything in the real world. Indeed, with the rise of cryptocurrency as an alternative asset, gold is less important than ever, either as a store of value if inflation continues to rise or as a backstop to the dollar. The U.S. still has more gold than any other nation, and all America was ever doing for the Netherlands, France, Germany and a few other countries was providing a storage facility.
The U.S. has plenty of economic challenges, including taming the artificial intelligence bubble, reducing its vast deficit and standing up to China. Losing gold isn’t one of them.
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