AFP
In a recent interview with Glenn Beck, entrepreneur Peter Thiel had some surprisingly positive things to say about the gold standard and how it relates to innovation in tech. This is comes as a surprise as Thiel co-founded online payments system PayPal. From the interview (emphasis ours):
Where we've had progress in the world of bits but not in the world of atoms, and this world of bits, we've had progress in computers, Internet, mobile Internet. Technology just means information technology. It's all about bits, but the world of atoms, space travel, energy like nuclear power, biotech, new medical devices, that's been much slower, and there's been much less progress in those areas in the last forty years. …
One's been regulated, the other has not, but we've had this sort of dualistic world where the virtual world of bits has been growing very fast, but the real world of atoms has been kind of stagnant. And I think there's a strange counterpoint where the same thing happened with our currency, where the real value of money became separate from the virtual in August of '71 when we went off the gold standard. And so, you know, whatever you think of the gold standard, it had the virtue of connecting the real with the virtual.
So I think there's nothing wrong with cyberspace or computers or anything, but it's when it becomes separated from the real that it's bad. And these successful companies have actually been the ones that somehow connected it. Facebook succeeded because it was about real people having a presence on the Internet. There were all these other social networking sites people had, but they were all about fictional people. One of my friends started a company in 1997, seven years before Facebook, called SocialNet. And they had all these ideas, and you could be like a cat, and I'd be a dog on the Internet, and we'd have this virtual reality, and we would just not be ourselves. That didn't work because reality always works better than any fake version of it.
The problem, of course, with connecting the real and the abstract when it comes to the money supply of entire economies is that sometimes it's helpful for the central bank to be able to expand the money supply, which is hard to do when you define it based on how many blocks of gold are sitting in the basement of a government building.
Twitter had some interesting perspectives on this, particularly from hedge fund manager Mark Dow:
In order to remove any doubt cc: @Noahpinion RT @shaneferro: Peter Thiel praises the gold standard https://t.co/E4tN9nXuRz
- Mark Dow (@mark_dow) October 28, 2014 @cthorm @Noahpinion @shaneferro his whole framework has been wrong
- Mark Dow (@mark_dow) October 28, 2014 @cthorm @Noahpinion @shaneferro I should've said "macro framework"
- Mark Dow (@mark_dow) October 28, 2014 Warm the cockles of Churchill's heart. MT @hblodget: O for goodness sake RT @shaneferro: Thiel praises gold standard https://t.co/t2IU9f0UC9
- Nigel Cameron (@nigelcameron) October 28, 2014 'Finally, something with *real* value. Enough of this virtual nonsense.' [Holds rock in hand]
- Ben Walsh (@BenDWalsh) October 28, 2014 In other Thiel gold news, back in 2009 he called gold the "anti-investment."
(via Jim Pethokoukis)