Abstract: The Glitter of Gold studies the so far unexplored operation of the international monetary system that prevailed before the emergence of the international gold standard in 1873. Conventional wisdom has it that the emergence of gold as a global anchor was both an inescapable and a desirable evolution, given the exchange rate stability it provided and Britain's predominance. The book draws on a wealth of archival and new statistical evidence to demonstrate that global exchange rate stability always prevailed before the making of the gold standard. This was despite the heterogeneity among national monetary regimes based on gold, silver, or both. The reason for the stability before the establishment of the gold standard is France's bimetallic system. France, by being in a position to trade gold for silver, and vice-versa, effectively pegged the exchange rate between gold and silver at its legal ratio of 15.5 :1. This system proved remarkably stable and flexible, thanks to a global network of foreign exchange and precious metal arbitrage, operated from Paris and London by leading international banks - most prominently, the Rothschilds. Contrary to the received wisdom, the controversies of the 1860s on the “double standard” signalled both the advantages of this system and the considerable costs that large countries would have to pay if the world wanted to shift to a single standard. It took a series of political shocks, misguided decisions, and international rivalries to put an end to bimetallism in the early 1870s.

Keywords: Bimetallism, Gold Standard, Silver Standard, Gold Rush, Arbitrage, Rothschilds, Bank of France, Bank of England, Bullion, Gold points