Ed Snowden's Case for the Gold Standard

A blog about business and economics.
June 26 2013 12:19 PM

Ed Snowden's Case for the Gold Standard

A fine George III gold enamel and diamond set watch that was a gift in the 18th century from King George III of Great Britain to Qing dynasty Emperor Qianlong
A fine George III gold enamel and diamond set watch that was a gift in the 18th century from King George III of Great Britain to Qing dynasty Emperor Qianlong

Photo by Sam Yeh/AFP/Getty Images

Joe Mullin has a piece up at Ars Technica about Edward Snowden's more politically charged IRC chats under the alias <TheTrueHOOHA>. Mullin naturally focused on Snowden's 2009-vintage ideas about leakers (they "should be shot") but he also had some more Moneybox-worthy exchanges:

<User9> haha did you see ron paul at the latest bailout hearings
<User9> he brought up the gold standard
<TheTrueHOOHA> He's so dramy.
<user9> asked if there had been any discussion about that
<TheTrueHOOHA> Got a link?
<User9> no
<User10> Ahh gold standard.. it'll never happen, harder to manipulate.
<TheTrueHOOHA> That's kind of a selling point.
<User10> No it's not
<User11> hahahahhahaah you actually like the gold standard you dumb baby
<TheTrrueHOOGA> I suppose if you're a fan of runaway inflation and leverage

In another conversation, Snowden expressed complacency about the idea of Depression levels of unemployment writing "Almost everyone was self-employed prior to 1900. Why is 12% empoyment so terrifying?"

The answer, in case you're wondering, is that the modern-day economy does not allow for a large share of the population to be employed in small-scale agriculture. But Snowden's willingness to admit that his general approach would leave the government unable to respond effectively to otherwise remediable episodes of mass unemployment is refreshing. I note that as ever with the goldbug people there's a resort to the unsubstantiated argument that metal-based currency would be systematically less inflationary than U.S. dollars. There is simply no reason to believe this. The price of gold has declined about 35 percent since its peak in late 2011, which would have meant enormous inflation in a gold-backed economy. The difference is whether inflationary or disinflationary episodes are going to be a matter of public policy or a matter of random chance driven by global gold discoveries and various sources of demand.



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